【Text/Observer Network columnists Wang Siyuan, Yan Hao】
On the evening of June 29, local time, the Indian government announced the banning of 59 Chinese applications on the grounds of protecting national security. India's Ministry of Information Technology said in an official statement: "In view of the information obtained, these applications involve activities that endanger India's sovereign integrity, national security and public order".
The 59 apps include the popular short video app TikTok, as well as other practical and content apps such as UC browser, Xender, SHAREit and Clean-master, involving Chinese Internet companies such as ByteDance, Tencent, and Baidu.
The implementation of this policy means that chinese companies that are currently deeply cultivating the Indian market will find it difficult to avoid losses.
As of July 1, the 59 apps on the list have been removed from India's Google Play, App Store and other app stores (some products such as Tiktok claim to be actively removed), and the subsequent blockage may be further extended to the field of app download or user use. According to the category, the removal of tool applications is the first, with a total of 14 apps removed, followed by social and short video applications, 9 and 7 respectively, and Chinese background head apps in the pan-entertainment, search, browser, news, games, e-commerce and other industries are also affected.
App blockage not only impacts the revenue of these companies, in addition to relying on user payment as the only feasible monetization channel in the Indian market has been cut off, resulting in most apps will lose the source of revenue in the Indian market, there are many other cost losses, such as the loss of existing users, marketing advertising that has been invested in the quarter of the year, user acquisition costs, etc.; if withdrawn, the previously recruited Indian employee layoffs and severance costs, office costs and consumed product research and development costs are equally expensive.
The head of TikTok India issued a statement: There is no and will not leak user data. Pictured here is the person in charge nigel Gandhi in Douyin. (Photo/yourstory.com)
There is no "blue ocean" in the Indian market
Since 2014, Chinese Internet companies have gone to India on a large scale, hoping to gain a head start in this "hot land". After 6 years of hard work, most Chinese Internet companies have landed in India, and the Indian market has no blue ocean, and even the "sea" itself does not exist.
From the perspective of user groups, India's per capita income is low, the gap between rich and poor is obvious, even in a large city like the capital New Delhi, the average salary of basic white-collar workers is only about 3,000 yuan, and most people's income has just been able to solve the problem of food and clothing, and their economic ability is limited. Also taking live broadcasting as an example, most of the arpu value in the Indian market (the average revenue per user) is about 19 yuan, while Southeast Asian countries are basically between 30-50 yuan, and the Middle East is more than 150 yuan. In contrast, spending power determines that Indian users are extremely willing to pay for Internet products.
From the perspective of business environment, India's corruption and bureaucracy are still serious, and doing things according to the prescribed procedures and time often means delays and failures, and most Chinese Internet companies can only take money to pave the way in exchange for the opportunity and efficiency of seizing the market.
In terms of business culture, the commercial culture between China and India is very different. India's traditional "mail culture", "workplace afternoon tea culture", "must not refuse sincere partners in person" and other unspoken rules, but also let Chinese have a strong sense of discomfort in business communication.
In terms of infrastructure, in major cities such as Delhi, Gurgaon, Bangalore, Mumbai, where Internet companies are mainly concentrated, the office and apartment water grid is at least a few stops a day, and the extremely poor network conditions mean that most Internet companies cannot put too complex Apps in India, on the one hand, pulling down the entry threshold of the track, on the other hand, causing a large number of Internet companies to crowd in the low-end market and a single monetization channel, forming homogeneous competition and reducing the possibility of opening up incremental markets. The backwardness of logistics, transportation and other infrastructure has made the development of the e-commerce field slow.
In terms of policy, India has always been unfriendly to foreign investment, especially Chinese foreign investment. According to India's foreign exchange control policy, the company's account funds need to submit relevant materials to the bank and declare the departure tax, while the 18% GST tax (goods and services tax), 10% departure tax, 25% corporate income tax, 10% TDS (source tax deduction) and other complicated and high-cost tax policies, further increase the difficulty of foreign enterprises to profit and even survive in India.
"National Information Security" said
Analyzing the motivations behind the Indian government's actions, the threat of Chinese apps to India's information security may be the direct reason for the Indian government's issuance of a block order.
India's Ministry of Information Technology said in a statement that it had received numerous complaints from various sources in the past, some of which reported that some mobile apps on Android and iOS platforms had stolen user data in an unauthorized manner and secretly transmitted it to overseas servers. "The compilation, mining and analysis of this data will ultimately affect the sovereign integrity of India, which is a very significant and urgent issue that requires urgent measures."
This is not the first time this voice has appeared in the public eye. As early as early June, the Organizers Weekly, a propaganda position for the BJP's parent organization, the National Volunteer Corps (RSS), published articles by Divya Razdan, a researcher at India's authoritative think tank IDSA, some of which were very consistent with the Indian government's current reasons.
The authors say that while the world is busy fighting the COVID-19 pandemic, China is trying to gain more advantages in commerce, technology and the military, influencing India's domestic governance, economic development and even ideology through social media and other platforms aimed at young people. China's technology companies may become an important channel for the Chinese government to obtain important data and monitor India.
However, the Indian government's statement was refuted by the Chinese Embassy in India. On June 30, the Chinese Embassy in India issued a statement on the matter, saying:
"The Indian side's measures selectively target some Chinese applications, discriminatoryly adopt restrictions, the reasons are vague and far-fetched, the procedures are unfair and open, the abuse of national security exceptions, the suspected violation of relevant WTO rules, contrary to the general trend of international trade and e-commerce development, and even less conducive to the interests of Indian consumers and the promotion of market competition." The application has a large number of users in India, and has been operating in strict accordance with Indian laws and regulations, providing efficient and fast services for Indian consumers, creators and entrepreneurs. ”
Retaliation for the Sino-Indian border standoff
In addition to the Indian government's "National Information Security" said, many people regarded the incident as retaliation for the Indian government's confrontation at the Sino-Indian border.
The confrontation between China and India in the Galwan Valley has been more than two months long. The two governments initially exercised cautious restraint in the hope of promoting the de-escalation of the border situation through military and diplomatic channels, and some preliminary consensus was reached, and the border troops of the two sides began to gradually disengage in some areas. However, the wave of anti-China in India has continued unabated.
On June 8, a one-click removal of Chinese apps called "remove China app" topped the Google Play India download list. Although Google removed the product from the shelves a few days later under pressure and complaints from Chinese Internet companies, many Indian celebrities and government officials expressed their support for the product on social media.
On the evening of June 15, the Indian side unilaterally violated the bilateral agreement and crossed the border, resulting in serious physical clashes between the two sides. The casualties on the Indian side have further intensified the mood of the Indian government and the opposition, and a new wave of anti-China has been launched up and down India.
On June 17, according to the Hindustan Times, Indian security agencies have labeled 52 Chinese apps as "endangering national security" and began asking the Indian government authorities to block these apps, while initiating a recommendation to stop using them for Indian users.
On June 23, the Indian government notified All Ports in India to carry out comprehensive security inspections of Chinese goods, so that international courier companies such as Fedex and DHL stopped receiving round-trip goods between China and India.
In addition, the Indian military has deployed troops on a large scale and is actively engaged in arms purchases from abroad. According to India's Economic Times, India will import a batch of weapons and equipment from France, Israel and the United States, including Rafale fighter jets, Israeli anti-aircraft missile systems and US-made M982 Excalibur guided artillery shells. The United States has asked India for the list of supplies needed and promised to help them as soon as possible.
In the context of the fact that China and India will carry out a new round of consultation and coordination work mechanisms on border affairs, and the relations between the two countries have not yet been derailed, a series of measures unfavorable to Sino-Indian economic and trade relations have been intensively launched by means of domestic nationalist sentiments, which not only won the hearts and minds of the people, but once again swore India's tough stance on China, and at the same time made the heavy ban order announced on the 29th seem to be just a new addition to india's list of anti-China policies and activities listed by the recent public opinion, in order to win the understanding of the outside world, especially China. There is also an extra layer of India's pressure on China, increasing the meaning of chips.
In the list of apps officially announced by the Indian government, many apps have been separated from China at the main level of the company, including directors, shareholders, supervisors and other aspects, but they have not escaped the screening of the Indian government, reflecting that the Indian government's move is actually premeditated.
Inferiority complex
From a broader perspective, the move to ban Chinese mobile apps has highlighted India's inferiority complex to China. As Indian Foreign Minister Jaikhy Sharma said in an interview with the media, The rise of China is one of the current themes facing India's diplomacy.
With the gradual expansion of China-India power and the support of China's "Belt and Road" in South Asian countries such as Bangladesh, Nepal and Pakistan, India's anxiety and inferiority to China have increased unabated. This psychology has been further amplified in the context of the COVID-19 pandemic, which is very consistent with the internal logic of many of India's recent economic policies toward China.
The covid-19 pandemic has disrupted the international industrial chain, and the shutdown of work and production in China has affected the Indian economy downstream of the industrial chain. At this moment, India is mired in the quagmire of the epidemic, but China has taken the lead in promoting the resumption of work and production. This time lag has made India worry that Chinese capital will take advantage of the void to further expand its advantages in India and acquire India's high-quality assets.
According to the Data of the Indian Federation of Industries, India currently has a low degree of localization of electronic components, medical equipment and solar equipment components, and some antibiotics, vitamins, auto parts and dyes still rely heavily on imports from China. China is India's second largest source of imports after the Middle East. Nearly 25% of India's auto parts, 50% of consumer durable parts, 80% to 85% of compressors, and 95% of washing machines are imported from China.
Against this backdrop, Indian Prime Minister Narendra Modi has issued slogans of "self-reliance", the former aiming to promote self-sufficiency in Indian manufacturing, and the latter calling on Indian consumers to use Indian products and services. Corresponding to the above slogan, India is pressing on Chinese capital step by step.
At the government level, since April, India has encouraged more than 1,000 U.S. companies in China to set up factories in India through foreign missions. In addition to the revision of foreign investment policies on the grounds of public safety, Chinese enterprises need to approve the Indian government to increase their holdings or reduce their investment in India.
At the societal level, The Confederation of All India Traders called on All India to boycott Chinese products such as durable consumer goods, toys, furniture fabrics, textiles, construction hardware, footwear, clothing and kitchen supplies in the wake of the border conflict, in a way that would reduce imports of manufactured Chinese goods by $13 billion by December 2021. The ban on China's mobile phone applications is nothing more than a further extension of the logic of this behavior.
In fact, whether it is "de-Sinicization" in the official context, the banning of Chinese mobile phone applications, or the spontaneous "boycott of Chinese goods" by the people, they all reflect the consistent embodiment of Hindu nationalist ideology in the economic field in the process of right-wing Indian society.
Indian Prime Minister Narendra Modi's call for "India's self-reliance" is more like the embodiment of the original BJP's original economic policy of "Swadehi" two decades ago. It is to call on India's economic self-sufficiency – to advocate for the Indian people to buy and use locally manufactured products – to fully reflect local resources and technologies in the national interest of development. India's integration into the international economy should not mean forgetting its national identity, and powerful foreign economic forces should not control indigenous national economic forces. India's economy should first be internally competitive and liberalized, and then opened up from the inside out, not from the outside to the interior.
However, the wave of globalization twenty years ago is in the ascendant, and now in the context of the disruption of the new crown epidemic and the intensification of the Sino-US game, adhering to globalization requires more confidence. In the past, the outsiders in the context of Swadhi were mainly European and American capital, and now, there are more names of a series of Chinese capitals such as Huawei, Tencent, Ali, and ByteDance.
Indians play TikTok
Say goodbye to the possibility of Chinese capital
Judging from the Indian government's current planned and premeditated policy measures, bidding farewell to Chinese capital is a vision of the Indian government and part of its own development plan, but even the most optimistic projections believe that this process will continue for a long time, with too much uncertainty, and the so-called farewell to Chinese capital is more like a political slogan, or a bargaining chip for interest negotiations.
Among the current 30 unicorn Internet companies in India (valued at more than US$1 billion), 18 are clearly involved in Chinese capital, and most of the other companies maintain good relations with Chinese companies or investors to explore the possibility of being invested by Chinese companies. In this state, Chinese capital is forced to withdraw, which will be a huge blow to the Indian Internet.
The only rival of Chinese investment in the Indian Internet industry, the United States, is almost impossible to take over smoothly, helping Indian Internet companies tide over the "lack of money". From the perspective of Europe and the United States, due to the huge impact of the epidemic on the US economy, in the next 1-2 years, European and American capital will be more cautious about foreign investment.
From India's standpoint, for many years, India's resistance to US capital has been in the strategy of "not saying it in the open and not stopping in the dark". Since 2019, the investment of Amazon, Facebook, Walmart and other American companies in India has been obstructed by various disguised obstacles by the Indian side, such as interfering in Walmart's acquisition of Flipkart, launching an investigation into Amazon, and prohibiting Facebook's whatsapp from setting foot in the financial field to apply for a license. This is also why the list does not involve nearly 100% Chinese-owned Indian apps such as share chat, paytm, zomato, etc., and the main personnel, technical means, and the geographical space for daily operation and maintenance are completely "Chinese".
More importantly, there are currently no mature local Internet companies and products in India that can replace the existing Chinese apps, such as tiktok, bigo live, share it, etc. have become national applications. The implementation of the ban order has brought about a regression of the Indian official-private two-sided Internet product experience.
In the list of various types of apps in Google Play, the most commonly used app store in India, There are basically Chinese products competing with Chinese products, and there are few apps from all India. Therefore, the 59 Chinese app products that were blocked this time are mostly the top products in the list of various app stores, but the opportunities of other Chinese-funded apps.
Rather than saying that India has eliminated Chinese-funded apps, it currently looks more like a round of reshuffling of various types of Chinese-funded apps in the Indian market. As for whether the mystery behind this is because other apps are not worthy of being banned, the Indian government has not done all the research, or the Indian government just wants to change a wave of Chinese companies to throw money into India, it is still unknown. The limits of India's policy of suppressing China's economy also need to be carefully observed.
epilogue
In short, if India had not wounded a thousand enemies and lost eight hundred, it would have been impossible to truly bid farewell to Chinese capital if it had not injured a thousand enemies and lost eight hundred of its own, rather than greatly delaying its economic development and achieving "de-Sinicization." As for the extent to which the Indian government is determined today, the key lies in whether there will be specific policies, especially whether specific measures of external prohibition and internal punishment are available. If not, there is no need to worry too much, it is largely a round of "performance"; if there is, then Chinese companies need to be prepared, pay attention to the determination of the Indian side, and make multi-handed preparations in the Indian market for how to deal with strict restrictions or exits.
In today's globalized world, China-India economic and trade relations have experienced decades of development, the two sides have become more and more interdependent, rejecting Chinese capital, and the "de-Sinicization" of the industry has become more like a question of who cannot do without whom. According to the Indian media "Week", China accounts for half of India's foreign trade deficit in Sino-Indian economic and trade relations. China's exports to India increased by 26% year-on-year, while India's exports to China increased by only 13%.
What should worry the Indian government even more is india's economic and trade relations with the world's major economies: the Indo-EU FTA negotiations were suspended in 2013 after a six-year run. The U.S.-India trade talks are not read below. India's trade deficit with ASEAN, Japan and South Korea is widening.
Also as an emerging market, Vietnam has become the most popular destination for investment and businesses to leave China, while the EU's free trade agreement with Vietnam will land in a few months, and as tariffs fall to zero, many of Vietnam's exports to the EU will be cheaper than those exported from India.
Therefore, whether the Modi government plans this blockade in the hope of increasing the bargaining chips of the border confrontation, or continues to continue its right-wing economic nationalist trend, choosing to continue to "de-Sinicize" and reject Chinese capital, India's current choice is to marginalize itself in the torrent of the times.
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