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The reasons for Modi's frequent targeting of Chinese companies and raids can be attributed to the following.
(1) Money laundering
India's Enforcement Directorate recently conducted raids at 19 locations to investigate whether businesses linked to Chinese people were suspected of money laundering. According to India's Enforcement Directorate, the Chinese have established a network of fintech and non-bank entities in India and are working with local professionals to provide short-term loans with high interest rates through mobile apps. In December, India's Enforcement Directorate arrested senior employees and advisers at the Indian branch of Chinese smartphone maker Vivo on suspicion of money laundering, but the court eventually reversed the arrest.
The investigation of money laundering by law enforcement agencies can be understood as a requirement to ensure the legal operation of foreign-funded enterprises, but there may be politicized elements in the implementation process.
(2) Competition in high-tech industries and information technology
Competition between the two economic powers, China and India, is inevitable, and India is likely to take tougher repressive measures against Chinese telecommunications companies and other manufacturing industries. The focus of competition has shifted to high-tech industries and information technology, so India's crackdown on China is particularly severe.
(3) Border disputes
The border dispute between China and India may be one of the reasons why India is targeting Chinese companies. Since India is unable to bargain with China on border issues, it has turned its attention to Chinese companies investing in India, trying to gain some leverage in border disputes by controlling these companies.
(4) Strategic support and manufacturing development
India hopes to develop its manufacturing sector with the support of countries such as the United States, Japan and Europe, and to take some export-oriented industries from China to act as a "bellwether" in the Global South. By imposing fines on foreign companies, India is trying to attract foreign investment and improve the competitiveness of its manufacturing sector.
First, the gradual politicization of India's actions has created uncertainty, with implications for Chinese companies not only at the economic level, but also in the areas of justice and the rule of law. For example, the investigation of vivo India shows India's tendency to politicize judicial tools.
Second, India's reasons for targeting Chinese companies are related to competition between China and India, border disputes, and India's own strategic calculations. Under pressure from competition in manufacturing and high-tech industries, India may leverage external support to try to gain a competitive advantage in these areas.
Finally, India's actions could have a negative impact on India itself. It will not only affect the inflow of foreign capital from China, but also make other international capital take a wait-and-see attitude towards India. According to the data, from 2014 to 2021, nearly 2,800 foreign companies registered in India terminated their operations in India, and the instability of India's ** policy has become an obstacle to foreign investment.
India's frequent raids on Chinese-funded companies in China have indeed raised many questions and controversies. From money laundering issues to competitive pressures to strategic considerations, a variety of factors are intertwined to make up the current situation. For Chinese companies, this is a serious challenge that needs to be tackled seriously.
However, we cannot simply attribute India's actions to hostility or pressure against Chinese companies. In fact, China and India also cooperate in the economic and ** fields, especially in the Belt and Road Initiative and ** linkages. Therefore, we should maintain a calm and objective attitude, continue to promote the cooperation mechanism, and properly handle the interests of both sides.
At the same time, Chinese enterprises also need to strengthen risk management and compliance management to ensure legal and compliant operations. This includes complying with Indian laws and regulations, maintaining good relations with local** and communities, and building a sustainable corporate image.
Finally, economic competition not only between China and India, but also on a global scale is full of challenges and opportunities. As a Chinese-funded enterprise, it is necessary to maintain a clear mind and keen insight, flexibly respond to various changes and situations, and achieve sustainable development and long-term stability.
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