India shoots itself in foot by ousting Chinese investors

By GT staff reporters Source: Global Times Published: 2020/8/6 20:50:57

Tech decoupling with China will leave India more reliant on US

China India Photo:AFP

As India pursues its economic "decoupling" with China by ousting Chinese internet firms, the South Asian country is moving toward a heavier reliance on US tech firms, and its market significance will wane, Chinese analysts said Thursday. 

The comments came as India escalated its banishing of Chinese internet firms, moving Wednesday to block Chinese search engine Baidu and social media platform Weibo, after it banned 59 Chinese apps in June, including the widely popular short-form video platform TikTok.

Alibaba Group's subsidiary UC, which is among the banned, told the Global Times Thursday the company in India is following the process required by the Indian government. 

A person close to Alibaba told the Global Times on condition of anonymity that "running a company does not count on good luck, but down-to-earth efforts to provide good customer value and services."

Baidu refused to comment on the ban. 

Chinese analysts pointed out India's actions have caused it to lose independence in the tech sphere. Shutting the door to Chinese investors will have long-term complications for India, with its value as the world's potential next-billion mobile internet user market shrinking. 

To oust Chinese mobile apps will not be easy for India, with the 59 initially banned Chinese apps accounting for 5 percent of total installations, at 330 million new installations from the Apple App Store and Google Play Store in the quarter ending in June, according to 

Behind those apps, as much as $6 billion worth of Chinese investment was made in India in the last couple of years.

Chinese analysts warned that India's adopting a "decoupling" tactic toward China and the US is to the detriment of its "balance of power" strategy and may prove too risky for the country.

By driving away Chinese players, it will become difficult for India to grow stronger in the technology area because Chinese apps are very innovative in recent years, Liu Dingding, a Beijing-based internet analyst, told the Global Times. 

"By standing against China, India thought it could gain more support from the US government. In reality, it will probably shoot itself in the foot," Liu said. 

He noted one of the reasons was because US apps have displayed less competitive innovation power compared with Chinese apps now.

"In nearly a decade, the architecture of Facebook has not seen any revolutionary changes, but Chinese apps in the past two to three years have experienced tremendous advances with increasing functions emerging, especially Taobao, WeChat and TikTok. It shows that Chinese apps have better innovation power than US apps," Liu said. 

Comparing Facebook and TikTok, Liu noted the US app is being used by some users to savage each other, even to spread racial discrimination and few changes have been made in the past decade. In contrast, TikTok is closer to life as most of the videos are singing and dancing, winning wide recognition among Indian users.

US tech giants have been quick to act to seize on the vacuum left by the ousted Chinese apps. Google and Facebook are reportedly "racing" to invest in India, according to a report by Foreign Policy. 

Google announced a plan to invest $4.5 billion in India's Jio Platforms, the digital arm of Reliance Industries. Facebook also invested $5.7 billion in the company.

Wang Peng, assistant professor of the Gaoli Academy at the Renmin University of China, noted that most US internet companies are taking advantage of India's cheap labor to provide global-concentration services, while Chinese internet companies prefer to hire local Indian employees to provide India-focused services.

"In this aspect, Chinese enterprises can help local employment in India, closing the distance between Chinese enterprises and the Indian market and boosting people-to-people diplomacy," Wang said.


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