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Chinese firms see India as great investment avenue

Written by: Staff
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Beijing, Sep 9: Acknowledging the entente cordiale in the India-China relations, Chinese firms consider India a tremendous destination for investment and growth.

They accredit it to India's steady rating among the top 15 investment destinations vis-a-vis FDI attractiveness, vindicating India's stand as an emerging economic power.

There has been a paradigm shift in the Chinese perception.

Chinese increasingly appear well acquainted with Indian peculiarities.

''The Chinese have tremendous interest in India, particularly Indian culture. They have special interest in 'Yoga', Indian movies and dance and are attending classes in large numbers in Beijing and elsewhere in China. The Chinese view India as a great friend and neighbour witnessing rapid progress in different fields particularly the IT sector,'' Xinhua news agency Deputy Chief Editor Liu Jiang told a visiting UNI correspondent.

He feels that collaborative trade efforts can create synergies helping them regain their rightful place in the global scene.

''My agency is playing a significant role in keeping the Chinese abreast of the latest vital developments on the Sino-Indian front,'' Mr Jiang adds.

However, most teenagers admit of not possessing sufficient inputs about India but express keenness to visit India when pockets are deeper.

''Despite its colonial past, India has contributed impressively to the rest of the world ranging from 'Yoga' to the Internet,'' says Chinese official Yu Xiang. Paradoxically, most of the Chinese are perhaps unaware and unconcerned about global politics until vital stakes are involved. Chinese businessmen support a move for Indo-China free trade but vacillate on a suggestion for a South-Asian common currency and open borders among South-Asian nations on the EU pattern as a possible idea to promote cooperation and trade.

However, for some ''it is a divided house'' with simmering regional rivalries, referring to the ebbs of Indo-Pak relations.

Some Chinese business leaders attribute India's impressive growth to robust economic growth coupled with rising GDP, a relatively stable political environment, sound legal structure and an active media. Indian democratic institutions are perceived as superior to those in other emerging markets.

Realising that India's demand for goods and services is set to grow by ten per cent per annum, Chinese exporters however feel their exports might not be commensurate to this sectoral growth.

FDI confidence in India has more or less been in consonance with other emerging markets, as reflected in the high Sensex.

Negative perceptions owe to the license Raj, red tapism, inadequate infrastructure and corruption.

The exporters were sckeptical also of institutional and cultural factors affecting India operations. India's labour rates, natural resources and government incentives are relatively less important for Chinese firms. They feel that spiralling fundamentalism and terrorist violence, strikes and 'bandhs' will adversely impact investment and export decisions. The firms have accentuated the gnawing insufficiencies of infrastructure and the challenges they face in making investments in India. Indian trade policies and customs procedures are also major impediments to their business operations.

They feel the potential for Indo-China trade and investment has not been realised. ''The Indian share of China's total trade and investment has been low, thus accentuating the need for growth,'' says Wang Qihui Director Chinese Commerce Ministry's Department of Asian Affairs.

The impact of Sino-Pak links and the Indo-US nuke deal are listed among other key reasons for disproportionately low quantum trade.

Other factors affecting business are frequent changes in policies, insufficient knowledge of opportunities in India, unwillingness to accept risks involved in trading with and investing in emerging markets, restrictive trade practices and investment policies, says Mr Paul He of Rosenberger Asia-Pacific Electronic Co Ltd.

Some top Chinese entrepreneurs are enlightened enough about the potentialities and inputs about Indian markets. A range of indicators available from reputed sources come handy in assessing and contrasting Indian markets with others, says Mr He.

The executives highlight that India and China are hot topics in the West. ''Americans view China and India as welcome trading partners and future allies,'' says Mr Patrick Weathers of the US. About the possible Indo-China power bloc in Asia, Prof Russell Leigh Moses feels, ''If it becomes a bloc, it won't resemble a Cold War-era bloc. It will be less about monoliths and more about mobility''.

Dr Moses a authority on Asian affairs reflects ''an important thing to note is that India has never been seen as a contending military power, whereas China is viewed as gaining strength vis-a-vis economy and political muscle. There is a perception in the west that India is not only friendly but also poorer than China.

''Even when the Soviets were pouring millions into Indian military modernisation, there wasn't a real fear that India would be a military competitor.'' The Chinese stunned by the massive strides that India has made particularly in IT. Increased people-to-people contacts would also be benificient for trade relations between the Asian giants.

UNI

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