'Chindia' seen to have great potential
The emerging Indian market will continue to attract project-contracting businesses from China as experts call for more mutual investments and cooperation between large companies to tap the huge markets in both countries.
“China’s project-contracting business in India will maintain fast growth because the market is huge and the long-term prospects are very bright,” said Hu Shisheng, director of the Institute of South and Southeast Asian and Oceania Studies at the China Institutes of Contemporary International Relations.
He added that India’s 12th Five-Year Plan, which ends in 2017, would demand an investment of more than US$1 trillion (Bt30 trillion) in its infrastructure sectors and bring great opportunities for Chinese project-contracting companies.
Wang Zaibang, vice president of the China Institutes of Contemporary International Relations, added that China had the world’s leading advantage in project contracting with its low costs, outstanding management and advanced equipment facilities. “The business in the Indian market is of great potential in the short term,” he said.
India is China’s biggest trade partner in South Asia and also an important investment destination and a leading overseas market for the project-contracting business, according to Chinese Vice Minister of Commerce Jiang Yaoping.
By the end of 2012, Chinese companies in South Asia had achieved an accumulated value of project contracting of $106.4 billion and an accumulated realised turnover of $70.1 billion, both accounting for 11 per cent of China’s total, according to the Commerce Ministry. Meanwhile, China’s non-financial direct investment in South Asia jumped 39 per cent year on year in 2012 to about $400 million.
Premier Li Keqiang arrived in India on Sunday for the first leg of his maiden foreign visit in the post. China expects the visit will further enhance the strategic and cooperative partnership for peace and prosperity between the two countries and expand cooperation in mutual investment, bilateral trade and the infrastructure sector to complement each other’s advantages for win-win results, Vice Foreign Minister Song Tao said. Compared with the fast-expanding trade volume, mutual investments between China and India are still small, Hu said.
“India is well developed in services, including IT and software, and the future is promising for the two countries to set up joint ventures and increase mutual investments as well as trade in services, which will ease trade imbalances. The joint ventures can build up our own brand of ‘Chindia’ and set up our own quality standards. Together we have a market of more than 2.7 billion customers and can test any new product,” he said.
He added that the best choice was that China’s giant companies cooperate with Indian consortiums and gradually advance the regional reforms in India and improve the investment environment.
“China’s strength in manufacturing, if supported by India’s software, will create shining prospects for the two countries in advanced manufacturing, especially in intelligence. China-India cooperation can also be conducted in many sectors, including new energy, new materials, resource conservation and environmental protection,” Hu said.
