Make in India Investments Brings Jitters to China; Chinese Nationalistic Tabloid Warns Of India’s Rise In Manufacturing

In 2015, Chinese investments accounted for a paltry 2.2% share out of $39.3 billion FDI infused into India. But the rate at which this percentage is increasing has alarmed Chinese media.

At a time when more and more Chinese and Japanese manufacturing majors have started shifting their base to India, a leading nationalistic Chinese tabloid, which is known to be state-sponsored, has expressed their worry over India’s power and fame when it comes to manufacturing industry.

Global Times, which Wikipedia describes as ‘a daily Chinese newspaper under the auspices of the People’s Daily newspaper, focusing on international issues at a communist Chinese perspective’ has recently published an article, wherein India’s dominance in attracting smartphone manufacturers have been described as a ‘worry and warning’ for Chinese companies.

The article says, “Frankly speaking, China can’t afford that. The country has to ensure its competitiveness in production chains at a time when India is becoming a new processing base for manufacturers..”

The article highlights the fact that India is turning into a ‘new world hub’, as labor costs are going down in India, Govt. is supporting the industries, and leading manufacturers are shifting their base to India due to favourable business conditions.

The article said, “The industrial transfer will put pressure on China’s economy..”

What Triggered This Worry?

Recently, leading Chinese telecom equipment maker Huawei announced that they will start manufacturing smartphones in India, which will lead to more Chinese companies to India.

Under PM Modi’s ‘Make in India’ vision, we have already reported how Chinese and Japanese manufacturing majors have committed massive investments in India, and have started manufacturing high end smartphones and electrical appliances in India.

Taiwanese manufacturing major Foxconn has already decided to shift some of their Chinese manufacturing operations to India and committed investments of billions of dollars, which also includes manufacturing iPhones in India.

LeCo is starting production in India, so are Gionee and Asus.

Not only Chinese, but European, Japanese and Korean companies are also making a bee-line for India specific manufacturing – Toyota, Oppo, Ericsson, Samsung, Sony, and more companies are slowly but gradually starting manufacturing in India.

In an earlier article, Global Times had referred to Japan Bank for International Cooperation (JBIC) report, which stated that India will be the most favoured and preferred investment destination for their country in the next 5 years.

This recent article by a leading Chinese daily clearly highlights the fact that China is right now facing the heat generated by India’s manufacturing might and they are seeing India as a major disruptor of their #1 status in manufacturing niche.

Can India sustain this growth rate, and surpass China in manufacturing?

We will keep you updated.