Chinese tycoons absorb weakened Indian companies

India has tightened the rules for direct investment from China. Although China is India’s main trading partner, its government fears that state-sponsored Chinese billionaires will buy up Indian firms weakened by the pandemic. Therefore, Delhi ruled that Chinese businessmen can invest in India only with the permission of its authorities. Beijing called these measures discriminatory and violating WTO rules.

India has not become a pioneer in erecting barriers to Chinese investment. Suspicions about China’s plans are voiced by Germany, a number of other EU members, and Australia. All of them are afraid that powerful Chinese corporations associated with the Communist Party will begin to absorb cheap, stress-affected assets.

These countries decided to subject Chinese investors to scrutiny. But India has introduced more severe restrictions. A press release from the Ministry of Commerce of India states that organizations or individuals in countries that have a land border with India can make investments only through government channels.

But most importantly, China has become a second superpower, it is promoting its economic interests around the world, not disdaining to use a money bag as a weapon of expansion. As a result of the implementation of Chinese infrastructure and other projects, many countries with limited resources were in debt to Beijing.

Meanwhile, China is India’s main trading partner. The annual trade turnover is about $ 90 billion. But trade is asymmetric. More than 80% is imported from China, primarily machinery and equipment. And the real volume of Chinese investment in India is about $ 6.2 billion. Delhi is eager to get an investment, Western commentators say, and it has opened the gates to investors around the world. But China is an exception. The construction of obstacles for the introduction of Chinese business will be reflected primarily in the technology sector. Indeed, cooperation with China contributed to the rapid growth of the Indian financial and technological giant Paytm. He was supported by the Chinese Alibaba. Tencent Corporation has invested in Indian technology training firms and a product delivery platform for customers.

Also Read: How Indian Jobs Chug Along In Partial Lockdown Environment

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