The Voice
of the Free Indian
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China's electronic industry keen
to invest in India
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China's electronic industry keen to invest in India
http://www.rediff.com/money/2003/jan/23china.htm
Fakir Chand in Bangalore | January 23, 2003 18:45 IST
Beware, the Chinese are coming!
Riding on a booming economy even in a world of downturns and
war clouds, the Chinese electronic industry is eyeing India as
its next destination to outsource components and finished goods
for expanding its global market share.
With political, economic and cultural relations between India
and China on rebound, the Chinese manufacturing sector is keen
on investing in India to set up either subsidiaries or joint ventures
in the hardware sector, which in turn, could bail out the fledgling
Indian electronic sector in the current decade.
As a sign of their determination to target India for marketing
their goods and entering into collaborations with their Indian
counterparts in the hardware segment, about 50 companies from
Mainland China and Taiwan have descended in Bangalore this week
to participate in ComponexelectronicIndia2003, the four-day annual
international expo-cum-conference on electronic components, materials,
and production equipment.
China National Electronics Import & Export Corporation deputy
chief Zhan Tiebao told rediff.com in Bangalore on Thursday that
the China was looking for greater interaction and participation
with India to leverage upon their strengths in hardware and software
segments respectively.
"India and China are not only the two largest countries
in the Asian region with a combined population of over 2.5 billion,
but are also endowed with skilled workforce and abundant natural
resources. Globalisation and converging technologies are uniting
countries and people the world over as never before.
"If India and China can jointly market their respective
software and hardware skills and products, they will have a win-win
situation in the emerging digital world. India is software giant
as China is in hardware. Both the countries should take advantage
of their strengths and mutually benefit," Zhang stated.
For instance, India exports about 70 per cent of its software
to the US and Europe, while China exports about 90 per cent of
its hardware goods to the western markets. But in turn the US
exports 90 per cent of software to China, and 60 per cent of its
hardware to India.
If India and China can come together, they can not only cater
to the entire world, but also dominate their own domestic markets.
"China is ready to help build world class facilities in
India to manufacture all kinds of electronics and consumer goods
and enable India emerge as a hub for assembling lines and components.
With increasing use of software from design and development in
end-products, India will stand to gain a lot by emerging as a
manufacturing hub of Asia on the lines of China, Taiwan, Japan,
South Korea, and Malaysia," Zhang asserted.
Asked whether the Chinese industry has any timeframe for foraying
into India, Zhang said India needed to open up more and improve
its infrastructure to match the requirements of the Chinese entrepreneurs.
Though India is moving in the right direction so far as its import
tariff and other taxation measures are concerned, a lot more needs
to be done on labour reforms, single-window clearance and efficient
transport sector, be it roads, sea ports, or airports for faster
shipments and travel.
"Since India has agreed to reduce import tariffs on all
IT and electronic products to zero duty by 2005, and bring about
pro-active reforms in the industry on taxation and regulation
fronts, we can certainly make an entry into India for setting
up our own production units here or supply raw material to outsource
our global requirements in components, embedded software, and
electronic production services through contract manufacturing,"
Zhan affirmed.
According to Chinese Electronics & Information Industry Chamber
of Commerce project manager Yuan Xull, India should have more
Special Economic Zones and high technology zones so that Chinese
enterprises and other overseas investors could set shop here as
was being done in China over the years.
"India needs to have radical policies at the central, state
and provincial levels, with flexible labour laws, exit policy
and freedom to do business by anyone under local conditions as
there is no dearth of skilled workforce and other resources,"
Yuan pointed out.
Referring to the phenomenal growth of the electronic industry
in Mainland China, Yuan said production was estimated to grow
up to $111 billion by the end of 2002 from $53 billion in 2001.
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