China's Huawei offers to share source code

[sohan]

Please provide more information on how this is in any conflict with WTO agreements etc.

 

[Martian2]

@ Martian2

What WTO or ethics your are talking about? china creates trade barriers, restrictions, devalue its currency etc. etc. its a fact.

BTW, this incident shows the way how India should tackle chinese menace.

You are making baseless accusations. The most obvious and easiest to disprove is that China has "devalued its currency." To my knowledge, China has appreciated her currency by 21% in the last five years from 8.27 yuan per dollar to the current 6.83 yuan per dollar (see newslink below).

On the other hand, the Indian Rupee started 2005 at 43.62 per U.S. dollar (see Monthly Average Graph (Indian Rupee, American Dollar) 2005). The Rupee is currently at 45.18 per U.S. dollar (see Rupee strengthens to 45.18 against dollar).

During the last five years, China's currency has appreciated 21% against the U.S. dollar. On the other hand, India's Rupee has depreciated by roughly 3% (e.g. increase from 43.62 to 45.18 Rupees per dollar). Are you serious about making the ridiculous claim that China has been devaluing her currency, when it is India's currency that has actually fallen in value against the dollar?

Analysts: China Policy Chnges Mulled; Spillover Effects Feared | iMarketNews.com

"Wednesday, May 12, 2010 - 14:09
Analysts: China Policy Chnges Mulled; Spillover Effects Feared

Wednesday's fixing brings the yuan's gains against the greenback to 21.22% since currency reforms were announced on July 21, 2005, including that day's one-off 2.1% revaluation."

 

[Martian2]

Please provide more information on how this is in any conflict with WTO agreements etc.

See post #7. India can block Chinese imports "if the Chinese imports are hurting Indian companies." Since India doesn't have a telecoms manufacturing industry, there is no reasonable basis to block the import of legitimate merchandise goods from China for the civilian market.

 

[pmukherjee]

Does, "blackmailing foreign companies into employing local workers and revealing source codes" sound familiar?[/I]

Oh, Indians... -_-

Oh Canadian(?). Very simple, don't want to be black mailed? Just get out.

 

[deepak75]

I disagree. In theory, you may be correct to a limited extent. However, American and European companies are notorious for protecting their profit margins and generating shareholder value. Also, the importation of expensive Western manufacturing equipment, replacement parts, components, and salaries for Western plant technicians, engineers, and managers mean that a Western telecoms plant in India will be far more expensive than a Chinese version.

All companies are in the business for money. No one does business for charity. That is the principle of business. So American or other western companies will be equally looking for profits as the Chinese companies are looking for.

Re the salaries etc. operational expenses, how does it matter. For GoI it needs to be manufactured in India with the security norms that GoI may set + local employment generation. So whichever company does this, it is good for them. If Huawei or ZTE do it, then fine, they can also participate in the process and let the best offer win!

I've heard many similar arguments here in the United States and it never turns out that way. For example, they promised us lower prices from increased competition and greater efficiency in proposing to deregulate the electricity market. Instead, they are now charging us a new "distribution fee" in addition to the old "generation charge." To make a long story short, I am paying twice to thrice the monthly bills for electricity.

There is a difference. Here we are talking about capital equipment sales and not about Install of capacity and distribution basis.

Anyway, I don't think that India can force an American or European company to manufacture in India under WTO rules. India has singled out Huawei and ZTE based on the pretext of "security concerns." This dirty trick/hardball tactic won't work and do not apply to American and European telecoms companies.

There is no WTO violation in this aspect. National security is paramount for India and it is providing everybody a level playing field by saying that you have to manufacture to India's specification and do business in India! Simple!

 

[deepak75]

This is what happens when you don't have Indian companies that can manufacture such gear.

My friend, this is how the manufacturing is initiated. India is the 2nd largest growing market and will be the largest market in less than 10 years in telephony. So it is time that the companies that doing business in India should invest and prove that they are here for long term and not for only sales in short term and to only make profits.

 

[deepak75]

I never suggested otherwise. However, this behavior from the Indian government is new and very un-Indian. Oh well, so much for pacifist Gandhian India. I like the old India better. I think India has decided that it wants to become more like China.

I was surprised by the Indian government's decision to "squeeze" Huawei and ZTE. India is showing an economic ferociousness and determination that I don't believe that I've seen before.

In the past, China played hardball with U.S. companies. However, Chinese action was entirely legal. The U.S. made a serious error in not writing more conditions for China's entry into the WTO. You can't complain if you failed to foresee the rapid growth and importance of China's domestic market and government procurement.

On the other hand, India is playing hardball with China and taking it one step further. India found a public-relations weakness in the supposed PLA roots of Huawei. Using this PLA specter and the absurd ghost of 1962 (which was 48 years ago and happened before most of us were born), India has decided to ignore the WTO obligations and proclaim that Huawei and ZTE may have to be banned on "security concerns."

I think I'll call this the Indian variation of the traditional Chinese "hardball" strategy. In this Indian variation, Huawei and ZTE will have to keep bending over and satisfy a long stream of Indian demands.

In conclusion, India is doing to China what China did to the U.S. However, the key difference is that India seems to be "cheating" and violating WTO rules. This is different from the upright Chinese, who never gave the Americans an extra inch than what was called for in the WTO accession obligations. Come on India, remember Gandhi!

My friend you are mistaken on this. We are still equally Gandhian. It is just that we want the profits from our market to come to India also and we want to be prosperous Gandhians.

 

[deepak75]

You are making baseless accusations. The most obvious and easiest to disprove is that China has "devalued its currency." To my knowledge, China has appreciated her currency by 21% in the last five years from 8.27 yuan per dollar to the current 6.83 yuan per dollar (see newslink below).

On the other hand, the Indian Rupee started 2005 at 43.62 per U.S. dollar (see Monthly Average Graph (Indian Rupee, American Dollar) 2005 ). The Rupee is currently at 45.18 per U.S. dollar (see Rupee strengthens to 45.18 against dollar ).

During the last five years, China's currency has appreciated 21% against the U.S. dollar. On the other hand, India's Rupee has depreciated by roughly 3% (e.g. increase from 43.62 to 45.18 Rupees per dollar). Are you serious about making the ridiculous claim that China has been devaluing her currency, when it is India's currency that has actually fallen in value against the dollar?

Analysts: China Policy Chnges Mulled; Spillover Effects Feared | iMarketNews.com

"Wednesday, May 12, 2010 - 14:09
Analysts: China Policy Chnges Mulled; Spillover Effects Feared

Wednesday's fixing brings the yuan's gains against the greenback to 21.22% since currency reforms were announced on July 21, 2005, including that day's one-off 2.1% revaluation."

It does not matter how much you have appreciate your currency. The fact is that it is still pegged to the USD that gives you an unfair advantage and disadvantages almost everybody in Asia including the Koreans. So the currency is still not free floating.

 

[deepak75]

See post #7. India can block Chinese imports "if the Chinese imports are hurting Indian companies." Since India doesn't have a telecoms manufacturing industry, there is no reasonable basis to block the import of legitimate merchandise goods from China for the civilian market.

It is simple that national security is paramount for India or any country's interest. You also did not agree to what google wanted and they had to wrap the business and go. Similiarly Rio Tinto employees are still in custody because China said that they stole state secrets. So obviously it was done for national security and now India is doing this for national security.

The point is that India is not telling Huawei or ZTE to stop business in India. We just want that you manufacture here and supply at the cheapest price. It is our duty to provide level playing field to all businesses from the world and let the best offer win!

 

[Martian2]

It does not matter how much you have appreciate your currency. The fact is that it is still pegged to the USD that gives you an unfair advantage and disadvantages almost everybody in Asia including the Koreans. So the currency is still not free floating.

I have no idea on how to overcome Indian logic. An Indian made the claim that China cheats by devaluing her currency. I provided proof that China has appreciated her currency by 21% in the last five years. During the same time, India has depreciated her currency by 3%. In total, India has gained a roughly 25% advantage against Chinese manufacturers.

Despite the facts, you are still going to claim that China has an unfair advantage? There is nothing further that I can do. Many countries peg their currencies to the U.S. dollar to control inflation and/or due to an insufficiently developed financial system. Pegging the dollar to the U.S. currency is not cheating. India has gained an unfair 25% advantage since 2005 and you're still complaining. Give me a break.

Regarding the Koreans, they are in the same situation as India. In 2005, approximately 1000 Korean Wons equaled one U.S. dollar. Today, it requires 1100 Korean Wons to buy one U.S. dollar (see http://www.forecast-chart.com/exchange-korean-won.html). During the last five years, the Korean Won has depreciated roughly 10% against the U.S. dollar.

Let's summarize. During the last five years, India's Rupee has depreciated 3% against the U.S. dollar. The Korea Won has depreciated 10% against the U.S. dollar. The Chinese Yuan has appreciated 21% against the U.S. dollar. Tell me again, which country is cheating by devaluing their currency and gaining an unfair export advantage?

 

[deepak75]

I have no idea on how to overcome Indian logic. An Indian made the claim that China cheats by devaluing her currency. I provided proof that China has appreciated her currency by 21% in the last five years. During the same time, India has depreciated her currency by 3%. In total, India has gained a roughly 25% advantage against Chinese manufacturers.

Despite the facts, you are still going to claim that China has an unfair advantage? There is nothing further that I can do. Many countries peg their currencies to the U.S. dollar to control inflation and/or due to an insufficiently developed financial system. Pegging the dollar to the U.S. currency is not cheating. India has gained an unfair 25% advantage since 2005 and you're still complaining. Give me a break.

Regarding the Koreans, they are in the same situation as India. In 2005, approximately 1000 Korean Wons equaled one U.S. dollar. Today, it requires 1100 Korean Wons to buy one U.S. dollar (see Korean Won to US Dollar Exchange Graph). During the last five years, the Korean Won has depreciated roughly 10% against the U.S. dollar.

Let's summarize. During the last five years, India's Rupee has depreciated 3% against the U.S. dollar. The Korea Won has depreciated 10% against the U.S. dollar. The Chinese Yuan has appreciated 21% against the U.S. dollar. Tell me again, which country is cheating by devaluing their currency and gaining an unfair export advantage?

Let me explain you in more simple terms and give you example of Shanghai property where now anybody with a house is very rich.

Imagine that in 2005 you can buy 2 houses in Shanghai for 100 Yuan. But now because there is very high demand then now can buy only 1 house for 100 yuan. So the house in Shanghai has apprecaited 50% because of increased demand for rich houses.

In the same manner when there is a higher trade surplus by China then there is more demand for Yuan and it should appreciate.

But on the other hand, China is not floating it freely and keeping it fix to the Dollar. Indian Rupee or Korean Won change rate daily to the USD depending on the trade surplus and the price of commodities and demand for Oil etc. but Chinese Yuan remains fixed everyday.

This makes the exports of other countries more expensive than China in USD terms.

Now let us see this in real exchange terms:

http://www.forecast-chart.com/exchange-chinese-yuan.html

In 1990 1 USD = 4.8 Yuan
1n 2010 1 USD = 7 Yuan.

So depreciation in 10 years = 2.2 Yuan or 46%
But for INR:

http://www.forecast-chart.com/exchange-indian-rupee.html

In 1990 1USD = 16 Rupees
In 2010 1USD = 44 Rupees

So depeciation in 10 years = 28 Rupees or 175%

So now you see how Chinese government is cheating the world?

 

[Martian2]

Let me explain you in more simple terms and give you example of Shanghai property where now anybody with a house is very rich.

Imagine that in 2005 you can buy 2 houses in Shanghai for 100 Yuan. But now because there is very high demand then now can buy only 1 house for 100 yuan. So the house in Shanghai has apprecaited 50% because of increased demand for rich houses.

In the same manner when there is a higher trade surplus by China then there is more demand for Yuan and it should appreciate.

But on the other hand, China is not floating it freely and keeping it fix to the Dollar. Indian Rupee or Korean Won change rate daily to the USD depending on the trade surplus and the price of commodities and demand for Oil etc. but Chinese Yuan remains fixed everyday.

This makes the exports of other countries more expensive than China in USD terms.

Now let us see this in real exchange terms:

Chinese Yuan to US Dollar Exchange Graph

In 1990 1 USD = 4.8 Yuan
1n 2010 1 USD = 7 Yuan.

So depreciation in 10 years = 2.2 Yuan or 46%
But for INR:

Indian Rupee to US Dollar Exchange Graph

In 1990 1USD = 16 Rupees
In 2010 1USD = 44 Rupees

So depeciation in 10 years = 28 Rupees or 175%

So now you see how Chinese government is cheating the world?

Why did you pick 1990? In 1990, Russia did not exist. The world was still in the Cold War and the Soviet Union was still around. You actually reached back one generation? Are you nuts?

Why not pick 1950?

I selected five years ago, because it's reasonable to claim that China's currency policy has disadvantaged India's manufacturers in the last few years. To the contrary, the opposite is true.

Instead, you picked a silly date of 1990. Back then, India was still a closed economy. India did not liberalize until 1991.

Here's the bottom line. China's currency policy has resulted in a roughly cumulative 24% (e.g 3% Indian depreciation plus 21% Chinese appreciation) advantage for India's exporters in the last five years. For Korean exporters, the cumulative advantage is roughly 31% (e.g. 10% Korean depreciation plus 21% Chinese appreciation).

Stop complaining that China's currency policy is hurting your exporters. Your exporters are far more competitive today than they were five years ago.

 

[deepak75]

Why did you pick 1990? Why not 1950?

I picked five years ago, because it's reasonable to claim that China's currency policy has disadvantaged India's manufacturers in the last few years. To the contrary, the opposite is true.

Instead, you picked a silly date of 1990. Back then, India was still a closed economy. India did not liberalize until 1991.

Here's the bottom line. China's currency policy has resulted in a roughly cumulative 24% (e.g 3% Indian depreciation plus 21% Chinese appreciation) advantage for India's exporters in the last five years. For Korean exporters, the cumulative advantage is roughly 31% (e.g. 10% Korean depreciation plus 21% Chinese appreciation).

Stop complaining that China's currency policy is hurting your exporters. Your exporters are far more competitive today than they were five years ago.

I picked up from 1990 because as you said that the economy of India opened in 1991 so it is a very good date to see how the currencies have moved. Don't you agree.

And seeing from 2005 does not make any sense because China fixed the currency at same level in 1996 to 2006. In this period it accumulated over a trillion dollar of trade surplus from the world but still did not move its currency even 1 cent and that is why the export oriented economies of Korea + South East Asia were killed by the Chinese government policies.

Here see the graphs again. You will understand better:

Chinese Yuan to US Dollar Exchange Graph


Indian Rupee to US Dollar Exchange Graph

True bottom line is:

So depreciation = 2.2 Yuan or 46% for Chinese Yuan
So depeciation = 28 Rupees or 175% for Indian Rupees

 

[airuah]

Indian telecom ban violates WTO rules, say experts

"Indian telecom ban violates WTO rules, say experts
By Ding Qingfen and Wang Xing (China Daily)
Updated: 2010-05-06 09:16

BEIJING - India's move to prevent or make it more difficult for telecommunication companies to buy equipment from Chinese companies is a violation of the World Trade Organization (WTO) norms and clearly smacks of trade protectionism, experts said on Wednesday.


[B]"India cannot reject Chinese imports citing security reasons. An import ban is warranted only if the Chinese imports are hurting Indian companies," he said.[/B]



[Note: Thank you to charles koon for finding this article.]

what a country cant stop an import for security reasons......?????????????

then any country can sell arms to the anti nationals in another country.....and the affected country cant do anything about it coz a ban on arms is against wto ??????either the article is crap or the so called experts were hired from a mental asylum"


and in the very next line in the article"It is pure trade protectionism and the Chinese side must seek consultations and a proper way out," said Fu Donghui, managing director of Allbright Law Firm Beijing, a law firm that specializes in trade remedy cases."


ok leave aside...the previous statement.....so..according to this very next contradicting statement "india is protecting its companies by banning chinese companies ......so according to the very same wto rules a country can ban import if it hurts local companies......so....the ban is legal by law...dont you think??????.......which again reaffirms the hireing of experts from mental asylums........and there is one person here who actually thanks for the article......


and to the thread starter"india has not asked heuwei to open factory of reveal sourse codes....infact it does not want heuwei products ...its only that the chinese company is desperate to lose its its major export destination......"...hope the indian govt does not allow the company here......

 

[deepak75]

what a country cant stop an import for security reasons......?????????????

then any country can sell arms to the anti nationals in another country.....and the affected country cant do anything about it coz a ban on arms is against wto ??????either the article is crap or the so called experts were hired from a mental asylum"

Bhai the Chinese did not reach where they are today without smart people. Their government policy is different but Chinese experts are very wise. So we should respect them and learn from their success.

Unse seekh kar hum bhi kaamyaab ho jaayenge.