Chinese company abandons US$330 million investment plan in India Indian media: This is India’s loss

Multiple Indian media recently reported that Apple’s Chinese supplier Luxshare Precision changed its previous investment plan of US$330 million and gave up investing in building a factory in India. “This is India’s loss.”

Luxshare Precision Company was founded in 2004 and is headquartered in Dongguan City, Guangdong Province. It is called the “King of Apple OEMs” by some media and is one of the three major assemblers of Apple mobile phones. According to Indian media reports, in the past three years, Luxshare Precision has made many attempts to expand its business in India, but the progress has not been smooth. In 2019, Luxshare Precision set up an office in India and planned to acquire a defunct digital product manufacturer located in Tamil Nadu, southern India. Luxshare Precision plans to invest 7.5 billion rupees (approximately HK$706 million) in it to produce components for Apple mobile phones. However, foreign direct investment (FDI) approval for the project has been delayed. Luxshare executives have been repeatedly denied visas to India, according to sources familiar with developments on the project. In early 2023, Bloomberg reported that India had initially approved about 14 Apple suppliers from China to invest in India, including Luxshare Precision, Sunny Optical, etc. The prerequisite for India’s approval of these companies is that they must all be joint ventures. However, the above-mentioned preliminary approval from the Indian government has not provided real help for Chinese companies to settle in India. On November 9, the Bac Giang Province Industrial Park Management Committee of Vietnam announced that Luxshare Precision will invest an additional US$330 million in the province to build new production facilities. India’s “Business Standard” said that Chinese companies’ change of plans is India’s loss and Vietnam’s gain. The report also mentioned that India-China relations are tense.

In 2022, BYD, another major supplier of Apple in China, also tried to expand its business in India, but suffered the same fate as Luxshare Precision. BYD tried to set up an iPad assembly line in India in February 2021, and had previously tried to participate in India’s incentives for smartphone production. However, as the relationship between the two countries changed, the Chinese company was rejected when India tried to expand its business. Finally, BYD announced in May 2023 that it would shift its investment in India to Vietnam, planning to invest US$183.7 million in production. Electronic component.

Liu Zongyi, Secretary-General of the China and South Asia Research Center of the Shanghai Institute of International Studies, said in an interview with a reporter from the Global Times on the 19th that the withdrawal of Luxshare Precision reflects the many difficulties and obstacles that this Chinese company has encountered in India for many years. The subsequent “painful” decision will have a certain impact on other companies in the Apple industrial manufacturing chain, as well as other manufacturers in the Apple mobile phone supply chain in India. This case also illustrates that some international investors still lack understanding of the Indian market. “Currently, India still has many obstacles in place for foreign investors. Especially for Chinese companies, the various repressive measures taken by India have affected the investment confidence of Chinese companies.”

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On the eve of the inauguration of the new president of the Maldives, the US media once again hyped that “the Maldives is becoming a microcosm of the struggle between China and India in the Indian Ocean.”

The Wall Street Journal recently published an article claiming that China has provided the Maldives with a large amount of loans for infrastructure construction. These loans have provided funds for new high-rise buildings, roads and a landmark bridge on an artificial island. In order to counter China’s influence, India is also increasing financial assistance to neighboring countries such as the Maldives.

Loans and grants from India are reportedly supporting a $500 million bridge project linking three islands to the Maldivian capital Male.

In response, an Indian official with direct knowledge of the situation put it bluntly: “This is our response to China.”

The US$500 million project mentioned by the Wall Street Journal refers to the “Greater Male Connectivity” project officially launched by India and the Maldives in August this year. India provides financial assistance for the project, including a $400 million credit line and a $100 million grant. The project includes the construction of a bridge and causeway spanning 6.7 kilometers to connect Male to three neighboring islands – Villingili, Gulhifalhu and Thilafushi connect them.

By the way, there have actually been many collapse accidents of bridges under construction in India this year. For example, just three weeks after the Agwani-Sultanganj Bridge collapsed in early June, another bridge under construction costing tens of billions of rupees in Bihar, India, partially collapsed. Statistics show that more than 10 bridges have collapsed in Bihar in the past three years, raising concerns about the quality of local construction projects.

Despite this, India is still vigorously investing in various infrastructure areas, including bridges. India’s “Economic Times” stated in an article published on November 8 that the Export-Import Bank owned by the Indian government is responsible for providing credit lines for infrastructure and development projects to India’s neighboring countries and overseas friendly countries. Currently, the bank is providing credit lines to the Maldives. The exposure is approximately $1.4 billion. India is participating in several development projects in the Maldives, such as the development of Gan International Airport, Hanima Abdul International Airport, and the development of Gulhifalhu Port.

Derek Grossman, a defense analyst for the Indo-Pacific region at the Rand Corporation, a US think tank, said: “India has been trying to maintain close relations with its neighbors except Pakistan to counter China, and has proposed its own access mechanism and Develop agreements to reduce China’s influence.”

In addition to the Maldives, India has also left its footprints in many countries in South Asia: In Myanmar, a container port built with India’s assistance began operations in May this year; in Bhutan, both parties agreed to invest in new railway projects to support Bhutan’s upgrade of its ties with India. Infrastructure in border areas; in Sri Lanka, Indian companies are using US financing to develop deep-water terminals; in Bangladesh, India has joined the Japanese-led Bangladesh’s first deep-water port construction project.

When describing India’s ambitious aid plan, the “Wall Street Journal” also mentioned that the appointment of the new Maldives President Muiz, who is considered “pro-China”, is a setback for India’s efforts.

Muiz said in an interview late last month that the Maldives intends to achieve “complete independence” and that the Maldives has begun negotiations with India to withdraw its military personnel. But he added that asking India to withdraw its troops would in no way mean that troops from China and other countries would enter the Maldives.

On November 18, when the new President Muiz of the Maldives met with State Councilor Chen Yiqin, who attended the inauguration ceremony of President Xi Jinping as the special envoy of President Xi Jinping, he said that the new government of the Maldives firmly adheres to the one-China principle and is actively committed to strengthening cooperation with China. In jointly building the Belt and Road Initiative and practical cooperation in various fields, we look forward to working with China to open a new chapter in Malaysia-China relations.

Being keen on exaggerating confrontation rather than emphasizing cooperation is actually a “special skill” of the Western media, especially in China-related fields, which reflects its inherent thinking and bias.

In fact, regarding related topics that Western media are keen to hype, Chinese Foreign Ministry spokesperson Wang Wenbin once clearly pointed out that China believes that there is broad space for cooperation in the field of global infrastructure, and that various related initiatives do not compete with each other or replace each other. What the world needs is building bridges, not tearing them down; interconnection, not decoupling and building walls; and mutual benefit and win-win, not isolation and exclusion. China welcomes all initiatives that can help bring together forces and promote global infrastructure construction. Any calculation to advance geopolitics under the guise of infrastructure construction is unpopular and will not succeed.