From Shanghai to Wenzhou, China bets big on Make in India

Building on ambitious investment pledges unveiled during Prime Minister Narendra Modi’s visit to China last year, China will signal a bigger role for Make in India at a business event in Mumbai next month. The India opportunity has ignited enthusiasm of Chinese investors.

Moving beyond Shanghai and Beijing, a high-profile delegation of entrepreneurs from Wenzhou, the birthplace of China’s economic reforms, will participate in the Make in India Week in Mumbai from February 13-18 February. The industry event will provide a platform to showcase the potential of design, innovation and sustainability across sectors in the coming decade.

This group of entrepreneurs from Wenzhou initiated the India China Economic and Cultural Center (ICECC) in September last year and launched the Business Forum of Make in India in the city through the coordination of the local municipal government of Wenzhou and the Consulate General of India in Shanghai.

From Shanghai to Wenzhou

Wenzhou, located in the southeast of Zhejiang province, is known for its legendary entrepreneurial spirit. With the launch of the ICECC last year, Wenzhou has become the first city in Mainland China to have launched a centre exclusively focused on promoting economic and cultural activities in India.

With India emerging as the world’s fastest growing economy amid China’s dipping economic growth which has sunk to 25-year-low, Chinese investors are proactively scouting for new opportunities abroad, and India is increasingly becoming their preferred choice.

Nan Cunhui, president of Zhejiang Federation of Industry and Commerce (ZFIC), has big investment plans for India, starting with $1.6 million in the renewable energy sector. Similarly, the Aokang Group with interests straddling leather, real estate development and textile machinery sector, is also looking at investing in India, said Zhentao Wang, the chairman/CEO of the Chinese conglomerate. Yalong Group has signed a MoU with a Rajasthan-based institution for supplying technical training equipment to improve the skill set of youth in Jaipur.

The enthusiasm for investment in India was also palpable at an investors meet in Shanghai, with more than 200 Chinese companies present. Officials of Chinese companies cited a good many reasons for investing in India: these include the changed business environment, ease of doing business, cost of hiring labour and the volumes of project opportunities in India. Representatives of leading Indian companies like Larsen and Tourbo, Adani Group and Reliance also attended the meet and pitched for collaborations.

Make in India was launched in September 2014 to invigorate the manufacturing sector by attract more Foreign Direct Investment. The project seeks to make India a part of the global supply chain by inviting investment in diverse sectors such as defence, railway, construction and insurance.

China taps India opportunity

Wu, founder and the CEO of Mobile World (Shoujibao), has sent officials to India to gauge the Indian market of mobile-handsets and components. ”The three things that drew us to India are its population, the vastness of the market and the Make in India drive by its government,” Wu said in a recent “China-India Mobile phone and Component Manufacturing Summit” organised on January 13 by the Indian Cellular Association (ICA). “Going by the encouraging response of Chinese companies and definitive joint collaboration talks between the Indian and Chinese mobile and handset manufacturers, Chinese investment of $2-$3 billion (roughly Rs. 13,360 crores – Rs. 20,040 crores) over the next two years looks like a real possibility along with employment for 100,000-200,000 people”, said Pankaj Mohindroo, national president, Indian Cellular Association (ICA).

Twenty four agreements were signed worth over $10 billion during Mr Modi’s visit to China. The two countries had fleshed out plans for increased Chinese investment in India’s infrastructure sector, including the modernisation of railways. Since then, there is a marked upswing in the flow of investments. China’s equipment manufacturer Sany Group is planning to invest USD 5 billion (about Rs 33,000 crore) on renewable energy, construction equipment and housing in India.

China’s e-commerce giant Alibaba has ploughed in $500 million in India e-retailer Snapdeal, and has invested $680 million in start-up Paytm. Tencent, the Chinese gaming giant, has also landed a huge deal with an investment in the healthcare start-up, Practo, an app to connect patients and doctors.

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