When Oppo, a Chinese smartphone maker, earlier this year took over the sponsorship of the Indian cricket team, many a light-hearted reference was made by observers to a Chinese “invasion”. Another Chinese brand, Vivo, is also the title sponsor of the glitzy Indian Premier League (IPL) tournament, ongoing at the moment.
China’s move to dominate the sports industry in the cricket-mad country is symbolic of the nation’s broader growing interest in India as a market to invest and expand in.
“China has invested a huge amount of money into the United States and now they’re moving towards India,” says Yogesh Bansal, an angel investor and entrepreneur based in Delhi.
“India being a major growth economy of the world and having amazing demographics with a young population and the mobile technology and a lot of internet penetration, it’s a huge market which needs to be captured.”
India’s major e-commerce marketplace Flipkart said last week it had raised US$1.4 billion from China’s Tencent, Microsoft and eBay.
Chinese internet company Alibaba in March agreed to invest $177 million into the Indian online technology company Paytm.
Chinese smartphone brands, including Huawei, Xiaomi, Vivo, and Oppo are all planning to launch manufacturing facilities in India.
However, the total figure for foreign direct investment (FDI) from the country is still relatively low. Last year, a record figure of more than $1bn of FDI flowed into India from China, according to figures from the Indian government. India’s prime minister, Narendra Modi, has actively been trying to boost economic ties with China and attract investment into areas such as infrastructure. He has talked about a “look East, link West” policy, as India tries to boost its role in the global economy, and attract more foreign investment to create more jobs for its population. During a three-day visit to China two years ago, the two countries signed $22bn of business deals in sectors ranging from telecoms to solar energy.
China has agreed to set up industrial parks in Gujarat and Maharashtra, and is getting involved in India’s railway development plans. Wanda Group, which is owned by the Chinese billionaire Wang Jianlin, last year revealed plans to develop a $10bn industrial zone in the state of Haryana in north India, called Wanda Industrial New City
China has also outlined plans to invest billions of dollars to help overhaul India’s creaking infrastructure.
But Mr Modi has described the relationship between the two countries as “complex”.
There are political tensions, for example, over borders in the north – something which has flared up in recent days because of a visit by Dalai Lama, the Tibetan Buddhist leader who is in exile in India, to a disputed territory in north east India, which China claims belongs to them. The relationship between India and China is also strained by the fact that China has been investing heavily in Pakistan.
China and Pakistan have created an economic corridor which passes through disputed territory in Kashmir, a move that has irked India.
Despite these political differences, business ties between India and China have continued to strengthen.
“While formal FDI and trade flows between India and China are certainly on the rise, there is a much higher level of cross-border collaboration happening in parallel across the venture and innovation ecosystem,” says Ajay Hattangdi, the group chief operating officer and chief executive India for InnoVen Capital, a venture lending platform.
“India is among the fastest growing global economies and driven largely by the domestic consumption story which the Chinese investors understand.”
While there are definite cultural and political differences between the two countries, they are also able to find significant common ground. They are both rapidly developing economies with large populations and growing wealth and consumer spending.
“The Chinese investors, mainly successful privately funded companies themselves, are attracted by the opportunities provided by the large Indian market which feels somewhat similar to their own markets in many ways,” says Mr Hattangdi. “We are witnessing the coalescing of a more closely knit pan-Asian innovation economy where the search for investor returns drive the flow of capital and entrepreneurial talent across boundaries.”
Nikhil Khandelwal, the managing director at brokerage Systematix Shares and Stocks, says Chinese FDI into India is primarily driven by their engagement in the Indian automotive sector, infrastructure sector, electronics, particularly mobile phones and consumer goods manufacturing, and Chinese companies and investors thronging the Indian e-commerce and technology industry.
“While the automotive industry has seen the maximum investment share over the past five years, the fast rise of electronics, e-commerce, technology and infrastructure sector investments are gaining at a much faster pace and are set to make China amongst the top ten FDI investors in India in the next three to four years,” Mr Khandelwal adds.
Notably, India has its own plans to transform itself into a manufacturing hub – following in the footsteps of China – under Mr Modi’s flagship Make in India programme, which is a move that could result in the two countries competing. As it stands, India-China bilateral trade reached close to $71bn last year, but India has a trade deficit with China of more than $46bn, with imports into India heavily outweighing its own exports to the Chinese market.
Fahad Khateeb runs a business in Mumbai that manufactures LED lights and source components and other products from China, so he travels to China several times a year for his operations.
“India of course has tremendous potential,” he says. “We’re a very price-sensitive market and the Chinese are the only ones in the world who have the capability to manufacture or to produce at all the different stages of production in terms of their pricing – they have different prices, different qualities.”
He explains that Indian manufacturers are still not advanced enough to compete with the Chinese in terms of volumes and pricing. China is way ahead of India when it comes to manufacturing and Chinese companies have the advantage of getting support from the government in terms of tax breaks, he points out.
India is an attractive market for China, despite the challenges that exist in the subcontinent because of poor infrastructure and bureaucractic procedures. India is frequently widely criticised for the complexity which domestic and foreign companies face when doing business in the country. But Mr Modi has promised to reduce bureaucracy and make it much easier to do business in India, as he strives to attract more foreign investment.
There are also valuable lessons that India can learn from China when it comes to its work ethic, Mr Khateeb explains and he hopes that this might rub off on Indians, as the Chinese continue to increase their presence in India.
“India can learn professionalism from China,” he says.
“Their unskilled workers do a job better than our skilled people in terms of the kind of finish they achieve on a product. Their factories open at 8 o’clock in the morning. In India, nothing happens until 10am, 10.30”
business@thenational.ae
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Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
Jawan
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Killing of Qassem Suleimani
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
The five pillars of Islam
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The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Results
7pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (Dirt) 1,600m; Winner: RB Kings Bay, Abdul Aziz Al Balushi (jockey), Helal Al Alawi (trainer)
7.30pm: Maiden (PA) Dh 70,000 (D) 1,600m; Winner: AF Ensito, Fernando Jara, Mohamed Daggash
8pm: Maiden (PA) Dh70,000 (D) 1,400m; Winner: AF Sourouh, Tadhg O’Shea, Ernst Oertel
8.30pm: Maiden (PA) Dh70,000 (D) 1,800m; Winner: Baaher, Fabrice Veron, Eric Lemartinel
9pm: Maiden (PA) Dh70,000 (D) 2,000m; Winner: Mootahady, Antonio Fresu, Eric Lemartinel
9.30pm: Handicap (TB) Dh70,000 (D) 2,000m; Winner: Dubai Canal, Tadhg O’Shea, Satish Seemar
10pm: Al Ain Cup – Prestige (PA) Dh100,000 (D) 2,000m; Winner: Harrab, Bernardo Pinheiro, Majed Al Jahouri
What is an ETF?
An exchange traded fund is a type of investment fund that can be traded quickly and easily, just like stocks and shares. They come with no upfront costs aside from your brokerage's dealing charges and annual fees, which are far lower than on traditional mutual investment funds. Charges are as low as 0.03 per cent on one of the very cheapest (and most popular), Vanguard S&P 500 ETF, with the maximum around 0.75 per cent.
There is no fund manager deciding which stocks and other assets to invest in, instead they passively track their chosen index, country, region or commodity, regardless of whether it goes up or down.
The first ETF was launched as recently as 1993, but the sector boasted $5.78 billion in assets under management at the end of September as inflows hit record highs, according to the latest figures from ETFGI, a leading independent research and consultancy firm.
There are thousands to choose from, with the five largest providers BlackRock’s iShares, Vanguard, State Street Global Advisers, Deutsche Bank X-trackers and Invesco PowerShares.
While the best-known track major indices such as MSCI World, the S&P 500 and FTSE 100, you can also invest in specific countries or regions, large, medium or small companies, government bonds, gold, crude oil, cocoa, water, carbon, cattle, corn futures, currency shifts or even a stock market crash.
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'THE WORST THING YOU CAN EAT'
Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.
Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines:
Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.
Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.
Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.
Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.
Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.