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India’s IT investments in China poised to rise
by Jo BlackThe rising Indian IT investments in China are poised to increase substantially in the coming decade and thereafter, as Asia continues to be the dominant force in the world economy and China deepens its engagement with the world economy, Dr. Victor Fung, Vice Chairman, International Chamber of Commerce (ICC) said.
Addressing a ICC India-FICCI meeting on ‘Asia and the Global Economy with specific reference to China’, Dr. Fung, who takes over as President of the world body in mid-June, said, there is an emerging new paradigm of South-South trade and investments that is one of the most exciting phenomena of the 21st century globalising world economy.
He said he would expect the current trend of rising Indian investments in IT in China will not only be sustained, but increase significantly. This may also apply to other services industries.
Dr Fung, is Group Chairman, of the Li & Fung group of companies, which includes major subsidiaries in Trading, Distribution and Retailing, including publicly listed Li & Fung Limited, Integrated Distribution Services Group Limited and Convenience Retail Asia Limited.
He also is Chairman of the Greater Pearl River Delta Business Council, the Hong Kong Airport Authority and the Hong Kong University Council.
Dr Fung said although many Asian economies are confounded by the challenges and threats of the food crisis and environmental issues, the continent will continue to be a major force in the world economy and will generate a great growth and development momentum that should continue for at least the next two to three decades.
This will mean that Asians will be producing more goods and services and will also be increasingly leading innovators.
The high savings rates and balance of trade surpluses to be found in many Asian countries will also provide for considerable accumulation of financial assets, the ICC Vice Chairman said.
Referring specifically to China and the world economy, Dr Fung said, the thought that India has gone from a state of some apprehension about China to a more strategic perception of seeking opportunities.
China, he said, faced many challenges – rising inflation, disparity in incomes, damage to the environment and a weak institutional framework.
However, he said the Chinese Government is acutely aware of these problems.
Contrary to what may be the impression abroad, there is an enormous amount of debate in China on how to address these challenges.
At least so far as the upper reaches of the Government are concerned, the leaders care about their people.
The manner in which the Chinese Government responded to the recent earthquake in Sichuan speaks for itself, Dr Fung pointed out.
He said the key trend to watch for in the decade ahead will be the increased globalisation of the Chinese economy. This, he said, would be manifest in the following ways:
Though China will continue to produce massively, simultaneously more production will more offshore, including to other Asian countries, Africa and Latin America.
Chinese foreign investments in energy and mining will also continue and intensify.
The current trend in respect to Africa, whereby China has become the biggest single investors, whose investments are greater than the combined investments of all OECD countries, will continue.
Similar developments will occur in Latin America, Central Asia and the Middle East.
The fact that Indian businesses are also building up positions in all these regions of the world is a very healthy sign, he said.
A new development, Dr. Fung noted, will be the foreign acquisition of farm land. China has 22% of the world’s population living on 8% of the world’s arable land.
The current food crisis has accentuated the perception of China’s vulnerability.
The Chinese Government has announced that it will be encouraging Chinese investments in agricultural land as a means of securing a more reliable flow of food for the Chinese people, he said.
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