Yesterday, the Chinese government approached the world Trade organization, the regulatory body for world trade for a probe into the Indian ban on import of Chinese toys which was announced on January 23, 2009.
The Indian government took this step as a means to protect the local toy manufacturers who aren’t able to compete with super-low price of the Chinese toys. The Indian toy industry is estimated at $500 million and the Chinese toys account for more than 50% of it. The other reasons cited corner around the issues of these toys being dangerous, alleged to be made of toxic materials.
The Chinese government is highly dissatisfied over these recent bouts of protectionism by various nations. Earlier US had come up with anti-subsidy and anti-dumping policies on four of china’s major exports to the country. The UK government has also imposed punitive tariffs up to 85% on the import of Chinese screws and fasteners within the country because their price is far lower than those manufactured locally. It had moved WTO for action into this respect.
The Indian ban has specially hit the Chinese toy segment hard because India remains to be one the biggest consumer of its products. So the Chinese government has decided to voice its dissatisfaction on the issue through the WTO which will decide whether the international trading norms have been violated or not.
A trend of protectionism is growing amongst the nations of the world to protect their indigenous industries by curtailing free trade and fight back recession. But what they don’t realize is that it would be helpful only in the short run and will eventually be an obstacle in the way of global development.
