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India concerned about widening trade deficit with China

You open the market and allow consumers and suppliers to buy the goods they want. It depends on quality and price. If Indian companies (that's if there are Indian companies that can make these goods which I doubt) cannot give products with good quality and affordable prices then it hurts them if they are priced out if buying their preferable Chinese goods.

You are shooting yourself in the foot by hurting your own consumers and companies.

Nobody does that. China certainly doesn't. Heck, you even have a limit to the number of hollwood movies that can be screened and plenty of rules of how that can be done including revenue sharing. Same in your car market where ther is an insistence for local manufacture of any car to necessarily have a local partner. What is good for the goose must certainly be good for the gander, what?

80-90% of the REE's are made in China. The only alternatives you might find might be from the russian military stockpiles . Second,the time needed to establish REE production facilities and their support facilities is over 10 years according to US department of Defense.


Still no issue. As long as China is selling the product, India is relatively insulated. If China prices direct sales high only for India (in retaliation, as you suggest), India will simply source the same from a 3rd country with a small premium i.e. a bit like India-Pakistan trade that happens via Dubai.
 
REE's are not Rare ( don't go by name ). China has a major share in that market because it sells it's rare earth minerals, cheap.

If it raises tariff, mining in other places ( notably India and US ) would become viable.

Yes.Cheap is the word.But the production processes of REE's have been exponentially improved by the chinese,along with the initial cheap labor component also(but that is not main now).

The only guys who I know have improved production processes for REE's are Lynas and their competitiveness with Chinese remains to be seen.




Rare compared to most elements,but not as rare as silver or gold. Agreed.

If it raises tariff, mining in other places ( notably India and US ) would become viable.

Source: http://www.defence.pk/forums/centra...ning-trade-deficit-china-9.html#ixzz2ftEC5t9T

And establishing the Supply chain will take 10 years atleast for REE's. Plus many production processes that US developed are not as competitive as the Chinese.
 
Still no issue. As long as China is selling the product, India is relatively insulated. If China prices direct sales high only for India (in retaliation, as you suggest), India will simply source the same from a 3rd country with a small premium i.e. a bit like India-Pakistan trade that happens via Dubai.

Source: http://www.defence.pk/forums/centra...ing-trade-deficit-china-10.html#ixzz2ftFtkWaB

Agreed. China recently imposed some REE quotas and many companies bought REE's via shady methods.
 
So you do believe that chinese products are prone to restrictive practices?

BTW the news about GOI thinking to bring in new manufacturing policy in which every foreign company selling products in India need to have 30 to 40% part of manufacturing process done in India, has something do with "widening deficit"?

30 to 40% of manufacturing process refers to manufacturing process involving single product i.e a typical Sony TV, according to this policy will witness 30 to 40% part of its manufacturing process done in India.
@Bang Galore>

Indian government officials only seem to work in crisis mode alone. The problem could have been spotted from a mile away coming towards us but they wait till there is a first class crisis before doing anything. The worst possible time to implement such decisions. So much easier to convince companies to invest in a bouyant economy not a floundering one.
 
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80-90% of the REE's are made in China. The only alternatives you might find might be from the russian military stockpiles . Second,the time needed to establish REE production facilities and their support facilities is over 10 years according to US department of Defense.

We already have REE production facilities... But lack of experiance is the problem... Don't worry man... We already on the way.... We can gradually stop REE imports.... Like this we have capabilities in every fields...

India-Japan Join Hands to Challenge China’s Rare Earth Monopoly



The Indian Prime Minister was forced to cancel his planned visit to Japan this month after the Japanese government dissolved the lower house of parliament and announced early elections. An important trade pact in respect of rare earth materials was proposed to be signed during the visit. Fortunately, the cancellation of the Indian Prime Minister’s visit has not come in the way of the realisation of this pact. On November 16, a trade pact allowing the import of 4100 tonnes of Rare Earth Elements (REE) material (amounts to roughly 10 to 15 per cent of Japan's peak annual demand) from India has been signed by the two countries. This clearly indicates the importance and urgency of getting the deal through.

China presently controls almost 97 per cent of the world’s REE market and has developed a monopolistic hold on it. Japan is the world’s largest importer of REE, mainly because of its major industrial base in electronics and the consequent demand for a significant amount of REE. REEs are required for computers, laptops and televisions. They also have significant usage in mobile telephony and Magnetic Resonance Imaging (MRI) equipment. Countries are overprotective about imports and exports of REEs because of their utility in strategic sectors such as missiles. For sometime now China has been found linking exports of REEs to Japan with territorial disputes. Naturally, Japan has been on the lookout for alternate supply chains. Sensing this opportunity India is trying to fill the void, at least partially.

REEs include elements like Lanthanum, Cerium, Praseodymium, Erbium, Gadolinium, etc. China has been effectively controlling the global REE market for many years. In 2012, it published the first ever White Paper on REE tilted "Situations and Policies of China's Rare Earth Industry", which highlighted the need for the ‘sustainable and healthy development of this industry’. But in reality China has not followed the ‘healthy’ trend and has begun to use REE exports to Japan as a diplomatic lever especially over their maritime territorial dispute.

India is known to be the second largest producer of REEs. According to one estimate made in 2010, China produced 1.3 lakh tonnes of REEs while India’s output was 2,700 tonnes. India, in spite of being a small player in comparison with China, has been in the business of REE since the 1950s when Indian Rare Earths Ltd. was established. The recent agreement between Japan and India on REE could also be viewed as a continuation of their existing relationship in the field of REEs. Japan has already made investments in this regard in India. A subsidiary of Toyota Tsusho called Toyotsu Rare Earths India Pvt. Ltd. is based at Vishakapatnam, Andhra Pradesh, and is involved in the production of some rare earth elements. The company operates a monazite sand rare earth production base and is involved in the making of rare earths such as neodymium, lanthanum and cerium. It receives the supply of monazite sand from Indian Rare Earths Ltd.

The most interesting aspect of India and Japan coming together is that they are also proposing to engage with other states where REEs are available for excavation. India and Japan want to develop a joint venture (JV) in third countries, particularly in under-developed states. They are proposing to engage states such as Afghanistan and Kazakhstan basically to secure their supply sources. The rare-earth resources in Afghanistan (Helmand province) are estimated to be one million tonnes; and, particularly for India, engagement in Afghanistan has considerable strategic significance too. With regard to Kazakhstan too, India and Japan aim to undertake joint development of rare-earth assets. All these efforts could assist India and Japan to develop a global market for REEs.

Japan is aware of India’s huge reserves of REEs in Odisha. Recently, Indian Rare Earths Ltd., which comes under the Department of Atomic Energy, has sought clearance for rare earths mining from sand in the coastal stretch of around 2,500 hectares at Bramhagiri (Puri district). Japan has earmarked a $1.5-billion corpus for developing alternative sources of rare earths and India needs to attract Japanese investment.

Both India and Japan understand that the REE sector offers commercial, strategic and diplomatic advantages. At the same time, ensuring the regular supply of REEs is going to be a time consuming process. If they invest today in various projects then it could take approximately five years to double or triple output. Over the years many countries in the world had stopped making investments in the mining of REEs because financially it was more viable to import from China. However, this had led to China developing a monopoly in this sector.

For countries like India there is much to learn from the REE experience. It is important to appreciate that with regard to critical materials and major minerals it is essential to plan thoughtfully. There should be minimal dependence on other countries with regard to the strategic materials required in the energy, aerospace, nuclear and defence sectors. Also, there is a need to constantly monitor the ongoing trends in areas like semiconductors, silicon technology, chips manufacture, thin films, nanotechnologies, etc. This could assist in undertaking mid-course corrections in policies with respect to strategic materials, if necessary. The presence or absences of strategic materials do have both short-term and long-term impacts on the country’s economy as well as on military readiness.
 
And establishing the Supply chain will take 10 years atleast for REE's. Plus many production processes that US developed are not as competitive as the Chinese.

Establishing supply chain for minerals do not take decades and India had entered in joint venture with Japan to produce Rare earth minerals and US has reopned it's old mines after Chinese ban on exports in 2011.

The Rare Earth Crisis Is Over - Forbes

US Lobbying Group Warns Against Rare Earth Stockpile Plan | Rare Earth Investing News

China’s grip on the world’s rare earth market may be slipping


+ Rare Earth futures are crashing due to oversupply. It is not a suppliers market anymore but is a buyer's market.
 
Establishing supply chain for minerals do not take decades and India had entered in joint venture with Japan to produce Rare earth minerals and US has reopned it's old mines after Chinese ban on exports in 2011.

The Rare Earth Crisis Is Over - Forbes

US Lobbying Group Warns Against Rare Earth Stockpile Plan | Rare Earth Investing News

China’s grip on the world’s rare earth market may be slipping


+ Rare Earth futures are crashing due to oversupply. It is not a suppliers market anymore but is a buyer's market.


Did you read through your own articles or is it just you want to google and prove yourself right huh? With exception of Lynas I do not know of others who replicating what Lynas has done. Molycorp claims turned out to be total failures.

China’s REE export numbers rise in February

China’s exports of rare earth primary materials increased by 289.12 percent in February, to 1,106 metric tons (MT), compared with the same month in 2012; prices continue to drop month-on-month.

An industry analyst told Metal-Pages that China’s exports of rare earths increased sharply in February because the country exported only 284 MT in the same period last year and was assisted when prices continued to fall throughout the month, which in turn encouraged buyers to restock.

I was a regular reader of Rare earth investing. Do you even know the magnitude of shoot up in REE prices that happened in 2011-2012?

It is not a suppliers market anymore but is a buyer's market

More related to removal of quotas as the chinese big players were losing due to the illegal sales of REE the chinese small player were doing.
@Lil Mathew,

From your own article:
China presently controls almost 97 per cent of the world’s REE market and has developed a monopolistic hold on it.

Source: http://www.defence.pk/forums/centra...ing-trade-deficit-china-10.html#ixzz2ftL8tEg5

According to one estimate made in 2010, China produced 1.3 lakh tonnes of REEs while India’s output was 2,700 tonnes.

Source: http://www.defence.pk/forums/centra...ing-trade-deficit-china-10.html#ixzz2ftLJC91g

Establishing supply chain for minerals do not take decades

Source: http://www.defence.pk/forums/centra...ing-trade-deficit-china-10.html#ixzz2ftLeVD23

Does take 10 years according to US Dod and your sources are contradicting you. Maybe you people should do some real research instead of copy and paste from Google. I mean reading some research papers on the supply chain aspects (inclusive of mining,mid level processing and refining to produce requisite oxides)
 
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This is a much better post without the usual mandatory abuse. However it is still wrong and this is why.

You have given the example of a tv. A simple & straightforward example. An Indian consumer in the market for such a tv, would have the option of a Chinese one or a U.S.one (your choice) Your argument is that since the cost of an American TV would be more than the Chinese one, it would add to inflation. That would only work if the consumer & all such buy those TV's at any price. In the face of increasing prices, there will be a drop in demand. This is true for a whole bunch of products. If you further assume that such a situation opens the market for an Indian alternative, including Chinese , American or any other companies opening an Indian unit, you would see that the situation is not as simple as made out by you. For example Nokia opened an Indian unit for mobiles because they percieved a market, that has now been swamped by phones coming in from China. If for whatever reason, there is a tightening of supply, demand will eventually force a local alternative. Unlike other countries, India's size of population is an asset. Regardless of how rich people are, the Indian market for consumer goods, by sheer number, will always be bigger than most other countries. People cannot buy 10 phones each to make up the number. Eventually that market, as it goes higher up the chain, is not one that can be ignored. In the long term, very few want to leave this market unexplored. The counter example to yours would be in automobiles. India's high duty structure has created a rubust domestic market, including of many international players who even use India as an export base. According to you, such a thing could never happen. Yet it exists. Inspite of China being a bigger player.

Chinese imports do help in giving many Indians access to lower priced products but to take away from that the idea that Chinese imports are simply untouchable would be a very wrong reading.

I'm always open to different points of view, I certainly do not believe that my view is the only one nor that it is necessarily the correct one. It is however difficult to have respect for someone who prances around with a chip on their shoulder.

Once again you make a complete fool of yourself with your sheer ignorance :lol:

By putting tariffs and increasing prices you price consumers out of the market. They don't buy that good as it becomes unaffordable to them. You are just making a person that could afford something before and make it unaffordable to them after applying tariffs. You are making your population poor and worse off as their living standards drop by increasing prices.

The fact the Japanese cars came to the scene with lower cost cars made so many people around the world afford to buy a car which only the elites could buy previously as expensive European and American cars were unaffordable which was beyond the price range of ordinary people.

Your point of automobiles made in India due to tariffs is wrong as every country has an automobile industry despite tariffs or no tariffs just look at the US. They still make automobiles despite losing pretty much all other manufacturing industries. India cannot make other goods which we make because we have cornered the supply chain from the raw material to components to the finished product. It's very difficult for India or anyone else to do that for other industries. You need low regulation, low taxes, good infrastructure and rule of law to have a strong manufacturing base to produce all goods. India can only do this on online forums.

If India puts tariffs on Chinese imports, India will suffer as people cannot afford our goods and Indian companies cannot make it themselves due to higher import prices of inputs such as raw materials and components. You don't have the supply chains. Simple as that.

If countries could put tariffs on everything and hope domestic manufacturing rises then every country would do it and we would have no trade. But you reduce competition and increases prices and lowers quality. By having open trade you give consumers more options to various goods.
 
While the Lynas Corp. Mt Weld project and Molycorp’s Mountain Pass operation are projected to
come on-stream in 2012, with annual capacity to produce a total of 40,000 mt by 2013 (and
additional potential annual capacity of 20,000 mt from Molycorp’s Mountain Pass mine by the
end of 2013), most new (greenfield) mining projects could easily take 10 years for development.
In the long run, however, the USGS expects that global reserves and undiscovered resources are
large enough to meet global demand.
http://www.fas.org/sgp/crs/natsec/R41347.pdf

And note here,the figures are for just for the mining aspects ,not concentration and refining part of the supply chain. Currently both these components are primarily in China ,so for next 2 decades , It will be hard to break the chinese monopoly. And Molycorp has been a total failure to achieving its claims.Only Lynas has walked the talk.

Next time,indians here should read research papers instead of copy paste from Google Page 1.

China continues to control the rare earth industry despite attempts from companies like Molycorp (MCP) and Lynas (LYSCF.PK) to begin production. Both companies have been plagued by delays and obstacles. Mining and refining rare earths is not an easy ballgame, as it requires advanced metallurgy and favorable geopolitics.

For decades, the world has been relying on cheap rare earths from China. Nevertheless, this will change rapidly over the next few years. The Chinese are especially short on the critical rare earths needed for permanent magnets, wind turbines, guided missiles and lighting, as they are building their own facilities to manufacture these finished products.

Molycorp and Lynas should be able to supply a large amount of light rare earths after they work out their issues. However, Lynas is still dealing with protestors in Malaysia, and Molycorp is dealing with delays and rising costs to start production. The disappointing performance in these two equities has hurt the entire sector.
http://www.marketoracle.co.uk/Article38786.html

The Critical Metals Report: In a presentation at the China Investment Conference in December, you said that over the last 20 years the U.S. government has mismanaged its supplies of critical metals to the point where it depends almost exclusively on foreign sources. How did this happen?

Michael Berry: It's just now starting to dawn on Washington that we don't have a stockpile. We had a stockpile through World War I and World War II (WWII) that was necessary to our national security. The U.S. was the biggest producer of rare earth elements (REEs) in the 1970s and 1980s. But then we allowed China to undercut our prices and we shut down the Mountain Pass mine, which was one of the largest if not the largest producer of rare earths in the world. We lost not only production and access to REEs, which are critical for weapons systems, automobiles, alternative energy and a number of other applications, but we lost the processing chain that actually integrates and creates the metal, creates the alloy and magnets, and integrates it into material. China now controls these markets. There are four or five pieces of legislation pending in Washington, but it will take a decade or more to replace and rebuild these crucial supply chains.
http://www.marketoracle.co.uk/Article32560.html
 
Its not only India having issues with Chinese Export Subsidies... entire world seems to be taking notice and gearing up policies against that.

Read this:
How Chinese Subsidies Changed the World
Usha Haley: How Chinese Subsidies Changed the World

and read this :

http://cep.lse.ac.uk/pubs/download/dp1182.pdf
http://siepr.stanford.edu/?q=/system/files/shared/China Manufacturing Subsidy_WP480.pdf
When you talk something, should provide solid data
In 2012, China export 2.089trillion$, import 1.82trillion$, trade surplus 231billion$
in which with EU: export 334 billion $, import 212billion$, trade surplus 122billion$
with USA: export 352 billion $, import 133billion$, trade surplus 219billion$

That means China has surplus 347billion$ with EU and USA, and 116 billion $ deficit with all the world except EU and USA
 
You don't get the point Do you..

I am saying and providing documented proofs around...how Chinese Government encourages Institutionalized unfair trade practices to create a monopoly
 
Cheap and sub standard Chinese products can easily be restricted by non tariff barriers.:azn:

But, India needs not to do it. With collapsing Chinese growth , fake data, manufacturing erosion and steep rising labor costs China is automatically loosing grip.:omghaha:

China Loses Edge As World's Factory Floor - WSJ.com

The National: Rising labour costs erode China's competitiveness | China Labour Bulletin

China is losing its manufacturing lead - FT.com

China Export Gains Seen Halved With Fake-Data Crackdown - Bloomberg

China can even fake data upto 50%!!!:woot: OH!Holy Mary!!!(Caught red handed:ashamed:)
 
Cheap and sub standard Chinese products can easily be restricted by non tariff barriers.:azn:

But, India needs not to do it. With collapsing Chinese growth , fake data, manufacturing erosion and steep rising labor costs China is automatically loosing grip.:omghaha:

China Loses Edge As World's Factory Floor - WSJ.com

The National: Rising labour costs erode China's competitiveness | China Labour Bulletin

China is losing its manufacturing lead - FT.com

China Export Gains Seen Halved With Fake-Data Crackdown - Bloomberg

China can even fake data upto 50%!!!:woot: OH!Holy Mary!!!(Caught red handed:ashamed:)
Agree with you, China has deficit with India, so nothing should be worried for India, India should import more from China to balance trade surplus
 
Agree with you, China has deficit with India, so nothing should be worried for India, India should import more from China to balance trade surplus
And, I know that lies get exposed one day. There should be a limit to faking data.:chilli:
 
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