Chinese property billionaire Wang Jianlin attended the Happening Haryana: Global Investors Summit held in Gurgaon, 28 kilometres from New Delhi, early in March 2016. This was after his group, Dalian Wanda, made a big-ticket investment of Rs600bn ($8.8bn) to build an industrial zone in the Indian state of Haryana in January. The first phase of Wanda Industrial New City, as it will be known, may begin this year, and it is expected to host companies in industries ranging from software to automobiles to healthcare. However, security and law and order issues will be a factor, as the state has recently been rocked by violent agitation by the Jat community.
China’s slowing economy is turning out to be a huge FDI gain for India. China has a lot of resources available to invest, while India has a strong need for more infrastructure, such as roads, highways, bullet trains, industrial parks, telecoms facilities, ports and airports. China has run out of surplus labour and wages are rising fast. Some of its labour-intensive industries, such as textiles, have begun to shift to lower-wage economies, for example, Vietnam and Bangladesh. This is a huge opportunity for India and especially for the 'Make in India' programme launched by prime minister Narendra Modi in 2014.
Chinese investments in India have been rising since 2015. Equity inflows were eight times higher between April and December 2015 at $425.7m than they were over the same period in 2014 when $51.5m was recorded, according to India's department of industrial policy and promotion. Among the investors is Alibaba in e-commerce and telecoms and Huawei in technology. Also, two industrial parks are on the way in Maharashtra and Gujarat. And, as noted earlier, Dalian Wanda is planning very sizeable investments in property. This flurry of interest has arisen since 'Make in India' was launched in order to encourage investment in domestic manufacturing.
FDI figures have also been reported by US-based think tank Heritage Foundation. According to its China global investment tracker, between 2005 and 2016, Chinese investments of $100m or more account for an aggregate $20bn. Of this, FDI accounts for $7.8bn and construction $12.3bn. The uptick in investments began in 2015, according to the Heritage Foundation. Of the $7.8bn of FDI, three-fifths was recorded in 2015, including $1.1bn from Alibaba, $1bn from Genertec in steel, and $790m from small and medium-sized enterprises based in China.
Last year, the world’s largest electronics contract manufacturer, Foxconn, announced a $5bn investment proposal in the state of Maharashtra. Shortly after, the Chinese personal electronics and smartphone manufacturer Lenovo announced plans to start local manufacture of smartphones at Sriperumbudur near Chennai in Tamil Nadu. Privately owned Chinese electronics company Xiaomi is also producing a locally assembled smartphone. Then there is a proposal by China’s biggest auto manufacturer, SAIC Motor Corp, to make vehicles in India by taking over General Motors’ facility in the state of Gujarat.
Many Indian start-ups are also looking to Chinese investors for funding. China’s Cheetah Mobile is planning a series of investments, a process it began last November by leading a $12.7m round for GOQii, a wearable fitness device maker funded by an Indian entrepreneur, according to the Financial Times.