Bilateral Trade of Lithium Batteries in China and India - Case Study Example

Bilateral Trade of Lithium Batteries in China and India Abstract: Normally there is what we know healthy and conducive bilateral relationship between nations which is evident hence affecting the economic status either, directly or indirectly, of the nations involved in the bilateral trade. It is significant to ensure that companies or government representing the nations involved in the bilateral trades ensure they have a neutral and non-favoring approach whilst trading thus giving its citizens a significant involvement in the trades between nations and continents hence the grassroots level is represented thus favoring the economic growth of countries involved. It essential to note that the so-called third world countries are slowly getting involved in the trade, therefore, ensuring the sustenance of the growth of the financial situation and the economy in general. There is the need to note that the bilateral trade of the countries involved can be neighbors or rather of the same economic zones, or between countries who are far apart and who are willing trade with each other. In essence, the bilateral trade has broken economic status and ranks whereby the countries involved can be between developed and developing countries. The ease of doing bilateral trades has improved over the years hence making innovative breakthrough significantly improving the economy of the countries involved or economic blocs. In most cases, there are common countries in the developed countries that have set a clear part in the growth of bilateral trade thus making the ease of doing business in these countries by improving the stringent rules and laws set aside in governing the trade. A good example is a bilateral trade between China and India which has been in existence for many years thus becoming seamless due to the benefits are seen as a result of the trade. It is important to note that even if the mentioned countries have different cultures, political stands, and backgrounds, they have broken such barriers therefore mutually benefiting from the bilateral trade. It for this reason that India and China have experienced the growth in the economy in general. Case Study: China and India trade has been going for a long time hence each country knows the benefit that has come as a result of the bilateral. According to critics and researchers, China goods are seen to be low in quality and also some of them being cheap compared to other similar goods.India, on the other hand, has improved in its growth in the pacts done with China hence is considered to be of a high trade deficit with their partners China has improved and increased alarmingly in shares according to India's import hence improving the economy immensely. There are several theories in the bilateral trade between India and China that has proved to be advantageous in both countries in regard to the bilateral trade. According to research done in regard to the trade with India and several other countries, China has about 35% of its products are considered to have discount while the rest are regarded to be of the usual prices. In this case the lithium battery id different from the lead-acid batteries which are included in the products listed in the bilateral trade between China and India. China has been in the lead to the exportation of the lithium batteries sent to India who are one of the major importers of the lithium batteries. It for this reason that India in itself have responded swiftly, in order to boost the trade with China,by reacting to the tariffs to the extent of establishing Energy Storage Association in order to include the Chinese lithium battery into the tariffs which will not make an impact, if not a negligible, to the growth of the market of energy store. According to the researches done, the future of the US-based energy storage association is uncertain in the global market it handles. It because of the uncertainty that the US puts the effort in sealing and strengthening its energy sector in order to cater the tariff adoption that China creates in improving the trades of lithium batteries with India plus other countries. There are many associations in regard to the handling of the lithium batteries that will consider the tariff made by China in its trade with India in the attempt of improving the storage deployment of energy. Such an organization includes the Battery Council International who give policies that are required to safeguard the tariffs in handling the building the services of the battery storage in the quest of improving the battery quality. In essence, the battery Council has the right to undertake the review of the tariffs experienced by the China and India ties in the trade of the lithium batteries and overseeing its impact in the energy industry. China also has for many years tried to undertake what we call the predatory way of handling its prices of commodities it produces in order to have a breakthrough in the market. It is for this reason that China has mainly dominated in the market with other countries especially the US hence immediately making an impact due to the varying price markets. It however necessary to note that China produces also commodities with low quality as compared to other goods from other countries but this does not deter the Chinese market form producing quality products especially top-tier electronic products such as the lithium batteries.In essence, the low-quality products are categorized with regard to the market in this scenario India who are the largest consumer of the lithium batteries. India, in this case, should categories the buyers in this bilateral trade of lithium batteries. It is not because that there not quality assessment experts of lithium batteries,but the need to uplift the trade in return making a positive impact in the trade and economy in the long run. The technology enterprise in China is practically evolving every time thus one should keep in mind of a newer version release of the lithium batteries which are constantly being manufactured with newer features being portrayed putting into consideration of the lithium battery. In the recent years, China has improved in the production of the lithium cells plus export hence has shown a significant rise in the prices for the commodity in India thus boosting the energy sector( Vesborg & Jaramillo,2012). It for this reason that lithium batteries rose to more than 70% thus cashing in big for the Chinese economy from the cell sales. Moreover, China advanced in improving the unit price, therefore, assuring market penetration and also indicating the increase in exports. The demand of the lithium batteries in India is increasing by the day hence, therefore, the need for China to constantly produce more thus creating an economy niche thus improving the energy sector. It essential to note that lithium batteries has improved the ICT sector through assembly and manufacturing of the Print circuit board and also computers plus smartphone production, therefore, sustain the economy in India hence the boosting the quality of the end product and also the unit prices have also risen due to the pact between China and India(Olivetti,2017). Trade Scenario: Putting into consideration the imports India receives, most of the products are from China as compared to other nations they do a pact with. According to researches done, the US make 21%, Korea forms 21.4% whilst Japan makes 25.8%. of the imports to India. The imports from China are considered to be the value-added type of products in that the end product goods are used by industries for example such as the lithium products. The main categories of India's imports are chemicals, electronics, pharmaceutical, and engineering hence in this case lithium batteries is more of an electronic type of import. ( Suo et al.,2003)According to researches done, India's import from China are mostly electronics and pharmaceuticals. It also essential to put into consideration that the power sector mainly depends on China imports hence in this case lithium batteries due to its ability to save energy (Lindley,2010). There is minimal importation of raw goods from China by India (Korinek & Kim, 2011). China also accounts for more than 90%of the imports of India on a daily span if we consider utensils, clothes, toys, and many more household products which are considered to be of less labor intensive and quite low in the technology.Looking in the earlier years, almost ten years ago, China used to produce less than 10%. The trade between China and India issued a trade surplus in the early years of 2000. The issue started because when India exported goods worth billions of dollars to China. The import from China grew proportionally hence the trade surplus entered into a deficit of fifty billion Us dollars for India's trade. It for this case the problem caused by the bilateral trade was that India has a low export of almost 4.3% which is considered to be significantly low. In order to avoid and safeguard the bilateral trade between China and India, there a determinant factor that does the evaluation and assessment of the trade. One criterion for checking the bilateral trade of China versus India is using by the bilateral import and export ration. For instance, China is considered to have a high hence given the criteria that India’s ration is 5.8 representing export and importation respectively. This ratio is commonly known as import-export ration. According to statistics, the IER of the US is at 4.2. The American government has become moreover obsessed with the Chinese way of trading hence picking a leaf from the way they trade with other nations in bilateral trade hence having a long-term effect. Basically, India and China show a good example on how to do a trade involving the electronics such lithium batteries which have there for decades now, therefore, has sustained the economy for both countries. Conclusion: It is evident that the two countries involving lithium trade have benefited from the technological electronic bilateral trade thus creating venture and a sustainable economic activity. Lithium battery in itself is a good energy saver for most of the electronics it formulates ( Lambert, Gilman & Lilienthal, 2005). There is a need to improve the trade involving the lithium trade of China to India considering the fact that the technological niche is constantly developing due to innovation thus the need to improve and sustain this common practice. In this case, there are rules and laws governing this trade is essential in improving and safeguarding the lithium battery trade. The more the lithium battery trades, the less interference from the governing bodies set to ensure seamless trading and also the quality in that it impacts the citizens’ lives directly or indirectly. It is also important to understand that India and China are open to business with other countries thus making the expansion of trade a reality. In recent years, India's lithium reserve has increased due to the high demand for laptop and electric auto motives (Brown et al., 2010). It for this reason that investor has put their trust in the exploration of Lithium reserves in India therefore, in essence, boosting the trade between India and China, who are considered the largest manufacturers of electronics, therefore maximizing in the trade lithium batteries in which India also consumes from it. Putting into consideration that environment has been put as a priority while manufacturing the lithium batteries, the venture has proved to be successful( Lema & Lema, 2012). There are several Preferential Trade Agreement that has been made between China and India which has allowed the tariffs of lithium batteries are low so as to seamless trading thus sealing the pact for mutual benefits between the two nations. References Brown, S., Pyke, D., & Steenhof, P. (2010). Electric vehicles: The role and importance of standards in an emerging market. Energy Policy, 38(7), 3797-3806. Korinek, J., & Kim, J. (2011). Export restrictions on strategic raw materials and their impact on trade and global supply. J. World Trade, 45, 255. Lambert, T., Gilman, P., & Lilienthal, P. (2005). Micropower system modeling with HOMER. Integration of alternative sources of energy, 379-418. Lema, R., & Lema, A. (2012). Technology transfer? The rise of China and India in green technology sectors. Innovation and Development, 2(1), 23-44. Lindley, D. (2010). Smart grids: The energy storage problem. Nature News, 463(7277), 18-20. Olivetti, E. A., Ceder, G., Gaustad, G. G., & Fu, X. (2017). Lithium-ion battery supply chain considerations: analysis of potential bottlenecks in critical metals. Joule, 1(2), 229-243. Suo, L., Hu, Y. S., Li, H., Armand, M., & Chen, L. (2013). A new class of solvent-in-salt electrolyte for high-energy rechargeable metallic lithium batteries. Nature Communications, 4, 1481. Vesborg, P. C., & Jaramillo, T. F. (2012). Addressing the terawatt challenge: scalability in the supply of chemical elements for renewable energy. RSC Advances, 2(21), 7933-7947. Read More