How COVID-19 Pandemic Has Benefitted China?
When it is in distress and at the end acquire control over that country if we talk about India then the past couple of months have been difficult for it to like other nations India's economy is also crippled by the covert 19 pandemic Indian stock markets have been witnessing a massive fall since the month of March for example HDFC's share price took a dip of 35% in the span of the first four months of 2020 that is January to April the drop in the share price of many such firms has resulted in decreased valuation now China is seeing it as a marinating opportunity it can buy a lot of firms afternoon evaluation then why would it shy away from the same recently the Central Bank of China bought a one point zero one percent stake in HDFC Bank but after this investment made by China India has become highly alert the Indian government has bought significant changes in the FDI rules well there are a number of reasons for this the first reason being the recession
Which was inevitable due to the lockdown seen companies have been struggling and therefore need good capital to sustain the United States is the country that invests heavily in India but their situation is not very amicable so if Indian firms turn to China for the fund then it can be dangerous according to the changes in FDI rules if countries like China Malaysia or Pakistan have to invest in India then they need to seat the government's approval till now China was able to invest in India on the basis of automated approval here automated approval means there was no need for prior permission of the government before making an investment this made it easy for China to invest heavily in India the second reason for changes in FDI rules is hostile takeovers in a hostile takeover the firms are acquired without the permission for hostile takeover the shares listed on stock exchanges are often bought directly thus when the share price of firms and countries like India takes a massive fall China tries to acquire it by buying its shares but as per the amended FDI rules if countries like China even wish to sell their stakes of Indian firms they need to seek approval of the Indian government a number of Chinese giant firms like Tencent Alibaba and Biden's parent company of tik-tok have already invested in Indian companies an example to coat here is of the Chinese firm fossil that recently acquired gland Pharma the deal was inked by the acquisition of 74 percent stake of gland pharma for about 7,000 to roars there are a total of 31 unicorns in India present unicorns are those startups that have a valuation of 1 billion dollars or more which is approximately 7,000 thor's now out of these 31 unicorns China has invested in 18 of them Chinese companies have been heavily investing in Indian tech firms and over the recent years investment bucket has grown significantly Alibaba owns around 23 percent stake in Zomato other notable investments of Alibaba include big basket Snapdeal patreon patreon Mall Express peace Tencent is another Chinese giant that has invested in Indian firms like MX player kata book Iran by juice Ola shrieky gana dream 11 new high practice etc Charlie some things are not just investing in technology related startups they have a broad and diverse portfolio of investment for instance the parent company of tik tok by dance has invested 25 million dollars in daily hunt which is a news aggregator app delivery and x'q have received investment from forsen in the automobile sector mg Motors
Which is basically a Chinese automobile company is steadily expanding its business in India Indians are well aware of the two faces of Chinese companies this is the reason that Chinese firms use backdoor to enter into the Indian markets what is the back door you ask Chinese companies have all the money resources expertise to open the branch or companies and India directly but yet they don't they always marked a foothold in India by investing in Indian companies and owning a substantial part of it thus entering through the back channel so that Indians don't feel that they are using Chinese apps or products directly ultimately these Chinese companies fulfill their agenda for example biden's has a news aggregator company tokyo in china it is one of the most popular news aggregator apps their chinese firms played it smart launched out you in India instead they bought steaks in India news aggregator at daily hunt similarly Alibaba own teaming formerly known as Sal bomb on a popular marketplace in China and instead of launched multi mall in India directly Alibaba invested in PT m1 to venture into the Indian online market if we talk about China's investment capacity then it has around three trillion dollars as foreign exchange reserves which converge to a whopping amount of rupees 228 lat roars now you can imagine how easily China can use this capital especially during this time when markets have taken a hit and the companies are in dire need of investments Chinese companies are often accused of sharing their data with the Chinese government and the same risk is clouding India to take the case of who are we are telecommunication instrument and electronic equipment company it has been accused by the United States and several other countries of sharing data with the Chinese government as a result it has been banned in several countries like the USA Japan and Australia etc
Canada's military has also requested its government to block worry sadly India has not taken any decision as of yet we are not new to the lack of transparency that China the Chinese company and China's government has known for the coronavirus has exposed this to the entire world as well this has led to not only India but other countries also to be on alert European countries like France Spain and Germany all are going through a major economic crisis which has led to companies like Nokia Ericsson seen a steep dip in the evaluation to prevent any hostile takeover by a Chinese company European countries like Spain Italy and Germany are making changes in the FDI rules the trade war between the US and China has been going on for more than months now recently when a Chinese company tried to acquire a semiconductor company from the US the US government intervened and block the deal there is also fear that China may become the number one superpower replacing the US if that happens they would bully smaller and weaker countries at the same time execute many of their agendas China knows that countries like India and many other European countries can survive without Chinese capital so they are placing the bet on poor countries like those in the African continent who might not be able to resist the temptation of money that Chinese companies Offer more so at this time when the corona virus pandemic is creating havoc in every country's economy China is waiting for the right opportunity so that these poor countries are in total grip of Corona and they can pound on like a high now on these countries China has been investing aggressively in African countries for many years it is the largest trading power in the world last year it did a trade of roughly around four point four three trillion dollars whereas the u.s. did a trade off about three point eight nine trillion dollars to increase the strain China is I'm on African countries from FAC their strategy is very simple with developing nations like Africa or Pakistan they assist them in infrastructure projects like building roads railways and ports etc these countries become happy that they've got a good development partner whenever the need for money arises China consistently provides a loan to them thus trapping them under the feet of debt initially these countries do not understand that all the infrastructure projects are being made so that the Chinese can sell their products in the country and they can transport their product more easily to other countries when these poor countries are under China's debt it twists their arm and makes them do whatever it wants a similar thing China is doing in Pakistan it is find the vast natural resources of that country and selling Chinese products
What extent can China misuse and blackmail these countries is proved by what it is doing in Pakistan that the covert 19 vachs testing now we all know that medicines are not directly rolled out in the market they are tested thoroughly on humans for a long time before being introduced commercially now kovat 19 vaccine also needs to be tested on humans but if China does the testing on its own people and anything goes wrong there will be approved within China as a result the ruling party could be in danger to solve that they use some Pakistani nationals to run these testings on and if there is any problem or anyone dies Pakistan won't bring it out in the open this is because Pakistan has its own political and commercial interest with China many Chinese some things like Oppo vivo mi are doing great business all around the world if we talk about India tick tock is one of the most popular apps in India right now tick tocks parent company by dance has recently launched a new app hello which is also doing great in the Indian market companies like VEVO Oppo mi have around more than 50% market share in the smartphone segment people do not understand that the data is the new currency and we won't even know when these companies start sharing data like behavioral patterns with the Chinese government in China even if a journalist questions the ruling government they are arrested under suspicious charges and put in jail these Chinese companies are operating in the country so naturally they bow down to any demands put up by the Chinese government we Indians need to boycott these apps and companies but this won't happen in a minute or a month remember rome wasn't built in a day Indians need to work collectively and investor capital in the market whenever an Indian company raises money it does so with the help of foreign investors venture capitalists hedge fund private equity funds it has to look outside the country for the fund because most of the Indians keep their savings in the form of cash or invest them in gold or silver the funds raised by Indian startups are mostly by the foreign investors of the United State so China if every Indian invests per month just a fraction say five to ten percent of his or her savings these companies won't feel the need for foreign money every crisis is an opportunity waiting to be grasped and a coronavirus crisis is no exception the coronavirus has exposed China completely and many foreign companies want to get out of China and minimize their business relations with it this has resulted in a huge opportunity for India's manufacturing sector it can show itself as a solution to the problem that companies are facing with regard to China Japan is offering its companies 2.2 billion dollars or 20,000 kuroh package so that they take an exit from China
Currently in India they are 1441 Japanese companies most of them are based in Bengaluru the Indian government has also announced to give quick permission to these manufacturing companies if this happens then there'll be a huge job opportunity for the youth and many people might start their own business and manufacturing right now if there's an opportunity for jobs in business it is in the manufacturing sector we know that an idea outsourcing India has taken the lead among the world Tata Consultancy Services TCS which is the second largest company in India only this IT outsourcing work meaning it takes IT projects of companies based in foreign countries about 20-25 years back an IT boon locked the gates of India it was after this that India gradually secured a powerful position in the IT sector a similar boom is happening in the manufacturing sector of the country the advantage that India has is the availability of manpower which is in abundance we can provide a similar facility to foreign companies that China provided them to set up the manufacturing unit if this happens more and more companies will come to India we need to capitalize this opportunity with both if not done so we will be losing out on a lot