Ban on Chinese apps: Why China can’t expect relief at WTO | 3 reasons

Days after India banned 59 Chinese apps for being “prejudicial to sovereignty of India, defence of India, security of state and public order”, China on Thursday threatened to go to the World Trade Organisation (WTO) against the move.

China has called the decision to ban its smart phone apps as “selective and discriminatory” and in violation of WTO rules of fair trade practices.

Chinese embassy spokesperson Ji Rong in a statement said, “India’s measure selectively and discriminatorily aims at certain Chinese apps on ambiguous and far-fetched grounds, runs against fair and transparent procedure requirements, abuses national security exceptions and violating WTO rules.”

However, even if China approaches the WTO, of India which is a founder member and which China joined only in 2011, it is unlikely to get relief in this matter. Here are three big reasons why WTO is likely to back India’s decision:

1. There is no bilateral agreement between India and China with regard to smart phone apps. Chinese companies launched their apps in India not because the two countries signed an agreement but because India is an otherwise free market with access to all.

These apps promoted themselves making heavy investment in advertisements. Funds flowed from China and content building a better image of China was promoted through these apps.

These apps helped remove distrust for Chinese products from the minds of Indian youth. A parallel growth in the share of Chinese products was seen in Indian market. All this happened without any formal agreement. India cannot be accused in the WTO of violating any mutually agreed law.

2. Rules of WTO favour Indian position. According to WHO laws, a country is allowed to act against companies or products for being threat to its sovereignty and national security interest. This is exactly what the government has said while invoking the IT Act against these apps.

In fact, India can build a counter case against China in the WTO for indulging in illegal and unfair trade practice. China has long routed its goods through a third country — for example, Singapore or Hong Kong — with whom India has had preferential trade agreements.

China does this to avoid paying higher duties while dumping its products in India to be sold at lower prices than its competition. This trade malpractice has harmed the interests of Indian industries.

3. The Great Chinese Firewall. China has for long blocked companies from entering its market on various pretexts. It has blocked tech giants and even news websites.

Google, Facebook, Twitter, Instagram and similar apps which are part of everyday lives of millions of people across the globe are not known in China. By blocking these companies, China floated and helped prosper its own versions of these websites and apps.

Funded heavily by Chinese government through disguised arms, Chinese social media apps started invading foreign markets. India, being the largest market for Chinese companies, turned out to be an easily exploited profit producing machine.

With regard to India, China has imposed restrictions on long-term visa and non-tariff barriers on investments. Even some of the newspapers are blocked in China. Only yesterday, the Indian Newspaper Society (INS) urged the government look into the issue and sought an equitable response by blocking access to Chinese media in India.

Clearly, the Chinese threat to take the matter to the WTO is hollow. It has more noise than nuances.