Taking on Chinese firms calls for a strategy

Narendar Pani | Updated on August 23, 2020

Keeping out Chinese investment isn’t easy as it is spread across global firms. An infrastructure boost will spur competitiveness

Using economic sanctions against China is turning out to be a rather more complex matter than throwing Chinese televisions out of balconies. The Indian Premier League, despite being the richest sports tournament in the country, has found itself repeatedly compromising with the Chinese. It began by choosing a Chinese company, Vivo, to be the title sponsor. Vivo, probably apprehending that its logo at IPL matches would only attract negative publicity, chose to opt out. But the company that has been chosen to replace it is not free of Chinese influence either; it has Chinese minority shareholders.

In keeping with current Indian narratives, it is easy to personalise any analysis of this turn of events. The BCCI has a prominent place in its leadership for the son of the home minister. And for the rare Indian who does not place the political above everything else, there are a number of well-known cricketing personalities available, including Saurav Ganguly, who have as many critics as they have fans. But such a reading would completely miss the lessons the IPL narrative has to offer.

Quite apart from its financial success, the IPL is a pioneer in several other ways. It did more than any other sporting event to build the identity of Indian cities. In putting the city ahead of the state it was lifting an identity that was suppressed in other domains. In the political domain, the governance of India’s major cities is dominated by the chief ministers of the States they are located in, rather than the mayors of individual cities.

City identity

The strength of the city identity stands out in several aspects of the way the IPL has panned out. National stars have developed strong city identities, without having been associated with that city before the IPL came in. The iconic status MS Dhoni enjoys as the captain of Chennai Super Kings is as intriguing as it is heart-warming. The city identity is so overwhelming that it does not even require any of the teams to play in their home cities. The entire tournament has been taken abroad before and will be held in the UAE this year.

The city identity represents an understated, but critical, part of the success of IPL. The success of the tournament has been built on the loyalty of its fans. It is their presence at the stadiums and in front of television screens that has provided the financial muscle of the tournament and riches for the players.

And this fan loyalty has been boosted by their identification with a city. It is this identity that gets them to cheer previously unknown players playing for their team. This in turn brings out the best in these players. It is no accident that the most successful teams in the IPL, Chennai and Mumbai, have invested in building strong city identities.

Chinese companies have recognised the three dimensions of the IPL: the sporting, the imagination, and the financial. Not being a cricket- playing nation their sporting interest did not extend beyond using sports stars for their advertising. The city imagination by its very nature is not available to foreigners. But they have been keen to tap other means of influencing the Indian imagination. The new title sponsor of IPL, Dream 11, is playing a major role in taking cricket from the field to the realm of sports fantasy.

And the Chinese partner in Dream 11, Tencent, is the world’s largest video game company. The Chinese could have a quiet influence on the way the next generation of Indians think about their most followed sport. The financial dimension is the most transparently tapped. The stake of Chinese companies in those sponsoring IPL gives them a share in the returns from the tournament.

The experience of the IPL points to the limits of state sanctions on individual countries in an interconnected world. If the government were to prevent Indian companies from having Chinese investments, they would become less competitive in the bidding process. And if they were to look to other countries for investments, there is no guarantee that these foreign investors would themselves not have Chinese investment in them. Ignoring the pain of these restrictions would go against the fundamental condition needed for a sanction to succeed: it must hurt India and Indians less than it hurts the Chinese.

A more meaningful strategy would be to make Indian companies more effective in competing against their Chinese counterparts. It would proactively spend a part of what the government expects to lose through sanctions, on infrastructure that would help Indian industry compete more effectively. This investment could prioritise products in which China has a significant share of the Indian market. Calling upon Indians to sacrifice for national interest is undoubtedly a noble goal, but there is no reason for that sacrifice to be in vain.

The writer is a professor at the School of Social Science, National Institute of Advanced Studies, Bengaluru

Published on August 23, 2020

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