India-China production capacity ties don’t mean exporting Chinese polluting industries.

India may need to carefully think about whether it wants to resist or embrace the migration of China's production capacity, which allegedly involves some investment in heavy polluting industries.

China's leading train maker China Railway Rolling Stock (CRRC) Corporation Ltd announced over the weekend that it had started operations at its first joint venture plant in India. The move is hailed by some media as an opportunity for creating jobs for local people, but some Chinese netizens are not optimistic about China's increasing manufacturing investment in India, with one netizen suggesting that China's efforts could, on the contrary, receive a cold shoulder from India.Not many netizens are rational economists, but chatter on the Internet does sometimes display a viewpoint that may circulate within Chinese society and influence investors.

According to Xinhua news agency, CRRC is the first foreign company to set up an assembly line for rail transportation equipment in India since Prime Minister Narendra Modi unveiled his ambitious "Make in India" campaign in 2014. This partnership is hardly surprising seeing as India has one of the world's largest railway network, creating a huge demand for engines and other railway equipment, while China's train makers have an advanced production capacity and have been actively looking for cooperation ties in the world. What is odd is that the cooperation between the two countries has only just now come about.

At a time when China's manufacturing sectors are battling overcapacity, concerns have been expressed that the country might be using outbound investment and international industrial cooperation to simply move its outdated capacity abroad. There have been some obstacles restricting Chinese enterprises' access into India, where some people worry that boosting India-China production capacity ties may also bring heavy polluting production into the country. But these concerns are unfounded. The venture plant in India will transform CRRC from a company that exports equipment to one that exports advanced production technology that includes more clean and green methods. Further, this move will boost India's rail system and drive tax revenue for the local economy.

In fact, a considerable part of China's excess production capacity could be conductive in boosting the local economy if they can be transported to India. A large number of Chinese manufacturers have acquired far more advanced technology than some local Indian firms despite those Chinese enterprises suffered problems of overcapacity domestically.

India may want to consider offering more opportunities for Chinese manufacturers to invest in the country as both countries could enjoy great potential in production capacity cooperation.

Source : globaltimes.cn