More reports on: Economy - general

'Indian defence moves could hit investment from China'

news
21 July 2016

India's deployment of combat vehicles near its border with China could lead to misunderstandings and impact the flow of Chinese investment into India, a Chinese media report said today.

The opinion piece in nationalistic tabloid Global Times said it was ''puzzling'' that India was stationing 100 Russian tanks at the Line of Actual Control (LAC) while simultaneously wooing Chinese investment.

The newspaper was reacting to reports from India, which earlier this week said the Indian Army had for the first time since the 1962 war positioned Soviet second-generation T-72 tanks in Ladakh. The military forces are set to maintain them in fighting condition in sub-zero temperatures typical of the high-altitude region of Jammu and Kashmir.

Lt Gen S K Patyal, Commander of the Leh-based 14 Corps, said the country had to defend its international borders. ''Whatever it takes in terms of infrastructure and accretion, we are doing it in the best possible manner,'' he told NDTV.

The Chinese media reaction was quick, though it did not mention that Beijing had been ramping up military and civilian infrastructure like roads along the LAC for decades. It is widely believed that its armed forces' capabilities along the disputed border are superior to India's.

The report also did not mention that it was the same newspaper that said the Tibet Military Command's status was elevated recently with an eye to a war with India.

The newspaper's opinion piece was on the lines that China was anyway doing India a favour by investing in a country where people were illiterate and the business environment bad.

''In an index on the ease of doing business, from the World Bank, India currently ranks 130 out of 189. Despite India's stated goal to rise to within the top 100 this year, the nation has its work cut out for them,'' it said.

''Additionally, the illiteracy rate in India remains high and continues to hinder the country's efforts to improve its productivity, adding to evidence that India cannot make itself a promised land for Chinese manufacturers overnight.

''On top of all this, India is deploying tanks!

''Furthermore, the deploying of tanks near the Indo-China border may hit a nerve within the Chinese business community, causing investors to weigh the threat of political instability when they make investment decisions,'' said the opinion piece written by Hu Weijia.

''The continuous efforts by India's government to improve its foreign investment environment deserve applause, but now it seems there needs to be more focus spent eliminating investor's misgivings over non-economic factors.''

Chinese outbound investment has gone up by about 58.7 per cent in the first half of the year.

''This new wave of Chinese investment only just begins to meet India's rising import demands. The People's Daily said Wednesday that the Modi administration has recently promoted a second round of reforms to attract more overseas investment by allowing foreign firms to increase their shareholding in local enterprises.

''However, it is puzzling that while deploying tanks near China's border, India still strives to woo Chinese investment.''

India, it said, should learn from China's experience.

''During its own initial stage of industrialisation and urbanisation, China put aside political disputes and concentrated on economic development. To an extent, this may serve as a roadmap for India's government,'' it said.

It added, ''In the long run, there is large potential for a successful relationship between China and India, especially in the manufacturing sector. In order for that possibility to become a reality, both China and India will need to work hard to clear up misunderstandings in a bid to lay a solid foundation for the sustainable development of economic and trade cooperation.''

(See: Army deploys more T-20 tanks in Ladakh, near China border)





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