`Chinese facing challenge from Indian interest chain`

'Chinese facing challenge from Indian interest chain'

Last Updated: Thu, Dec 27, 2012 08:50 hrs

New Delhi, Dec 27 (IANS) The biggest challenge facing Chinese companies in India is to negotiate the existing stake-holders' interest chain in various industries, the head of a newly-formed trade panel said Thursday.

"The biggest challenge Chinese companies face in India is to thoroughly understand the stake-holders in the industry and fix the interest chain undermined by their low-price entrance," Li Jian Amit, secretary general of Chindia Chambers of Commerce and Industry (CCCI) told IANS here.

"From the Chinese investors' experience here, they are aware that, besides the government, there are miscellaneous stake-holders in India. Besides buyers and sellers, there are various industrial organisations, media, financial groups, investors, employees and communities," Li said.

Chinese companies usually pay attention only to buyers and ignore other stake-holders who decide their long-term sustainable growth in India. CCCI was formed in response to the need felt by the Chinese companies to analyse and understand industrial interest chains in India, he said.

Li is also a Hindi language scholar and a former executive here with Chinese telecom giant Huawei which makes him eminently suitable for the new venture here.

CCCI has among its members major Chinese companies like Huawei, ZTE, China Shipping India Ltd., Dongfang Electric and China International Airlines besides many other firms keen to invest in India but who are yet to acquire assets or set up offices here.

Chinese investments in India are growing in a number of diverse fields. Most are still in infrastructure, raw materials, and electronics. However, over the past three years, Chinese companies have started to enter India's service industries such as healthcare, finance and IT.

According to Li, after two to three decades of growth at home, Chinese companies know better than western companies about competing in low-priced Indian markets.

Their comparative advantage is their ability to provide products and services that suit India's market demands and are more cost-effective than western competitors.

The India-China goods trade recorded an increase of almost 20 percent for 2011 at $73.90 billion, and as per China's commerce ministry figures Chinese investments in India till December 2011 stood at $575.70 million.

Li pointed to the long delays faced by Chinese companies in getting approvals to register their project offices or Indian subsidiaries holding up projects.

Stringent business visa requirements and long delays in getting employment visas were among the other hurdles in the way of Chinese business in India, Li said.

More from Sify: