Why China Should Support “Make in India”

Ravi Bhoothalingam, Honorary Fellow, ICS

A version of this article was originally published in Chinese as ‘中国为何应支持“印度制造”’ (Zhongguo weihe ying zhichi “Yindu zhizao”), 第一财经 (Yicai), 4 April 2017. This is part of a series by Indian scholars in China’s top business affairs news portal facilitated by the ICS. The Chinese version follows below the English text.

“Make in India”—a signature campaign of Indian Prime Minister Narendra Modi– was launched in late 2014 with the objective of transforming India into a dynamic global manufacturing hub, and thus radically enhancing employment and the prosperity of the Indian people. Just a few months later came an announcement from China’s State Council of “Made in China 2025”—a set of eight policy measures to re-orient the Chinese manufacturing sector in line with the country’s economic structural adjustment program. So, are “Make in India” and “Made in China” competitive programmes which coud drive another wedge between these two nations?

To answer this question, we need to understand the nature of both “Make in India” and “Made in China” more closely. Continue reading “Why China Should Support “Make in India””

Sheikh Hasina’s India Visit: China in the Background

Jabin T. Jacob, PhD, Fellow, Institute of Chinese Studies

Bangladesh Prime Minister Sheikh Hasina state visit to India from 7-10 April came after at least two postponements. The difficulty in getting the visit to take off is a far cry from the warmth and cordiality that was on display in words and deeds during Indian Prime Minister Modi’s visit to Dhaka in June 2015.

Hasina’s reservations had to do with her fear of coming away from New Delhi without any agreement either on sharing the Teesta river waters or on constructing the Ganges Barrage on the Padma river at Pangsha near Rajbari, which is what has happened. The agreement has fallen through multiple times during both the UPA tenure as well as during Modi’s visit and despite Dhaka agreeing to major India’s major demands of allowing transit of goods to Northeast both from Indian mainland overland through Bangladesh territory and by sea through the Bangladeshi ports of Chittagong and Mongla.

The Contrast

The coming state visit will be Hasina’s first in seven years to India and it might be useful to compare and contrast the progress in Dhaka’s ties with China – India’s principal challenger for Bangladesh’s affections – in the meantime. Continue reading “Sheikh Hasina’s India Visit: China in the Background”

China and the Iran-Saudi Rivalry: Towards a Greater Role?

Kishorchand Nongmaithem, Research Assistant, ICS

In January last year, when the Chinese President Xi Jinping visited Iran, the two countries agreed to expand their commercial ties to US$600 billion in the next ten years.[1] On that visit, Iran’s Supreme Leader Ayatollah Ali Khamenei told Xi that, “Iran never trusted the West” that’s why Iran “seeks cooperation with more independent countries” (like China).[2] China also welcomed Iran to work together under its ‘Belt and Road’ connectivity framework.[3]

A year later in March 2017, King Salman bin Abdulaziz of Saudi Arabia visited China, and during his three-day stay, the two countries signed deals worth US$56 billion that included 14 cooperative agreements and 21 other deals on oil production, investment, energy, space and other areas.[4] Continue reading “China and the Iran-Saudi Rivalry: Towards a Greater Role?”

2017 NPC: Centralizing While Attempting to Reform

Prof. Manoranjan Mohanty, Honorary Fellow, ICS & Vice-President, Council for Social Development, New Delhi

The ten-day session of China’s parliament – the National People’s Congress (NPC) – that concluded on 15 March was not an ordinary annual event that puts its stamp of approval on the already worked out policies by the leadership of the Communist Party of China (CPC). This was the last session of the nearly 3,000-member 12th NPC that was formed along with the assumption of the office of the president by party general secretary Xi Jinping. In many ways it gave a preview of the things to come at the 19th Congress of the CPC later this year in October-November.

Two areas threw up some conspicuous trends. First, Xi’s political leadership and his perspective on domestic and international issues were affirmed. Second, the need for strict measures to maintain stability in the country as a whole – and in Xinjiang and other ethnic minority areas, in particular – was reasserted. Whether these measures will prove adequate in coping with emerging challenges is an open question. Continue reading “2017 NPC: Centralizing While Attempting to Reform”

Structural Transformation in the Chinese Economy: From Manufacturing to Services

Zhang Bin, PhD, Senior Fellow, China Finance 40 Forum & Chinese Academy of Social Sciences, Beijing

A version of this article was originally published in the Business Standard as ‘The way forward for the Chinese economy’, 18 March 2017. This is part of a series by Chinese economists facilitated by the ICS.

As part of the cycle of economic development, all advanced economies have undergone industrialization and post-industrialization. Industrialization involved the manufacturing sector’s focus on increasing GDP, employment rate and consumption of manufactured products. For China, the post-industrialization phase implies economic activities will be concentrate in the service industry.

Based on measures of income level, the rate of growth of the manufacturing sector, employment rate and the consumption of manufactured products, China has passed the peak of industrialization. If global experience is a guide, the peak of industrialization happens when per capita GDP ranges between US$8,000 and US$10,000 (PPP based on 1990 value). After reaching the peak of US$10,000, the proportion of the industrial sector indicators continues to decline. By this yardstick, China has passed the peak of industrialization. Continue reading “Structural Transformation in the Chinese Economy: From Manufacturing to Services”

China’s SAARC Bid and Implications for India

Gauri Agarwal, Research Intern, Institute of Chinese Studies 

Pakistan’s support to China for full membership to SAARC and India’s refusal to entertain the bid is a case of the use of geopolitics to pursue selfish aims. Whether China will be accepted or not remains to be seen, but what China brings to the table needs a careful cost-benefit analysis.

SAARC’s Shortcomings

The importance of SAARC as a regional organization is recognised by all leaders. But there is a frank acknowledgement that the organization has failed to live up to the hope and aspiration of one-fifth of humanity. Continue reading “China’s SAARC Bid and Implications for India”

Chinese Steel Industry’s Improving Performance and Implications for India

Aravind Yelery, PhD, Assistant Director, Institute of Chinese Studies

China recorded the highest global production of steel in 2016 despite its slowed growth rate. This suggests that steelmakers were focused on boosting output because they were eager to capture higher profit margins.

Steel production in China increased to 68,510 thousand tonnes in October 2016 from 68,170 thousand tonnes in September. Monthly production in China averaged 29,010.98 thousand tonnes from 1990 until 2016, reaching an all time high of 70,650 thousand tonnes in March 2016 with a record low of 4,918 thousand tonnes in February 1990. The rising trend in capacity continued from 2015 when China’s national steel output was 1.1235 billion tons, up by 0.6 percent over the previous year. Continue reading “Chinese Steel Industry’s Improving Performance and Implications for India”