Distrust of China not limited to telecom

The government’s displeasure over the use of Chinese telecom major Huawei’s equipment by Indian service providers is not a lone case of mistrust of the neighbouring nation.

This lack of faith in anything Chinese is evident in sectors such as aviation and shipping, too. And there are many instances of the government frowning over Chinese companies’ attempts to make inroads into India in these areas.

In telecom, Huawei’s compatriot ZTE is also in the dock. Though ZTE is planning to launch an India Engineering Centre in Gurgaon this week, it continues to be under scrutiny over security related issues.

In fact, all telecom service providers have been told in no uncertain terms by the government about not procuring equipment from Chinese vendors.

To showcase its seriousness about India, Huawei is learnt to be intensifying its investment plans for India. The company sought appointments with several government officials last week to clear the air, but hasn’t been granted any meeting till now.

According to grapevine, the establishment is keen to keep the Chinese out, at least in sensitive sectors. “Around 10-15 Chinese companies from across sectors are waiting for government approval for entry into India. Very few among them are big brands,” sources said.

Take the case of Hong Kong-based Hutchison Port Holdings, which had bid for contracts to build container terminals at Mumbai and Chennai for Rs 1,200 crore and Rs 494 crore, respectively in 2005. But the company never received security clearance and this delay put a lid on future Chinese participation in 13 ports across India with investment potential of Rs 60,000 crore.

On its part, the government obviously brushes aside any discrimination against Chinese companies. Home secretary G K Pillai has said, “Chinese companies are already present in India in a big way. They are working in a variety of sectors, including in telecommunications sector. I don’t think there is any discrimination happening from the government’s side.”

Trade between India and China is pegged at around $38 billion.
In the automobile sector, Chinese car maker Cherry Automobiles has been circling the Indian market but has been unable to forge a partnership here — whether any eventual venture by Cherry faces government scrutiny remains to be seen. But in this sector at least, security concerns for the Chinese appear to be much less.

Recently, General Motors India was restructured and brought under a 50:50 joint venture between the American company and Chinese partner SAIC. Already, several people from the Chinese partner have come down to India and begun work to ultimately launch light commercial vehicles — this JV did not face any delay despite widespread concerns to the contrary. 

Experts give different opinions on the Chinese conundrum. An expert from Infrastructure and Logistics Federation of India says, “Security concerns are inextricably intertwined in infrastructure projects. What we need to promote investments in Infrastructure projects is not the dilution of the security concerns but a clearer amplification of security policy and enunciation of dos and don’ts.”
But a senior partner with a prominent consulting firm justified the concerns and said the Chinese influence is being limited in core infrastructure sectors.

“It seems like they have genuine concerns. According to our information, the government is also looking at power sector to reduce the Chinese influence. Here, however, it seems to be taking the form of visas for Chinese engineers working on Indian power projects being harder to come by, rather than a ban on importing equipment,” he said.