Illustration: Liu Rui

In September last year, during Chinese President Xi Jinping's state visit to India, an agreement to establish Chinese industrial parks in India was signed. Recently, the program has once again been in the spotlight after Secretary General of the Associated Chambers of Commerce of India D. S. Rawat proposed setting up a "Chinese Manufacturing Zone" in Uttar Pradesh state.

According to Rawat, there are around 50 Chinese companies that are interested in investing in the state. "If the government provides land and some rebate in taxes to these willing companies, then they will create a zone on their own … The Chinese companies will develop their own townships, including school, hospital and other amenities," he said, noting that if the program is successful, it will provide 30,000 to 40,000 jobs for local residents and the image of Uttar Pradesh will be improved not only in India, but worldwide.

Not surprisingly, the prospects of such cooperation are appealing. Establishing Chinese industrial parks or manufacturing zones could serve as a perfect match of both countries' interests and needs.

For one thing, India has just declared a mega-plan for increasing spending on infrastructure. It is thus keen for investments. China, in the meantime, is awash with funds, experience and spare capacity. A large number of Chinese enterprises, including small- and medium-sized companies, are seeking chances to go global.

If this proposal is to be implemented, Chinese manufacturing will embrace a vast overseas market, while India could learn from Chinese experience of improving infrastructure with more direct means. The project will also meet the rapidly increasing market demands of India.

In addition, India's growing trade deficit with China, which has soared to nearly $40 billion in 2014, is worrying New Delhi. Inviting Chinese firms to build manufacturing plants in India, producing goods on its own land rather than importing commodities from China, is therefore a promising opportunity to bridge the deficit between the two countries.

China and India are emerging powers with a burgeoning position in the global economic structure. However, bilateral trade is far below its potential. Even though the Sino-Indian trade volume exceeded $65 billion for the first time in 2013, almost 10 times that of 10 years ago; still, compared with the $520 billion of Sino-US trade volume in the same year, this is hardly a large amount. From 2000 to 2014, Chinese investments in India totaled $400 million, which accounted for only 0.18 percent of entire foreign direct investments in India, according to a Bloomberg report in 2014.

Yet Indians are experiencing mixed feelings over the project. For some time, the discussion about Chinese industrial parks has caused controversies over land acquisition, environmental pollution, whether it will crush its national industry, and whether those Chinese firms will bring their own workers to the country, instead of providing employment to the local people.

These are not only challenges to Sino-Indian cooperation, but common problems that China faces in implementing its "going global" strategy. China encourages such investments in other countries and areas, but it should realize that the investments are aimed at long-term collaboration, not a quick profit. Therefore, in the face of certain concerns and worries, we should encourage initiative and responsibility so that firms can figure out, respect and abide by the culture, customs, and laws of our partner countries, in order to solve problems through proper communication with local governments.

If Chinese manufacturing zone or industrial parks can develop smoothly, the considerable win-win results would set up an example for all the joint programs among developing countries, and eventually create a virtuous cycle of mutually beneficial cooperation.

The article was compiled by Global Times reporter Li Aixin based on an interview with Zhao Gancheng, director of South Asia Studies at the Shanghai Institute for International Studies. liaixin@globaltimes.com.cn