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Two years ago, Indian Industries were afraid of competition by Chinese industries. At that time, Indian Industry was looking at China as a bulldozer exporter of goods at a very low price by making huge investment. There was a (mis)understanding among Indian industry that the standard of Chinese goods is very low and hence there was no scope for the high standard Indian goods in China. Now the picture has changed. In 1992, India-China Bilateral trade was only 338.5 m USD. In 2002, it has increased by 15 times and became 4945.9 m USD. More than 50 Indian Companies who have entered China has come together and lunched a 'India Club' in Shanghai.
Bharat Forge of Kalyani industrial group exports Rs 40 crore worth of crank shafts to two prominent truck producers in China. The annual market of trucks in Chine is 3 lakh trucks. China has accepted the Euro's Standards about Pollution control and Efficiency. Because, Bharat Forge was supplying its goods to Kaiser, Renaud and Piomio(?), it was easy for it to enter China. Bharat Forge is now aiming to take over 60 % of the Chinese market of crankshafts.
Reliance group supplies China plastic granules worth 10 lakh dollars. Indian Steel Authority supplies 10,000 tonnes Hot Rolled Coils to China. Besides, that authority supplies China 1,920 tonne stainless steel slabs. Ispat Company imports every year 10m lakh tonne Coke for its plant at Dolvi in Raigad (Maharashtra) District. Now that company supplies every year 20,000 tonnes Hot Rolled Coils and Galvanised Iron. It supplies 50% its exports only to China. Its four high level officers are camping in Beijing and are co-ordinating with the customers.
Work is going on war footing for the Olympic Games in 2008 scheduled to he held in China and hence its demand for steel is increasing at the rate of 20%. Ispat has planned to take full advantage of this need.
Indo-Rama Synthetics has started exporting cloth to China. Mamata Group exports Machine Tools to China. Besides, many Indian Companies manufacture their goods there only to take advantage of low production cost and export them. There are six reasons for the low cost of production. (1) Indirect taxation in china is 14 to 16% less than India. (2) Interest rate on Capital is 3 to 4 % less than India. (3) Productivity of capital is more than India by 2 to 3 %. (4) Wages to the workers is less by 2 per cent than India. However, it is compulsory to pay full salary to the workers on the a fixed day of the month. There is a clear provision of sentencing the owner who does not pay the wages in time for two years' RI. However, the owners are free to close down the industry after paying the requisite compensation. No litigation is allowed in that respect. (5) Productivity of the workers is 2 to 5 % more than Indian workers. Producers can charge a margin of 4 to 6 per cent only and retailers can charge 1 per cent only. (6) In a joint survey by Confederation of Indian Industries and Mackinzi (?), it is found that if the standard is kept identical, the goods which will cost Rs.100/- in India, can be produced in China for Rs.68 to Rs.72/- only.
Taking advantage of this factor, Indian companies Videocon and Onida get their loose parts manufactured in China. Tube Investments Company imports Aluminium Tubes for Cycle and frames. Nitco Company imports ceramic tiles from China. Apollo Tyres exported tyres worth Rs.50 crores from China. This year that company's target is Rs.80 crores. J.K. Tyres transacted a business of Rs.80 crores from China. Ages Safety Company of Kolhapur imports 85% of its goods from its plant in China in its production of 60 lakh dollars. It exports 50 lakh dollars worth of safety gloves to Japan.
Indian State Bank, ICICI Bank, Bank of India and Bank of Baroda these four Banks have started functioning in China. Tata Consultancy Services Satyam, Polaris, Mascot and BFL Emphasis have opened development centres in China. New softwares are developed there. N.I.I.T. has 112 training centres and 20,000 students are getting training there.
Tata Consultancy Services supplies all the softwares to the American giant company - General Electric from its development centre in China. Excel Packaging has invested 4 crore dollars in its in 4 plants. 70 per cent of the market of Lamyubes(?) market has been acquired by this company. Sundaram Fasteners have nearly invaded China. Aditya Birla Group has invested 40 crore rupees in the factory manufacturing 'Carbon Black' (important component in manufacture of tyres) and taken over its ownership.
No phosphorous is found in India. Indian phosphorous industry imports phosphoric acid in the special stainless steel ship. There is not a single ship of this type of Indian ownership. The Agro-chemical company United Phosphorous exported 50 to 60 lakh dollars worth of goods to other countries from China and exported 5 lakh dollar worth insecticides from India.
Many other examples of this type
can be cited. In conclusion, the phobia of the import of Chinese
goods has proved to be imaginary and in reality, Indian Industry has planted
its foot with confidence in China and marching ahead with vigour. Hence,
it is time to plan to conquer the Chinese market in a honourable way and
with a daring spirit.
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