Will the war stop or the world?

With more people using smartphones increasing access to the Internet, restaurants can fully utilize their maximum potential to reap higher profits.

6. Delivery-dedicated Websites

Websites like Swiggy earn commissions on every order, and the benefit to customers is that they can access food websites offerings at just one stop avail discounts and exclusive offers to get maximum value out of their online or mobile app orders.

MARKET FORM: OLIGOPOLY

It is that form of market structure in which a few firms are selling a product so that there is intense competition between them. This market is dominated mainly by two companies, “Swiggy “ and “Zomato ."Other companies include "Fasoos," "Box8," and many more.

Reasons

1. Intense Competition: Firms compete with each other through various sales promotion measures like discounts and advertisement campaigns. Selling cost holds a lot of importance. Television commercials war between ‘Swiggy’ and ‘Zomato’ bears testimony

to this fact.

2. Interdependence: Any action on the part of a firm impacts the other firms too. They react to the change by changing their price, output, product, etc. Therefore, while taking any decision, its impact on the competing firms has to be considered.

3. Nature of the product: In this case, it is a pure oligopoly in which all the companies deliver food to the consumers. They work as facilitators of ordering and delivery of food between the restaurants and the customers.

4. Importance of selling cost: Selling cost is the expenditure incurred by a firm to promote the sale of its product through various sales promotion activities. Examples are television commercials,

advertisements in newspapers, and many more. They do it to lure away customers from other brands and persuade them to buy this brand.

Swiggy launched advertisement campaigns like " Ghar ka khana aur Saath main Thoda sa Swiggy" "Swiggy Match Day Mania."

5. Barrier to entry: There exist practical barriers to the access of new firms to the industry. In the absence of these barriers, the market will not retain the characteristics of a few sellers in the long

run.

Food delivery mobile apps face some severe issues about logistics: choosing a coverage area, estimating the number of vehicles required, keeping food fresh when delivering to far-off destinations.

Today, Swiggy and Zomato are the two leading food delivery apps with the most market power and share.

ZOMATO

Unique Selling Proposition:

1) Entrancing classification of restaurants 2) Dine out booking and customer reviews 3) Exclusive offers for Zomato gold members 4) Zomato originals

SWIGGY

Unique Selling Propositions

1) No minimum order 2) Faster delivery times 3) Exceptional discounts 4) Exclusive offers for Swiggy Pop members.

ARRANGEMENTS DURING COVID 19 (SWIGGY AND ZOMATO)

1) Delivering groceries and other essentials at doorsteps. 2) Swiggy Genie service enabled the customers to pick up and drop to send or receive packages from anywhere across the city. 3) Categorising restaurants based on hygiene and precautions maintained. 4) No contact Delivery 5) Spreading awareness regarding precautions to be taken. 6) Taking all measures to ensure safe food, e.g., regular temperature check.

CONCLUSION

A food delivery market is a form of oligopoly dominated mainly by two firms, 'Swiggy’ and

‘Zomato". They compete with each other through commercial television wars and heavy

discounting. It is one of the fastest-growing markets in India with the advent of technology, increase in connectivity, internet coverage, and urbanization in India. Its demand drivers are encouraging demographics, promising income and consumption levels, favorable lifestyle changes, and a rising number of working women. Its supply drivers are expanding a variety of cuisines, upgrading retail formats, the rise of contract cultivation and the emergence of logistic providers, growing delivery dedicated forms, and extension to delivery services in existing restaurants. The structure of home delivery or the takeaways has gained a lot more customers in locations such as malls, offices, and big-party orders for residential complexes. It is estimated to touch $12.53 billion by 2023 due to a high growth rate.

At a Digital Crossroads: How FinTech is Bridging India’s Microfinancing Market Gap By: Reich Tiamson (Ateneo de Manila University)

Industry Background: Rapidly Accelerating Economy driven by the MSME Sector

India is one of the fastest-growing economies in the world, with a GDP of ₹305 trillion and a

CAGR of 9.2% expected until 2025. This economic boom is driven primarily by a rapidly expanding service and MSME sector, with a high demand for various business-oriented outsourcing services.

Figures 1 & 2: India’s rapid GDP growth is primarily driven by the MSME sector growth.

Breaking this down further by business type, MSMEs make up 30% of total GDP, employing 20% of all workers across all industries.

Industry Issue: Critical Financing Gaps in the MSME Space

Figures 3 & 4: India MSME Contribution to the Economy is limited by Large Addressable Credit Gaps.

Despite servicing this large proportion of the population in terms of GDP and employment across all sectors, MSMEs are held back by limited access to finance, with the loan portfolio of MSMEs from conventional finance institutions amounting to only 24% of the total.

The International Finance Corporation estimates that the total financing gap for MSMEs in India could be worth nearly 25.8 trillion INR.

Figure 5: Lack of Access to MSME Lending and Microfinancing is a Major Pain Point.

It is clear that MSME lending is a critical and underserved need, and a potential major and profitable gap in the market, indicating an evident market opportunity in MSME lending and microfinancing.

Industry Insight: “It’s not the loans, it’s the banks.”

The common belief is that small-to-medium lending is not something that is big in the country. This is incorrect, as the Indian MSME consumer is not, in fact, loan-averse. Rather, in raising capital, MSMEs are often forced to resort to alternative sources of financing their ventures due to structural issues with existing formal financial institutions.

Figures 6 & 7: MSME Credit is largely driven by Informal Borrowing & Credit.

Taking a look at the lending space in India, informal loans are prevalent and primarily facilitated either by informal moneylenders or borrowing from interpersonal relations such as close friends or family members. Culturally, because 92.4% of workers earn from the informal economy (IMF, 2019) these informal loans are often an essential element of how these consumers raise capital and transact.

Figure 8: India MSMEs have Multiple Apprehensions about Traditional Banking Loans.

This indicates that the lending gap is not about the fear of borrowing, but rather the fear of borrowing from a bank. Indians have distrusted traditional banking institutions due to their rigorous and lengthy application processes, excessive documentation requirements, high-interest rates, and inflexible loan terms.

This lack of easy access to formal financial services drives them into the arms of informal loan scalpers due to their convenience and flexibility despite their predatory interest rates. This credit gap presents a great market opportunity, as this is a market that has not been fully exploited.

Industry Landscape and Demographic Segmentation: Increasing MSME Digital Adoption & Fluency

Figures 9 & 10: India MSMEs are increasingly adopting Digital Technology.

The local market is still wide open to addressing this specific need. Changes in consumer trends and behavior have led to a sharp uptick in digital platform adoption in the Indian market.

Segmenting the market in terms of size and relative income share, there are two distinct trends. Micro and small enterprises comprise the bulk of the market in terms of people, but medium enterprises dominate in terms of capital and revenue, with micro and small enterprises generally comprising the younger, more digitally savvy demographic, and medium enterprises primarily run by older demographics.

Given this market landscape, it is important that financial technology solutions address both segments, presenting medium-sized enterprises the opportunity to digitize and expand their businesses, and giving micro and small enterprises the capacity to get off the ground, scale up, and connect with their consumers. This is a multi-trillion INR market gap that financial technology startups are tailored to fit to serve.

Industry Penetration Strategy: Facilitating the Digital Transition

The biggest difficulty for these startups is convincing consumers that they are a better and more trustworthy option than the banks which they hate and informal loaners which they despise.

Figure 11: Suggested Industry Penetration Strategy through a Digital Platform Lifecycle Model.

To tap into this market effectively, financial technology solutions need to ensure that this massive unbanked sector sees them as their friend by addressing these pain points through increased flexibility and accessibility of offerings at reasonable rates and emphasizing this to them with targeted marketing.

This entails the creation of an acquisition funnel that is focused on targeted marketing, digital consumer education, and building trust with the key stakeholder in this relationship, the MSME

consumer.

This can be done through an omnichannel consumer touchpoint strategy, similar to how other digital startups such as Grab and Nykaa have transitioned consumers in emerging markets onto their platforms

Figure 12: Creation of an end-to-end Indian MSME digital ecosystem

This strategy allows more digitally savvy customers to transition directly from consumer touchpoints such as digital advertising onto the digital service platforms, while less digitally savvy customers are directed to physical kiosks or stalls with personnel who can help them build their trust in the product and transition them into the digital ecosystem.

Industry Sizing: A Growing & Profitable Market Opportunity

Figures 13 & 14: India MSME Financing Market Players and Current Credit Gap.

Current FinTech solution providers are the largest non-major banking entities in the MSME lending market, with a commanding 29% market share of the new-to-credit borrower space (Approx. 4.5 trillion INR).

However, despite this, there are still roughly 1.8 billion mobile connections in India, and 63 million MSMEs, with an estimated year-on-year growth rate of 18.5% and an existing credit gap of 25.8 trillion INR in the MSME sector.

The Indian government expects MSMEs to be worth $2 trillion by 2025, and is relying on MSMEs to provide 40% of total GDP, 60% of exports and generate 50 million new jobs by that time.

In order for that to happen, these enterprises need to be given the financial resources to properly scale and thrive. The market is still wide open for further financial technology solution providers to enter the space.

Conclusion: Taking the Long View

India is at a crossroads of digital development.

The Asian region is entering a period of rapid economic growth with India as one of the fastest growing economies in the region. Both national governments and private enterprises continue to deregulate their digital and financial policies, and open their markets, pushing and incentivizing the transition to a digital economy. The internet, smartphone, digital wallets, e-commerce coverage and penetration are continuing to explode.

As MSMEs rise to meet the needs of this increasingly digital and asian-centric economic world, the market demand for flexible omni-channel financial institutions and consumer-facing technology solutions will be greater than ever.

This is a gap which financial technology solution providers are primed and ready to fill, as the end-to-end digital partner of these MSMEs, ready to facilitate their entry into the formal economy and the digital ecosystem.

References:

Boston Consulting Group (Figures 6, 8, 9, 10, 11, 12, 13)

https://media-publications.bcg.com/Credit-Disrupted-Digital-MSME-Lending-in-India.PDF

Financial Express (Figure 3)

https://www.financialexpress.com/industry/sme/msme-eodb-increasing-msmes-share-in-gdp-to40-by-2025-is-a-herculean-task-aima/2413579/#:~:text=address%20on%20Friday.,Former%20MSME%20Minister%20Nitin%20Gadkari%20in%202020%20had%20set%20a,onli ne%20event%20in%20October%202020.

G20 Insights (Figures 1 & 2)

https://www.g20-insights.org/policy_briefs/expanding-data-collection-to-streamline-msmemicro-small-and-medium-enterprise-lending/

India Brand Equity Foundation (Figures 4 & 14)

https://www.ibef.org/industry/msme.aspx

https://www.ibef.org/industry/msme.aspx#:~:text=India%20has%20approximately%206.3%20cr ore,Udyog%20Aadhaar%20Memorandum%20(UAM).

International Finance Corporation (Figure 5)

https://www.ifc.org/wps/wcm/connect/dcf9d09d-68ad-4e54-b9b7614c143735fb/Financing+India%E2%80%99s+MSMEs++Estimation+of+Debt+Requirement+of+MSMEs+in+India.pdf?MOD=AJPERES&CVID=my3 Cmzl

International Monetary Fund

https://www.imf.org/-/media/Files/Conferences/2019/7th-statistics-forum/session-iimurthy.ashx#:~:text=There%20are%2092.4%25%20informal%20workers,indicating%20the%20 level%20of%20outsourcing.

KR Activism (Figure 7)

https://www.kractivist.org/why-small-farmers-in-tamil-nadu-borrow-money-at-60-interest/

The Economic Times

https://economictimes.indiatimes.com/small-biz/sme-sector/ambition-on-hold-indias-pursuit-of5-trillion-economy-by-2025-will-need-recalibration/articleshow/76992764.cms?from=mdr

https://economictimes.indiatimes.com/news/india/indias-growing-data-usage-smartphoneadoption-to-boost-digital-india-initiatives-top-bureaucrat/articleshow/87275402.cms

The Indian Fin Tech-An Emerging Sector

By: Bhavik Malhotra (IIM Lucknow)

FinTech is a blend of the terms “finance” and “technology” and refers to any business that uses

technology to enhance or automate financial services and processes.

Owning to the continuous GDP growth and popularization of mobile Internet, the fintech market in India is growing at an unprecedented rate, making India one of the fastest-growing fintech markets and a hub for fintech start-ups, ahead of the US Between 2014 and the first half of 2020, India’s fintech start-ups raised more than USD 10 billion in total, involving 692 transactions. the country is ranked the 3rd largest in Unicorns only behind USA and China both in terms of number and value.

Digital payments have already scaled up with over 200mn active users. FinTechs firms are now transcending other financial segments including lending, insurance, and wealth management, many in partnerships with incumbent players.

The start of a new Digitalisation era

It all started with “The JAM Trinity” i.e., Jan Dhan, Aadhar, and Mobile. This has helped to move

things in the digital age, making payments and financial transactions go cashless, enabling ease of use and transparency.

Key segments In Fintech:

a) WealthTech

WealthTech comes in response to the convergence between digitalization, the next-gen advances such as AI/ML, big data, and the investment and wealth management sector.

Some of the start-ups that saw traction in the recent past and continue to be investor’s preferences

are Zerodha, Upstox, and Groww.

Due to regulatory changes brought in by SEBI, e-commerce companies such as Paytm and PhonePe are now offering mutual funds and investment options through their apps like Paytm Money and

PhonePe Wealth services. UPI will act as a key enabler for WealthTech start-ups, it will help them increase their digital footprints by digitalizing their offerings.

The WealthTech start-ups can be subclassified into personal finance management, robo-advisors, investment platform, etc. Some other examples include Bank Bazaar, INDwealth, etc.

b) Insurtech

The InsurTech landscape in India is quite nascent at this stage. The penetration is quite low around 2.76% in life insurance and 0.93% in non-life insurance compared to the combined global average of 6.5%. ‘Lack of customers’ trust remains the key challenge facing the InsurTech segment.

However, the share of web aggregators within digital insurance has been increasing and now originates ~30-40% of digital insurance.

The current InsurTech space in India is being dominated by a few new-age insurers like Policy Bazaar, Acko, Digit, and Toffee insurance with their ability to attract and garner popularity among the millennial population. These start-ups are starting to pose a threat to the traditional incumbents by being able to capture a significant portion of the market share in the coming years.

c) Digital Payments

Digital payments have been the flag bearer in the Indian FinTech space. We have seen a plethora of innovations in this space in recent times such as the introduction of UPI (Unified Payments Interface), e-wallets initiated by banks, and the BharatQR code. One of the main reasons for traction in digital payments can be attributed to the central government and RBI’s policies and their forward-thinking approach toward bringing the digital revolution to India.

d) Digital Lending

Retail digital lending has delivered ~43% CAGR over the past 7 years and reached more than US$160bn in size by 2020.

Some of the start-ups in the retail lending space are KrazyBee, LazyPay, Zest Money, Simpl, which provide unsecured personal loans

“Buy Now Pay Later” is expected to be the next financial revolution and will ride the digital consumption wave. FinTechs and e-commerce players have started offering small-ticket personal loans or short-term credit to monetize their user base—mostly in partnership with banks/NBFCs. This space is highly regulated by the RBI, where all the platforms registered with RBI are categorized as NBFC-P2Ps growth in the country. The country currently has over 19 P2P lenders which have.

e) Neo Banking

Neo banks are digital-only banks offering the entire gamut of banking services digitally to their customers. In India, neo banks have partnered with incumbent banks.

They provide digital account opening, integration with billing and expense management software, payroll, and automated analytics for SME customers.

Razorpay has built SME-focused neo banking platforms offering these value-added services. Similarly, Niyo and Finin are consumer-focused neo banks that provide services such as goalbased investment advice, expense tracking

References:

1. Medici India Fintech Report 2020 2. Motilal Oswal- FinTechs – Expanding the growth horizons

Urban Floods: A Manmade Disaster

By: Khushi Jain (Lady Shri Ram College for Women)

According to the Federal Emergency Management Agency (FEMA), urban flood is defined as “the inundation of property in a built environment, particularly in more densely populated areas,

caused by rain falling on increased amounts of impervious surfaces and overwhelming the capacity of drainage systems.”

Apart from being a major issue in many cities of India, urban flooding is a major disaster in many parts of the world. With the help of this article, we will be discussing this problem in detail.

Difference between Urban Flood and Rural Flood

The National Disaster Management Authority (NDMA), the apex body for Disaster Management in India differentiates urban flooding from rural flooding in the below-mentioned ways.

Development of Catchments

It is different from rural flooding as urbanization leads to developed catchments which increases the flood peaks from 1.8 to 8 times and flood volumes by up to 6 times.

Quick Speed of Flooding

It occurs more quickly because of faster flow times.

Impact on Infrastructure

It causes losses in terms of infrastructure which can have global implications.

Widespread Epidemics

The lack of free flow of water can lead to the spread of diseases including typhoid, cholera, etc.

Urban Floods: The Indian Reality

The incidence of urban floods has increased manifold in India. Most significant examples include the Mumbai Floods of 2005, Delhi Floods of 2009 and Hyderabad Floods of 2020.

The flooding generally reaches its peak during the monsoon. The storm surges in coastal cities cause flooding. Apart from global climate change, the urban heat island effect (the increased absorption and retention of heat by cities as compared to rural areas) increases rainfall over urban areas thereby making them more susceptible to flooding.

The ever increasing sea level is particularly threatening to India which has a long coastline of 7,500 km and an estimated 14% of its population living alongside it. This was further reiterated by a 2016 UN report which estimated that 40 million people in India will be at risk from sea-level rise by 2050.

Urban floods have life-threatening implications on India making it an urgent issue to be addressed. Hence, it is important to study the reasons behind it.

Reasons behind Urban Floods

NDMA defines three causes of urban floods: meteorological, hydrological and human.

Meteorological This includes:

● Heavy rainfall ● Cyclonic storms ● Thunderstorms

● Small-scale storms

● Heavy Snowfall

Hydrological This includes:

● Overbank flow channel networks

● Occurrence of high tides

Human

● Less natural surface infiltration rate

● Presence of impervious cover

This includes:

● Increased urbanisation

Unplanned urbanisation is causing urban floods because of blocking of natural drainage pathways and increased construction activities.

● Outdated drainage systems

Indian cities receive a lot of rainfall and the present drainage system is not able to handle the rainfall.

● Encroachment of lakes

Lakes can store excessive water which the rain brings but due to urbanization, humans are taking over the lakes.

● Increased construction activities

A lot of areas are covered with infrastructure. This reduces the

ground’s surface area through which the water can be absorbed.

● Poor Solid Waste Management System

Poor waste management leads to the clogging of drains because of the presence of several impurities thereby leading to the failure of the drainage system.

● Lack of awareness

Flood control measures are not widespread and without community participation, it is impossible to remove the threat of urban flood.

Effects of Urban Floods

As seen above, various factors cause urban flooding which has life-threatening repercussions which are discussed below.

Effect on Human Life

Effects on Economy

● Loss of life

● Physical injury ● Mental trauma

● Increased epidemics

● Destruction of infrastructure

● Disturbance in industrial production ● Shortage of services and risk of inflation

Effects on Transportation

Effects on Environment

● Increased traffic

● Halt in transportation services ● Disruption in internet connectivity ● Disruption in telephonic services

● Loss of habitat

● Loss of green cover ● Loss of biodiversity

Way Forward

Considering the scale of the problems caused by urban floods, it is important to have proper mitigation strategies.

Building away from flood plains

By using geospatial analysis, we can build away from flood plains thereby reducing the risk of urban floods.

Strategic Use of Land Flood-prone areas should be used for non-residential purposes. Planting of trees will also prove to be helpful along with the proper implementation of Coastal Regulation Zone Rules.

Wetlands Protection Wetlands like lakes, tanks, and ponds must be protected as they help in the management of urban flooding by reducing the

stormwater run-off.

Rainwater Harvesting Implementation of rainwater harvesting will help in fulfilling the twin purposes of lowering the peak runoff and raising the groundwater table.

National Disaster

Management (NDMA) Guidelines

The NDMA guidelines for Urban Flood Management in India released in 2010 with the motive of creating a National Hydrometeorological Network for providing early warning, using Doppler Weather Radars and maintaining an inventory of current draining systems must be implemented strictly.

Proper development of Urban Drainage System

A proper drainage system must be put into place. Efforts must be made to upscale the outdated drains.

Case Study

To better comprehend the destruction caused by urban floods, a case study on the Mumbai Floods of 2017 is performed followed by a case study on Mobile Walls of Austria to explain an urban flood management technique.

a. Mumbai Floods of 2017

Mumbai floods provide the perfect example to show the impact of urban floods on the lives of people.

Flooding occurred in Mumbai on 29th August 2017. The city recorded 300mm of rainfall during that day. The event was comparable to the 2005 floods (944mm rainfall on 26th July 2005) in Mumbai. Both the events resulted in water-logging, halting of transport, power cuts and casualties.

The cause of the flood was deemed as heavy rainfall. However, that is partially true. Factors including haphazard development projects, outdated drainage systems, blocking of drainages due to wastes, encroachments in the river bed and dumping of garbage in rivers led to this matrix event of an urban flood.

Because of these frequent urban floods, a plan to revamp the city's drains began back in 1993 but not enough has been done. There is a need to integrate all the development activities and urban governance to reduce the ill effects of floods.

b. Mobile Walls in Austria

After learning about the experience of Mumbai, we now bring our attention to the engineering of Mobile Walls of Austria that could be a possible solution for Mumbai.

In the Austrian municipality of Machland, the engineers erected removable walls capable of holding backwater. This helped in minimizing the damage which the floods were causing in Europe in 2013.

In what is essentially a vertical cantilever design, each post was placed in a large concrete and aluminium footing extending 5 meters into the soil foundation. As the immense water weight creates pressure along the wall, the force is carried through the aluminium posts into the much stronger foundation.

The ability to simply construct permanent flood walls was ruled out for Machland and a more aesthetic solution was found in removable aluminium walls.

Conclusion

Under the present globalised economy, disruption in one city can cause serious complications. Hence, ignoring flooding can prove to be disastrous.

Moreover, the current pace of urbanization is likely to continue which makes it even more important to have a response mechanism to handle extreme meteorological mishappenings, an adequate water supply, wastewater and stormwater disposal system.

There is a strong need to integrate development activities and urban governance to prevent such incidents. Ultimately, it also must be realised that:

“ Ideation without Execution is nothing but a Delusion.”

The End of the Dragon’s Golden Days

By: Hardik Agarwal (Shri Ram College of Commerce (SRCC))

China is indeed a land of mystery. Some researchers and economists try hard to define how China exactly works but every time they fail. At a time, when the world was heading towards democracy and the capitalist system, the most populous country in the world was adamant about being a socialist. And it proved all wrong by gaining double-digit GDP growth rates for years and being not only a Manufacturing Hub for the world but also the Research & Development Hub. This century, when some economists predicted that China would be the biggest economy in the coming years, China again did something that shattered all the predictions.

Chinese companies have cumulatively lost $1 trillion in Market Value last year. The credit goes to no one but the Chinese Communist Party (CCP)- the same party that once strengthened the Chinese economy and boosted the business sectors. China, for decades, was having a flourishing economy and today it is a leader in many sectors including futuristic industries. Drones, which is expected to be the next big revolution in transportation, is under the control of China with 70% of the consumer drones in the world being manufactured by a single Chinese company, DJI. Moreover, China has already been a pioneer in technologies like AI, Quantum Computing, 5G and Robotics. At a time when the world was struggling with the pandemic, China was the only country churning profits.

No doubt, it was the Chinese Business Giants that gave so much supremacy to China. Then, why is China digging its own grave by caging its MNCs? Why is the dragon setting its tail on fire? One of the best reasons explained by analysts is- The ever-increasing fear of the government not to give too much power to any individual or corporation. CCP believes that to stay in power, it must always be at the pinnacle. So, they make sure that no organisation collects data & accumulates wealth more than the government nor does any individual gather a huge fanbase capable of influencing the masses. This explains why Zhao Wei, a popular actress in China, was completely

erased by the Chinese government from the internet. Similarly, when Jack Ma criticised the government, he went missing for months and his business faced mammoth penalties besides halting Alibaba’s Ant Group IPO worth $35 billion which would have been the world’s largest

IPO. All these resulted in Alibaba losing $344 billion (to put this in perspective, the total valuation of the largest company in India, Reliance is $215 billion). In 2007, China had 4 companies on the list of Top10 companies worldwide. This number reduced to 2 in 2020 and 0 in 2021.

As China cannot directly call it a crackdown on big companies, it is defining the same with different names. To curb the EdTech industry, China accused them of triggering social inequality by providing extra coaching to those who could afford it. Limiting their power, they were asked to immediately convert into not-for-profit organisations, prohibiting them from raising funds or acquiring other educational firms. Similarly, the gaming industry was crippled when China, the Gaming Industry Capital of the World, barred companies from allowing kids to play video games for more than 3-hours-a-week and stopped approving new games from Aug’21 to be launched in

the market. Epic Games announced the withdrawal of Fortnite from the market due to an uncertain future in the country. At a time when gaming companies around the world experienced unparalleled growth due to lockdowns, China’s strict restrictions led

to the slowest quarterly growth in 2 years in Tencent- the Chinese tech and gaming giant, making it the world’s worst stock bet.

China is very data sensitive! It doesn’t want any local data to be shared with foreigners, which explains why it doesn’t allow most tech giants to

operate in their land. Those who were operating have either left or are planning to leave China due to excessive regulations in recent years. This includes LinkedIn and Yahoo who stopped operating in China in 2021. Moreover, China hates

when a Chinese company becomes too friendly with any foreign government. That’s the reason

why China fined Didi Chuxing under the veil of anti-monopoly laws and removed its app from app stores when the ride-hailing giant was listed on the New York Stock Exchange. Fearing China’s wrath, the company soon announced it would delist itself from the NYSE. While foreign tech giants can withstand the loss of a huge market, domestic Chinese companies are in a tough spot when state control becomes more prevalent. Besides harming local innovations, it will negatively impact the entrepreneurship culture in China.

Though China was, for years, practising such crackdowns, they were mostly unnoticeable. But after Covid-19, China became very aggressive which was evident in the form of unethical regulations and intense political statements. When Australia criticised China for spreading Covid19, China stopped importing coal from Australia which backfired, as they started facing a coal crisis. Tesla is known worldwide for its auto-pilot feature in cars. XPeng, a Chinese automotive company stole source codes from Tesla, to which China apparently did nothing. A few months before the incident, China banned the use of Tesla cars in the military citing privacy concerns. China was already in a Trade War with the USA in which both the countries cumulatively lost around $84 billion. After Covid-19 broke out around the world, many countries realised how important it is to have an alternative source. Manufacturers realised the need to move their production facilities out of China which, coupled with attractive schemes by foreign countries, is breaking China’s manufacturing legacy. Japan went on to the extent of giving $536 million to native companies to move out of China.

Similarly, the infamous Evergrande crisis is also a disastrous mistake of CCP, who instead of regulating the real-estate sector, provided undue aid to the company. The reason is Hui Yan, the Founder and Chairman of Evergrande, who put the company under a debt pile of more than $300 billion, is a member of CCP. China, over decades, has invested heavily in infrastructure, both inside & outside the country. But many of their projects are economically unviable and add nothing but another loan on the shoulders of China. China is also struggling with the issues of empty houses and towns, popularly termed as ghost cities by the media. Besides, disputed projects like the Belt & Road Initiative and loans to developing countries have forced China to borrow recklessly from private & foreign financial institutions.

The Quad Alliance between India, Japan, Australia & the US, and the AUKUS pact between Australia, Britain and the US, are aimed at countering China’s aggression and increasing power in

geopolitics. Countries that are in the debt trap of China are now realising the importance of selfdependence. Diplomatic boycott of Beijing Winter Olympics 2022 by Australia, America and the UK is also meant at gripping the dragon by its tail. Many countries that once had a soft corner are now despising the dragon. Despite its massive investments and innovations, China may still lose the throne to other developing countries like India if it continues to maintain its authoritarian regime and keep attacking the private sectors. In the end, it only depends on the government of China as to what extent it admits its faults and makes efforts to rectify the same.

References:

 https://thecritic.co.uk/is-china-heading-for-global-empire-or-soviet-collapse/  https://www.forbes.com/sites/williampesek/2021/07/28/china-triggers-1-trillion-marketmeltdown-and-its-just-getting-started/?sh=14259eea75e8  https://edition.cnn.com/2021/08/04/tech/china-crackdown-tech-education-mic-intlhnk/index.html

 https://www.bbc.com/news/business-58579833  https://indiainfrahub.com/2020/commentary/a-model-to-avoid-lessons-from-chineseinfrastructure-investments-for-developing-economies/

Images:

 https://www.bloombergquint.com/china/tencent-is-world-s-worst-stock-bet-after-170-billionwipeout  https://newzoo.com/insights/infographics/chinese-games-market-2016/  https://www.ft.com/content/095eb7ac-09ea-4a5c-8253-d8ca2d945614