Chennai, a ripe market for Chinese investors

Rekindling the ancient ties is mutually beneficial as China wants newer markets while Tamil Nadu needs investments.
Chennai, a ripe market for Chinese investors

Chennai

The city has always been a frontrunner when it comes to attracting foreign investments. Global brands like BMW, Nokia, Hyundai, Ford, Samsung and Dell flagged off their presence in India via Chennai. The southern metro has a rich history of bagging big-ticket investments turning it into an investor-friendly destination. Not surprisingly, even China has made substantial efforts to seek out business opportunities in the city. Take the case of Huawei, Byd and Luxshare, among others that have cumulatively committed investments worth $300 million (Rs 2,000 crore) in Chennai’s industrial corridors.

The timeline of drawing investors from the neighbouring superpower harks back to 2005, when the first delegation from Chennai made inroads into China. A three-member team, including the then Chairman of SIPCOT, went to China to scout for business, a source told DT Next.

Typically, these were three to four-day trips with the exception of a five-day tour, during the days prior to clinching the Nokia deal. “A series of exhaustive meetings took place before the Finnish project (worth Rs 1,800 crore) was signed. The company had asked the team to visit their regional headquarters in Beijing, where meetings with its suppliers ofelectronics components were held,” the source said, noting that language was the only barrier then.

Things have changed with subsequent meetings held by delegates from Chennai in the run-up to the Global Investor Meets, where PPTs were being created entirely in Mandarin. Brochures, books and other relevant materials were printed in the Chinese language so that communication was easy for those keen on doing business, said the source. The Chennai contingent organised about seven to eight seminars in Shanghai and Beijing, involving 350 participants,during the period when Tamil Nadu showcased its investment climate to China.

Such focused jaunts have reaped rich dividends with Chennai attracting five to six large-sized enterprises from China, including Luxshare that has invested $200 mn. From manufacturers of tyre moulds in Maraimalai Nagar to electronic hardware and medical companies like Tianjin or even players in the solar products, battery/cell and renewable energy ecosystem, the investment trickle has created a wellspring of opportunity for Tamil Nadu Inc. In the absence of factories, some companies have also set up their representative or marketing offices in the city.

Leather industry veteran Rafeeque Ahmed, who is the Chairman of the Farida Group, is upbeat about the visit of Chinese President Xi Jinping to India, and Chennai, in particular. “The trade balance is against us and we have sought the concessional duty issue to be addressed. Reducing tariff and matching concessions would give us a level playing field,” he said, noting that his company employs 60 people in the design development centre, which became operational last year, in China. “It is a full-fledged design centre for footwear, and the only one from Tamil Nadu that caters to the US market,” he added.

Earlier this year, over 70 companies involved in the manufacturing of medical instruments from Zhejiang Province in China showcased their high-tech instruments at the Medicall 2019. Zhu Q, President, Zhejiang Zhongzhe International Exhibition Commerce Co Ltd, had said in June, “We are keen on encouraging trade between India and China. And this conference will help improve cooperation between the countries that will be mutually beneficial for the healthcaredomain. We offer an opportunity to Indian traders to witness and interact with the best of Chinese medical equipment manufacturers.”

Every visit has been fruitful, said the source, who added, “They want newer markets; we need investments. There is enormous scope in manufacturing for renewable energy, electronic hardware components, automobiles and auto components. We need to be on par on the EV front and the signs are encouraging. Chinese companies are strong in EV battery space, which Chennai to capitalise on.”

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