After cheating and robbing China for so many years, and openly treating China as an enemy like the Americans, India is planning to repeat the whole process once again. China's investment has fallen quite badly that it is now the 22nd ranked foreign investors in India. In fact, China's FDI in India is down to a trickle with India's unfriendly policies against China. Not only that the Indians were fabricating frivolous charges on tax evasion by Chinese companies and fining them in the hundreds of millions of US$, India also placed a lot of obstacles on Chinese technical staff applying for visas to work in India, refusing to approve Chinese projects in India. India was as good as erecting a high wall to block off China and at the same time robbing from the Chinese companies and forcing them to sell to Indian companies for a song.
On the other hand, China is India's number one exporter and having a trade surplus of more than a hundred billion US$ last year. China's trade surplus is derived from direct export to India instead of Make In India by Chinese companies. India is now feeling the pinch as no Chinese companies is going to be stupid enough to want to put money in India any more. Thousands of Chinese companies have closed down operations in India. Even Foxconn has made a rapid retreat from India after finding how treacherous it is to operate in India, other than the poor quality of factory workers.
India is now having second thought of wanting to invite Chinese companies to return to India, to sink their money in India so that India can have another round of cheating and robbing them when the time is ripe.
Would the Chinese be stupid enough to be duped again and stupidly pour in good money into India? The present formula of selling to India from China is about the best arrangement. No risk of being cheated, be charged by dubious crimes and losing all their investments in India, and even losing their pants. And not to mention being seen by the world as a stupid people that can never learn from their past mistakes and willingly offered their hands to be bitten by the snake, again and again.
How many stupid Chinese would be throwing their hard earned money into India again? One thing is very sure, what is put in India belongs to India. Never hope to take them back. Stop the pretense, money in India's pocket is as good as money down the drain.
India cannot expect companies from every corner of the world to close their eyes and be ripped off blindly. Not even Chinese companies that were late comers to India and not realizing the Indian 'rope trick' around investor's neck. At least it is only a rope and not an 'iron chain' that the USA is placing around the necks of cronies and doggies that cannot be broken. Foreign conglomerates doing business in the past already were silent victims, departing India sheepishly in shame.
ReplyDeleteHow is India going to scheme to rip off China when no Chinese companies henceforth want to set foot in India, just like Chinese investors now avoiding the USA and EU. Chinese companies can set up factories in Bangladesh, Vietnam, Thailand, Malaysia, Indonesia, Cambodia and even Laos. India can refuse to buy from China and buy from the West, like the EU buying oil from the USA. But India needs Chinese raw materials for its pharmaceutical industry, Chinese supply chains for its smartphone and computer manufacturing needs that the USA and the West cannot provide. China is the only viable source for its tech and pharmaceutical industry.
India will be just like the EU, suffering withdrawal symptoms without Russian cheap energy to power its industries. This is the reality and cannot be avoided. India can try to behave like the EU and try to cut itself away from China. But at what cost and what effect this will have on the Indian economy? Remember that India needs to generate plenty of jobs to cater to millions of Indian graduates joining its workforce. Are these graduates going to become farmers and 'mama store' vendors selling sweets?
India must think beyond its nose, not just trying to please the USA by trying to waste its resources to counter China. The eventual beneficiary will be the USA, not India. India will be the fall guy, the one suffering all the collateral damage in the end.
The Chinese wud say: "If Temasek and GIC can, we also can!"
ReplyDeleteIt is unlikely that after the attitude of India towards Chinese companies, Chinese investments would still want to go to India as most people seem to think, except probably Red Dot that has a particular fondness for India.
ReplyDeleteI believe companies like Xiaomi, which first invested in India in July 2014, about ten years ago, was at all aware of the difficult situation it would face recently doing business in India, by having issues regarding tax matters, probably under laws legislated retroactively to punish it.
Investors need to have bad experiences and precedents to become aware of the risks involved in investing in India. Now that they know, Chinese investors are not that foolish to continue pouring money into India and taking such risks. Those that were already there, making the most of a bad situation is the only alternative. They can divest in time when opportunities arise.
India is facing strong headwinds with job creation and an exploding population. The Indian economy cannot move forward any faster with these two elements countering each other.
ReplyDeleteAny wrong bet by any country in India is going to be very costly. But as long as it is other people's money, what is the problem?
When cheated the first time, you are just being too honest and trusting.
ReplyDeleteWhen cheated the second time, you are being stupid.
When cheated the third time, you are stupid beyond hope.