India's business leaders are urged to invest in China
Friday, November 29, 2002
asia.scmp.com
MASEEH RAHMAN in New Delhi
India wants its business leaders to get over their fears about foreign markets and invest abroad, including in China.
"Go out. Go beyond exports. Go into investment," Foreign Minister Yashwant Sinha said at the India Economic Summit in New Delhi this week.
"Look at the Chinese. Despite having to cater to a huge domestic market, Chinese businesses have ensured they do not become prisoners at home by constantly investing abroad."
"Let's also venture out and forth," said Mr Sinha, who when he was finance minister had to deal with stiff opposition within government to his economic reform programme.
References to China and its economic achievements were constantly made during the two-day conference.
Foreign experts advised India to "give up your lack of confidence in dealing with China, stop looking over your shoulder", and to instead explore common areas in the economies of the two countries.
Professor Jean-Christophe Iseux, a professor at Beijing's Renmin University and a special member of the Chinese People's Political Consultative Committee, told business leaders that in the short term the best way to take the India-China partnership to a different level was by investing in China.
"More than ever, China needs rapprochement with India," Professor Iseux said.
"In the long term, a coalition between India and China could make the G-77 [the group of developing nations] an effective lobby and help in advocating common causes in forums such as the United Nations and the WTO," he said.
The call for greater economic co-operation at various levels between India and China appeared to evoke a positive response among the business elite at the conference.
Industrialist and former Confederation of Indian Industry chief Arun Bharat Ram said Indian companies were just beginning to look at investment in China.
"While the two economies will be competitive in many respects, there will be synergies and avenues for co-operation," he said.
He identified several sectors - iron and steel, vehicle parts, chemicals, pharmaceuticals, processed foods, even agriculture - where co-operation would be of mutual benefit.
"In agriculture, for instance, productivity is still on the rise in India but has plateaued in China," he said. "We could come together to become world suppliers of food."
A delegation from the China Council for the Promotion of International Trade has been in New Delhi holding discussions with the confederation. The Indian group has suggested setting up an industry-level dispute settlement system for use between India and China.
Despite all the talk about greater co-operation, a survey of more than 100 corporate leaders at the economic summit showed that business confidence in India was at a low ebb.
Only 6 per cent of the business leaders surveyed felt that India would exceed China's competitiveness in the next five years. Just 4 per cent believed that India could reach 8 per cent growth rate during the next 20 years.
The lack of optimism is also the result of the perception that the government of Prime Minister Atal Behari Vajpayee faces strong opposition from within in its bid to push ahead with major economic reforms.
Confederation chief economist Omkar Goswami said if reforms were to succeed, the coherence, credibility and communication of economic policy would be extremely important.
He said: "The consensus among participants at the conference was that the business-as-usual approach [among policymakers] would fail to generate even 5.5 per cent annual growth." |
