China Global Investment Tracker (CGIT), claims that Chinese companies have invested close to 1,10,000 Crores between March 2007 to December 2019, these investments were spread over 43 deals, majority of them (23) were greenfield investments in energy, telecom, technology, metals, consumer durables, and real estate sector.
The Chinese economic influence is no longer restricted to traditional businesses such as electronic items, pharmaceuticals and fertilizers.
Information Technology sector, that was until recently, monopolized in India largely by American, Korean and Finnish corporations has witnessed massive transformation in the last 5-6 years.
Speaking of Start-ups,China has invested close to Rs 30,000 crore into Indian Tech Start-ups in the last half a decade or so.
Chinese manufactured cell phones today contribute to 72% smartphone market share; key brands include Mi, One Plus, Vivo, Oppo and Huawei.
18 most prominent startup unicorns (a startup valued of over a billion USD) have been funded by the Chinese Investment companies, they include:
BigBasket , Byju’s, Delhivery, Dream 11, Flipkart, Hike, MakeMyTrip, Ola,Oyo
Paytm Mall, Paytm.com, PolicyBazaar, Quikr, Rivigo, Snapdeal, Swiggy, Udaan & Zomato
Today, Chinese video sharing platform TikTok has more subscribers in India than google’s Youtube.
What’s the Risk?
With more than 600 million internet users second only to China, the usage of Chinese Hardware and software’s present a threat to data security.
Popular Chinese apps among 100 most downloaded in India
Entertainment: TikTok, LIKE & Kwai
Gaming: PUBG, Mobile Legends, Clash of Kings
Social Media: SHAREit, Helo
Web browsers: UCBrowser & UCBrowser Mini
Live video streaming: LiveMe, Bigo Live & Vigo Video
Utility: BeautyPlus, Xender & Cam Scanner
E-com: Ali Baba, Ali Express, ClubFactory, Shein &Romwe
China – The Scheming Neighbour
China has today mastered the art of routing its investments in India through back offices of its companies based out of Mauritius, Hong Kong and Singapore, thus evading official FDI routes from China to India.
In the last two decades. the proportion of China’s “actual” FDI in India thus account only for 0.51% of total FDIs, totaling to $2.34Bn.
How is India Reacting?
Indian government has banned FDI under automatic route from bordering countries, this move has been aimed at preventing opportunistic takeovers of Indian companies by the Chinese.
The trigger for banning FDI under automatic route as per experts has been People’s Bank of China’s decision to increase its shareholding in HDFC Bank to 1.0 percent from the earlier 0.8 percent.
Post economic slowdown attributed to COVID 19, India also foresees Chinese companies buying distressed Indian companies at throwaway prices.
Government of India’s move to ban FDI has found support across political lines, given genuine apprehensions and manipulative Chinese practices of strategic backdoor acquisitions in the neighboring countries of India.