India’s move may aggravate its economic downturn. Just like the People’s Liberation Army in the border standoff, China has a clear advantage in bilateral trade in terms of economic and trade relations between China and India.
The total trade volume between China and India has maintained an upward trend since 2008. As of 2018, the value of trade between China and India has reached about 70 billion yuan. For Chinese companies, investment in the ICT and energy sectors in India is the main industry aspect of investment in India.
Chinese capital contributes to the development of India’s manufacturing industry
Looking at the overall situation, India’s trade deficit with China is relatively serious. In order to change this serious deficit situation, the Indian government actively encourages Chinese companies to increase related investments in India.
China has carried out automobile manufacturing, infrastructure construction, heavy industrial equipment, power, renewable energy and textile businesses in Gujarat ; while in Maharashtra , China’s Sany Heavy Industry Group has invested nearly 100 million US dollars. China's Huawei has established a new electronic information research and development center in Bangalore. In fact, Chinese companies have signed a US$6.8 billion project with India for the establishment of comprehensive industrial parks in Gujarat and Maharashtra.
Chinese capital and technology contribute to the development of India’s information industry
It can be found that, for India, investment from China can help India rapidly improve its manufacturing technology level, enabling India to give full play to its advantages as a populous country to complete its own macroeconomic development. Transformation.
The Indian government currently needs a lot of foreign capital and manufacturing technology to help India achieve a leap in manufacturing and infrastructure construction. This makes the macro environment for China's investment in India before 2018 relatively good. The "seven-member group" established this time broke this continuous good environment.
India’s manufacturing industry may first face the impact
India’s previous policy is to impose appropriate restrictions on foreign investment through indirect measures and certain administrative means. However, after the establishment of the "Seven-member Group", China's investment in India may face two problems:
First, the Indian government’s investment absorption process is accompanied by a large number of corruption incidents. An “anti-corruption storm” is set off against the sectors that attract investment in India, which will interrupt the original pace of project advancement; secondly, the Indian government may use “national security” as an excuse to target investment from China. Limit .
Chinese capital is of great significance to India's high-tech industry
This move by India will undoubtedly add uncertainties to its own macroeconomic development.
For China, although the total investment in India already has a considerable scale, it accounts for a relatively low proportion of China’s total foreign investment. For Chinese companies, the overseas market is still very broad and can be increased Other countries have invested in ways to make up for the obstacles encountered in India.
Further to India itself, technology and funds from China are indispensable for its economic development. Funds from China are mainly concentrated in the communications and energy technology industries, which have high added value; for For the Modi government, it is not advisable to blindly intensify the conflicts between China and India at multiple levels. If Chinese investment and technology stop entering the Indian market, the gains for India will be far less than the losses.
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