China: A Dying Investment Destination
China is trying to impose a kind of emergency across the globe by creating financial, trade and economic unrest. Initially, poor and under- developed countries could not understand the hidden agenda of China; and allowed to set up so called developmental projects in their counties. But the scenario is changing rapidly now. China has put hell of money in long term investments in African and South East Asian countries. The intention is clear – China wants to make strategic presence in every continent, every nook and corner of the world. China has forgot to take lessons from many past autocrats and dictators of the world. There was a time when China was ruled by Tokyo. Germany wanted to become super power at one point of time. Russia tried to control entire Europe. But time changes and the world order too changes accordingly.
We need to understand how come China got so much money to invest in every part of the world. The process started almost 31 years ago in the late eighties when Hu Jintao took over as General Secretary of the Communist Party of China replacing Zhao Ziyang. The decade of eighties in the last century was decade of unprecedented changes in geo political scenario. The Cold War between USA and USSR was moving in a different direction. Altogether new and different kind of strategic alliances were formed. South Asian Association for Regional Cooperation (SAARC) came into existence in 1985. George W. Bush laid the foundation of collapse of Soviet Union in 1985. East and West Germany came together to form a unified Germany. In the middle of all these landmark events China was putting his plans to capture the world by luring countries to invest in China to manufacture goods and articles at damn cheaper prices. Fortune 500 companies and giant Multi-National Corporations (MNCs) started getting attracted towards China’s fake liberal economic policies. Of course, these MNCs and Trans National Corporations entered into joint venture agreements with their Chinese counterparts, incorporated theirs subsidiaries in China as per prevailing corporate legal framework, and listed their stocks on Shanghai Stock Exchange. One important fact is to be mentioned here that most of the Chinese companies entered into joint venture agreement with the foreign companies were controlled and governed by the Chinese Communist Government.
The Chinese Government was very clear from the very beginning of its so called liberalization and opening up of economy for the western world. The intention was to get technological advancements from the western world by way of entering into business alliance and offering them cheaper production facilities as compared to the global production cost. The revenue generated by such collaborations was ploughed back constantly for the last three decades; and by the time China became major stakeholder in almost all major incorporations operating from China. Peoples Republic of China (PRC) was ambitious to enhance its geographic territories right form 1948. Tibet was occupied by China in 1951. As a matter of fact, India never recognised China’s occupation of Tibet. India gave asylum to Tibetans migrated from Tibet after China’s aggression; and this the most contentious issues between the two countries. China is constantly after Taiwan; and not letting it to be an independent sovereign country but opposing its status in United Nations of Organisations (UNO). United Kingdom, as part of an agreement, handed over Hong Kong to China in 1997. It was a clear understanding between UK and China that one country two system arrangement would be followed in terms of governance. China failed to honour its commitment; and had tried to impose communist rule on Hong Kong several times. China has created huge tension in South China Sea by creating artificial islands and posting its naval army in the region.
Spread of Corona Virus appear to be Waterloo of China. Of course Russia, Turkey, North Korea and few other Communist oriented countries are on China’s side but rest of the world has started maintaining distance from it. Annoyance from China has gone to the extent that the United States of America has passed bill in Congress against China to recognised Tibet as an independent state. The eyewash of China of economic reforms is getting over and the world is recognising Chinese menace strongly. Presently, almost entire Europe is against China. Australia has levied serious charges on PRC.
Business enterprises are interested in business and nothing else. Multi-National Corporations want a destination of operation from where they can run their business smoothly and peacefully. In the changed global economy post COVID-19, MNCs are no longer interested to operate from China. The astonishing reality is that as many as 1000 big MNCs are interested to shift from China immediately. Some 300 Trans National Companies (TNC) are having their plans ready for migration to other countries.
The entire world has learnt a lesson form PRC that it is not a reliable country in any manner – may it be business, social collaborations, strategic relations or anything else. In the name of medical science researches, it tried to play games with the other countries since 2002 when H1N1 was spread in South East Asia for the first time. The then Director General of World Health Organisation (WHO) – Dr. Gro Harlem Brundtland, a Norway citizen, asked China very strongly to stop all its international flights to control spread of H1N1 virus to the rest of the world. Initially, China tried to resist but finally it had to succumb to the wish of Dr. Gro Harlem Brundtland. China decided to have control WHO in long run. It was successful in inducting Dr. Margaret Chan, a Chinese citizen, as the Director General of WHO in 2006. The interesting part of WHO game is that despite being an Ethiopian Dr. Tedros Adhanom, the present Director General, is a mouthpiece of PRC. China played all tricks and tactics to hide its role in spreading of COVID-19 to the rest of the world but it couldn’t make it possible.
China did everything to penetrate into technological gamut of developed countries; and they were successful also to a larger extent. But COVID-19 has exposed China to the world. No body trust either China or its product today. China is no more an attractive destination of investment for business entities and developed countries. A fact must be brought to the public that so called developed countries and their citizens are very smart in protecting their investments and interests anywhere in the world. The phenomenon like China had happened several times in the past but at a very small level; and every time these developed countries were able to come out the situations very safely. This time, the stake is quite high and, hence, it will take bit time to settle down.
India is a country which has never been under control of any dictator, autocrat or under military control. The roots of Indian democracy is very strong. No politician can hold the complete power in the country. India is a proven democracy for the last seventy years; and it is getting stronger day by day. The Indian economy has seen unprecedented economic, political and social reforms in the last thirty years. The state of multiculturalism of India is unmatchable in the world. India has more than 250 speaking dialects. All major religions of the world are living with peace and harmony. Those who make hue and cry of religious matters are just a few to malign India’s image.
India is the most secure and safe destination for international investments. The Indian financial markets is highly robust and transparent. The Government of India has already done necessary reforms to make Indian capital and money market par excellence. MNCs are allowed to set up their venture by investing capital from 26% to 100% in various industries. Indian labour law was seen as a bit obstacle in the wake of smooth transition of MNCs from China to India but many states and even the Central Government has rationalized it recently. The political stability in India is quite strong and supportive to foreign investments of MNCs and TNCs. India is having strong business and strategic relations with important economies i.e. USA, France, Germany, Japan, Israel, Russia, Brazil and many more other countries.
India has emerged as the most reliable economy in terms of attracting international investments for prospective global growth and development. The Indian gesture during the pandemic COVID – 19 has been appreciated across the world. India supplied necessary medicines and other important commodities to the rest of the world during this crisis period. No country wants to go away from India expect China and its alliances. Even, it is quite difficult for China too to displease India in economic and strategic matters. India is polite as well as strong enough to the world depending upon issues and occasions. India protects interests of its neighbouring including SAARC nations; and always extends a helping hand in times of need and crisis.
The UNO has estimated that India may face a decline of 4.5% GDP loss during the COVID – 19 period, but despite all such adverse conditions it will attract unprecedented investment flow in the next five years. Indian states are make themselves ready for welcoming foreign investments with all goodwill gestures. Madhya Pradesh, Uttarakhand, Gujarat and Andhra Pradesh are the frontrunners in terms of negotiating with foreign companies for bringing in their investment to India. India has learnt important global lessons in the last so many years which is now being implemented in manoeuvring international financial inflows.
By Dr. Alok Chakrawal
(The writer is a Professor at Saurashtra University, Gujarat)