CHINA BUSINESS CASE STUDY

CHINA

Imagine that you wake up one day and go to the market to buy groceries and you get completely shocked. Oil, flour, rice, pulses, everything has become so expensive that it becomes impossible for you to buy these. If this actually happened, what would you do? But, guess what? 

This is actually happening in many countries. Food prices in Pakistan have increased by 30%, the inflation rate has reached 13%, and no one knows about the quantity of Pakistan’s food reserves. No one knows if the country has enough food for its citizens. First insurgent groups and unstable government, then the COVID-19 pandemic, and then Russia Ukraine war. A nation where more than 60% of the population is dependent on wheat consumption alone, has only 3 weeks' worth of wheat reserves left. In Ethiopia, food prices here have risen by 150% since 2021, and the inflation rate has reached 33%. The shocking thing is that this country has no food reserves. Food prices in Egypt and Tunisia have also risen by 35% and their inflation rate has reached 12%. Their situation is also similar to Ethiopia, they also have no food reserves left. But the question is, why is their condition so bad? What is happening here that is being hidden from us? And most importantly, what are the powerful lessons that we as citizens of India can learn from this case study and implement in our life. Imagine getting ready for your office in the morning and as soon as you go out, you see 2 neighbors fighting. One of them tried to cut the other's electricity but blew the entire colony's fuse box. And the other, to make sure no one can go out, has blocked the road with their vehicle. In this situation, the loss is not of the 2 neighbors alone, but of the whole colony. And this is what a war situation looks like. The impact of the Russia-Ukraine war has been a lot on countries like Pakistan, Egypt, and Tunisia. But the frightening thing is that such warlike situations are big opportunities for some countries. Opportunity to seize power, opportunity to control the world. History is proof. When some countries don't even have food in such situations, some countries take advantage and take their global dominance to the next level. But the question is, how do such things happen? So now pay very close attention. Ukraine is Europe's breakfast basket. More than 70% of the country is made up of rich agricultural land. In Ukraine, farming is a front-line job and in 2021, Ukraine earned $28 billion from farming. Ukraine is the world's sixth-largest wheat exporter, which means that 10% of the world's wheat is from Ukraine. Russia and Ukraine combined 1/3rd of the world's wheat supply and 80% of the world's sunflower oil supply. Due to this war, Russia and Ukraine are neither able to produce nor export rice and wheat. As a result, the prices for both goods have risen by 58%. On the one hand, India's food policy experts have been continuously warning us about this, and on the other hand, there's someone who's taking full advantage of the situation, and trying to fully control countries like Egypt, Tunisia, Pakistan, and Ethiopia. And this country is no other than China. China has been parallelly supporting Russia since the war started. When the UK, US, Japan, and Canada put economic sanctions and removed Russian banks from Swift's international payments network, China was the only country, without delay, to give Russia access to its alternative banking systems and capital markets. But interestingly, this is just one side of the story. On the one hand, China is supporting Russia so that Russia stays in a warzone for a long time and its impact is that many countries don't have food, and people in many countries are starving. Along with supporting Russia, China has also emerged as a helping hand. A helping hand to the countries without a food supply. Ethiopia, Egypt, Tunisia, Pakistan, and Sudan, all these countries have no food supply due to the war, and China has emerged as a helping hand during this time. But the question is, why is China supporting both sides? It is just like voting for both Congress and BJP. And this is where China's plan to become a global superpower begins. War is business. It's a bit complicated but understand it carefully. When it comes to food, US and Canada, and to an extent India as well, are self-sufficient nations. 30-40% of the US' calories are in their food surplus reserves which means that even in case of a food shortage, the US can easily survive for 6 months. without any imports. But when it comes to China, China has 150% of its annual consumption in reserves, which means that even in the worst of cases, even in a food crisis, China can survive 1.5 years. When the Russia-Ukraine war started, China bought out 50% of the world's grain production, and to support this activity, this is what China says, "We can never forget what happened in 1958. It still haunts us, we still fear famines, and as a result, we are taking precautionary measures." The story starts in 1958 when Mao Zedong and the Chinese Communist Party, together started the Great Leap Forward Movement, a developmental plan which comes forth as the world's largest man-made disaster. People were divided into small groups called communes and forced to produce steel in their backyards. Private plot farming was abolished and collective farming was forced in which Communist Party controlled the whole produce. On the one hand, due to unproven agricultural techniques crops were failing and on the other hand, lakhs of farmers were forced to produce steel against their will. Things got so bad that to survive, people had to eat flesh from dead bodies. China's man-made disaster killed over 4.5 crore people. This is why China doesn't want to risk food security. But alas, this is only one side of the story. Because the story is not over. Due to the Russia Ukraine war, maximum exports from both have been stopped which has caused problems in food-dependent nations. Sudan, Ethiopia, and Tunisia have everything from agricultural land to farmers but the fertilizers used in farming have to be imported by them. And this is where Russia comes in. Russia is one of the largest fertilizer exporters in the world, and due to the war, Russian exports are stopped. Ukraine's seacoast is 1628 kilometers long and the black sea starts from here. The Black Sea connects to the Mediterranean Sea, from where 1/3rd of the world's trade passes. Due to Russia's naval blockade, Ukraine's ships can't reach the countries in need. In this situation, these countries need a friend, a friend who understands their needs and supports them to have a strong base. And China never loses such opportunities. China has only 20% of the world's population but it has enough food to feed over 50% of the world. And this is where the game begins. War profitability. Whenever a warlike situation arises, China starts piling up its food resources first. In fact, not just now, China has been doing this for years. According to a Bloomberg report, by mid-2022, China will have 69% of the world's corn reserves, 60% rice reserves, and over 51% of wheat reserves. Now the question is, what is China doing, and most importantly, why? Whys is China doing all these things? China searches for small opportunities in weak nations, and to take advantage of it, they create a diplomatic trap. Most Asian and African countries are self-dependent. These countries have resources but due to a lack of infrastructure to mine and process, they have to take the help of countries like China. In countries like Pakistan and Sri Lanka,  China uses its debt-trap diplomacy to gain power, while in other countries it uses food leverage. Now see how this works. In the Russia-Ukraine war, first China deployed economic power to support Putin. Russia is now completely isolated from the west. This has increased Russia's dependence on China. On the other hand, due to this war, countries like Egypt, Tunisia, Ethiopia, and Sudan are facing a food crisis. Taking advantage of this, China is providing them food. In return, China will use its resources for its gain, and moreover, people turn pro-China in these countries. Why?  Because China is helping them in this situation. So, who will the people in these countries support? China So, the game plan starts at the beginning of the war. As soon as the war starts, China stocks up on food. Stocking up food supply, supply in the market reduces. Countries, where there was already a food shortage, face a massive increase in their inflation. When people in these countries cannot afford food, people start to starve and face bad conditions. At this point, China supplies food to these countries. China gets two benefits from this. Number one is access to resources. China gets access to resources it doesn't have. Moreover, China uses these resources to gain power. And second, pro-China people. China provides food to these countries to have the people on its side. Because whoever is providing them food is above God for them at the moment. Now, the most important thing. What are the powerful lessons that we, as citizens of India, can learn from this case study and implement in our lives? The first lesson, avoid the blind following. Never follow anyone blindly. If a country is helping another country so there is definitely something that you can't see. From war to international relations, everything is a business. "You scratch my backside and I'll scratch yours." Instead of blindly following the news, while closely analyzing international diplomatic matters, try to understand what exactly is happening. And believe me, when you'll do this, you will get the answers about what is happening and why. The second lesson is humanity above all. Nothing is wrong or right in this world. What is right for one may be wrong for another. But the important thing is that we as citizens, before categorizing as right or wrong, should keep humanity above all. But it is important that we as citizens of India, on a personal level, before supporting any nation or party we should support humanity. Because as I said, one thing may be right for one and wrong for another. Third and most importantly, study actions and not opinions. Whenever something happens in the world, people give their opinions, which is okay. But as smart citizens, it is our responsibility that closely studies the things happening around us and then analyze them and not trust the things the media tells us. Anti-Chinese news runs on US news, Anti-US news runs on Chinese news, now decide who is right and who is wrong. Everyone has their own personal biases. That's why the best thing to do is study the facts and evidence rather than listen to others' opinions and form your opinion.