Time for 'Chindia' JV to combine China-India strengths:experts
Backing India's demand to provide greater access to Indian IT products to address the trade imbalance, Chinese analysts have suggested "Chindia" products, combining Beijing's manufacturing might with New Delhi's expertise in software sector.
"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," said Hu Shisheng, Director of the Institute of South and Southeast Asian and Oceania Studies at the China Institutes of Contemporary International Relations.
"China-India cooperation can also be conducted in many sector, including new energy, new materials, resource conservation and environmental protection," he told state-run China Daily today.
"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," he said.
"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.
The best choice is that China's giant companies cooperate with Indian consortiums and gradually advance the regional reforms in India and improve the investment environment, he said.
India has been pressing China to open for IT and Pharmaceuticals to enable it to bridge nearly USD 29 billion trade imbalance last year in about USD 66 billion trade.
Several Indian firms including TCS, Infosys and Wipro are present in Chinese market but among them only TCS managed to penetrate the local market garnering few hundred million dollars business while the rest cater to multi-national firms.
India is also asking China to step up investments in its infrastructure development.
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," Hu said.
China has USD 700 million worth of investments in India but at the same time handling contracts worth about USD 60.2 billion in India at present.
Hu said India's 12th Five-Year Plan, which ends in 2017, will demand an investment of more than USD one 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, said China has 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.
According to 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 USD 106.4 billion and an accumulated realised turnover of USD 70.1 billion, both accounting for 11 per cent of China's total.
Meanwhile, China's non-financial direct investment in South Asia jumped 39 per cent year-on-year in 2012 to about USD 400 million.
Stressing on India-China cooperation, former Chinese Ambassador to India Hua Junduo said that China has advantages in manufacturing and infrastructure construction, and it has contracted to build a large number of projects, such as power stations, telecommunications, subways and bridges, in India.
India's comparative strengths in information technology, software, outsourcing, biotechnology and pharmaceuticals have great potential in the Chinese market.
In addition, China and India can further promote exchanges and cooperation in agriculture, energy, the environment, healthcare, education, media, culture and tourism, he said in an article in state-run China Daily.