- In order to make it easier for FDI to enter India, New Delhi on Wednesday launched a new policy document, consolidating the plethora of rules and norms governing foreign investment in the country under one comprehensive FDI document.
- In a survey by the American Chamber of Commerce in China earlier this year, a growing number of US companies polled that recent changes in Beijing’s FDI policies make them feel unwelcome in China. The survey echoes the darkening mood by multinational companies in China, who are now rethinking their China strategy.
We are at the cusp of economic history, rules are being re-written and alliances re-drawn, the earths economic axis is once again tilting towards the middle kingdom. We are living in China’s world.
Having reaped the benefits of opening up and becoming the factory of the world, China is today a dominant, influential, global nation. Having learnt both hard and soft skills from the West at record speeds, China is now keen on becoming self-reliant, or at least less dependent on the west. Already the factory of the world, the Chinese have built their own third generation telecom network, military equipment, aircrafts, they are keen to internationalize the yuan, conquer the future of the internet by helping to build IPv6 – the gen-next for web addresses and re-write trade and climate change policies. In Beijing its fairly clear now, whatever the west can do, we can do better.
The attitude exudes recent news of google quitting China. Its true, Google needs China more than China needs Google. For what its worth, they already have their own, highly successful version of Google in Baidu. The same goes for several other manufacturing and equipment companies. Truly nationalistic, the Chinese are keen on promoting local companies built with local talent and local technology. Thats why an increasing number of multinational companies feel unwelcome in China – after years of being pampered for their skills, they are slowly being shunned out.
The exact opposite is however happening south of the Himalaya’s, in India. The south Asian nation which has always been precautions of foreign investment dominating opinions and policies locally, is gradually opening the FDI floodgates. Realizing that massive investments are needed to develop in order to keep pace with China, the most recent union budget announced prudent measures the government would take to make India a more FDI attractive nation. Fiscal deficit is to be slashed from 6.9 percent this fiscal to 5.5 percent next fiscal year, inflation will be reigned in, direct and indirect taxes are to be consolidated and foreign investment rules are to be simplified. The very nation that once shut the gate on coca-cola is now wooing foreign investors in every industry and from every nation.
The tides are turning, India is putting her best foot forward to attract foreign funds, while neighboring China, 30 years after communism is keen on re-becoming self-reliant.