Beijing: It is now India's turn to emerge as the "factory of the world", according to an article in Chinese official media, citing the economic downturn in China forcing companies to turn to India for manufacturing.
Plans by China's phone maker Xiaomi and Taiwan's Foxconn to invest in India point to strong movement of Chinese firms to cash on growing Indian market. Xiaomi Corp. launched its first made-in-India handset a week ago while its Redmi 2 Prime is being assembled by Taiwanese contract manufacturer Foxconn, which has signed an agreement worth USD five billion to expand its R&D facilities in India, the article in Global Times said.
"Recent years have seen an increasing number of discussions about the relationship between China and India, raising questions about whether it is a complementary or a competitive one. Xiaomi's recent moves would suggest that bilateral economic relations are moving toward complementary, it said.
The Modi administration is also trying to clear obstacles within the country, such as relaxing restrictions over foreign investments and knocking down bureaucratic hurdles. All these efforts have smoothed out the connections between the Chinese companies and the Indian market, it added.
"However, in the near future, bilateral economic relations won't be as reciprocal as we might hope. As economic ties strengthen, frictions will increase. "Nonetheless, this is an unavoidable path for an emerging economy hoping to become the factory of the world. China has been there. Now it's India's turn," it said.
As China faces an economic downturn, the question of whether India will replace China as the factory of the world is being debated at length, especially when analysts predict India's economic growth rate will surpass China's in the coming years, the article said. "The real challenge facing both countries is how to turn away from rivalry and focus on their ability to engage in economic transformation via cooperation rather than competition," it said.