Union Home Minister Amit Shah’s famous statement of April 2019 to “throw out the termites” has an opportunity for resonance in our present times if seen in the context of the sinister and insidious penetration of the Chinese ‘fingers’into the Indian economy, apart from their ground penetration into Pangong Tso in Ladakh. Is this penetration as destructive for India as is the invasion of termites into a building for its residents?
Brookings Institution has estimated that since 2014, an influx of Chinese capital in India amounting to $24 billion has transformed the structure of India’s trade and investment relations with China. Are these investments an Achilles’heel for Prime Minister Modi?
For purposes of brevity, let me cherry pick some of the most intriguing ones.
In October 2016, Maharashtra Chief Minister Devendra Fadnavis blessed a deal between China Railway Rolling Stock Corporation (CRRC) and MIDC to supply coaches to Nagpur Metro at the expense of Indian companies like BEML and Titagarh Wagons on the grounds of cost. Fadnavis ignored the impact of interest rate differentials in India versus China. The CRRC also invested Rs 1,500 crore in a rolling stock unit in Nagpur. In the same year,the CRRC also opened a $63.4 million plant in Bavo, Haryana, establishing the roots for eventually eating into the entire Indian Railways at some future date. This is the same way the East India Company started during the Mughal era.
The People’s Liberation Army’s wholly-owned Xinxing Group has invested $1.25 billion in a two-phased steel plant in Karnataka. The other $1 billion integrated steel plant is being set up in Dholera, Gujarat, by the Tsingshan Holding Group.
In 2019, the Shanghai-based SAIC Motor Corporation announced a $288 million investment in upgrading the old General Motors plant in Halol, Gujarat.The SAIC has also introduced its British origin MG Motors brand in India, in the form of the MG Hector SUV. This entailed a further investment of $350 million.
The two most famous Chinese mobile phone manufacturers Xiaomi and Vivo had combined sales in India of$7.2 billion in 2017-2018. Xiaomi alone has crossed $2 billion in total sales in India, while Vivo generated $1.6 billion in revenue in 2018, doubling from the previous year.
Another Chinese success story BBK Electronics owns OPPO, Vivo and One Plus brands. All three brands were marketed separately in India in an aggressive strategy to capture market share. OPPO’s investments are in excess of $566 million. Vivo’s current and planned investments in India are $630 million.
Huawei, another global Chinese giant, currently facing US sanctions, has made a $170 million investment in an R&D centre in Bengaluru, its biggest outside China, as well as a $19.6 million global service centre in the same city. Has the IB at all investigated if Huawei has recruited talent from HAL or ISRO or other key strategic defence companies? In New Delhi, Huawei is investing $23 million in an Open Lab project, while in 2018, it unveiled a three-year plan to invest $100 million in manufacturing facilities in India and open more than 1,000 retail stores.
While the post-2014 period has witnessed a jump in Chinese greenfield investments, the biggest change in this period has been the inflow of Chinese funds for acquisitions in India. The single biggest deal in this space is the Fosun Group’s $1.09 billion acquisition of a 74 per cent stake in Gland Pharma in 2017. Besides the Fosun deal, most of the investments have largely come in the technology sector. In 2017 alone, when investments in this space peaked, startups in the e-commerce and fintech sectors attracted $7 billion in funding in total, both from home and overseas. From the reported deals, the three single biggest foreign investors in this space during this period were Japan’s SoftBank, China’s Alibaba and Tencent.
Effective from June14th, 1941, a good five-and-a-half months before Japan attacked Pearl Harbour, President Roosevelt froze all Japanese assets in the US. This was because Japanese troops had moved into Indo-China. After the Japanese Navy’s attack on Pearl Harbour, on March 11th, 1942, President Roosevelt established the office of the Alien Property Custodian to acquire the properties of any business enterprise in the USowned by the nationals of an enemy country. All Japanese assets in the US were acquired.
At Doklam,in 2017, after the Indian Army locked eyeballs with the PLA for 73 days, did the pullback happen because of the PLA pressure exerted via Xiaomi, OPPO, CRRC, Xinxing, Vivo, One Plus, Huawei, Fosun, Ali Baba, Tencent etal?
The Indian Army was politically instructed to vacate Doklam, and today, the PLA is in control of the entire plateau. What was the purpose of the face-off if vacating the site was going to be the ultimate result of choice?
The vicious and barbaric murder of Col Santosh Babu and 19 of his men in the Galwan Valley on June15th, 2020 by the PLA needs a robust, honest and strong response. Unshackle the Indian Army. Freeze all Chinese assets in India. Take steps to permanently acquire them if the PLA doesn’t pull back. For God’s sake, show them that we have a spine. Do what President Roosevelt did.