Source: wechat official account: Bu Yidao has been authorized to reprint
Pen / Sword smile & Sister Daodao
More than 500 Chinese enterprises in India are under investigation by Indian law enforcement authorities.
The latest news from Bloomberg revealed that after the “surprise tax investigation” of Xiaomi and Huawei, the Indian government’s review of Chinese enterprises in the past two years has not stopped, but has expanded to an astonishing scale.
After Chinese mobile phone users and relevant industry institutions in India were puzzled and even criticized directly, New Delhi still insisted on “treating Chinese enterprises differently”. In addition, hundreds of Chinese apps have been removed from the shelves before, and a series of actions have been taken together, adding to the widespread doubts that New Delhi deliberately targets Chinese enterprises.
In the name of law enforcement, India practices administrative governance, but this is obviously a prison.
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The Bloomberg reporter of the United States quoted relevant documents obtained from the Indian Department of enterprise affairs to disclose the extent of the current “expanded version” review of Chinese enterprises in India.
Vivo and ZTE have both entered the “blacklist” of New Delhi this time.
According to the document, the Indian Enterprise Affairs Department launched an investigation on vivo as early as April to verify whether there were any major violations in the ownership structure and financial reporting, and also to review the accounts of ZTE in India.
Why are these actions suddenly launched?
The statement in the document is that there are “anonymous sources” reporting that relevant Chinese enterprises may have “financial fraud” and other violations.
At present, the specific contents and results of the vivo and ZTE surveys have not been released. However, an “anonymous report” and a large-scale investigation by the Indian Ministry of enterprise affairs have “successfully” achieved the “stigmatization” of Chinese enterprises in India.
In addition to these two companies, Chinese enterprises such as Xiaomi, oppo, Huawei and Alibaba that conduct business in India are also among the “more than 500” investigated. They were asked to provide details of the company’s directors, major shareholders, beneficiaries and ownership structure.
According to an insider, the relevant report may be released in July. The investigation results will also determine whether the relevant “case” will be transferred to the law enforcement department “specially responsible for serious commercial fraud” for further processing.
As soon as the news about vivo and ZTE being investigated in India came out, the media immediately thought of a series of experiences of Xiaomi in India in the past two years.
According to the timeline, Xiaomi India Company was involved in the “tax investigation storm” set off by the Indian Finance and taxation department for a long time:
Last December, Indian tax authorities raided the offices and manufacturing plants of Chinese mobile phone brands such as Xiaomi and oppo in India.
In January this year, the Indian Ministry of Finance announced that it would recover taxes of up to 6.5 billion rupees from Xiaomi India, because the royalties and patent licensing fees paid by the company to Qualcomm and Xiaomi mobile software were not included in the transaction value of its imported goods.
Last month, the action of the Indian law enforcement agencies was upgraded, and the funds of about 55.5 billion rupees (about 4.8 billion yuan) were frozen directly on the ground that Xiaomi was suspected of violating the Indian foreign exchange management law.
At that time, it was said that Xiaomi would not be the last Chinese enterprise to suffer this in India.
The news that more than 500 Chinese enterprises in India were under review came out before the words were heard.
Whether the investigation is expanded on the grounds of “tax investigation” or “improper financial behavior”, does the Indian law enforcement authorities aim at the black hand of Indian and Chinese enterprises?
After the conflict between China and India in the calawan Valley in 2020, India successively removed more than 200 Chinese apps from the shelves and began to strengthen the “legal compliance investigation” of Chinese enterprises in India. At that time, it had aroused widespread doubts and criticism about the politicization of New Delhi.
The current wave of surveys on Chinese enterprises still does not get rid of this color.
Data show that Chinese mobile phone manufacturers firmly occupy the Indian market. In addition to Xiaomi ranking first in the volume of printed goods, vivo, realm and oppo ranked third, fourth and fifth respectively. Four Chinese companies accounted for about 65% of Indian mobile phone market shipments last year.
However, it was found that when all these Chinese mobile phone manufacturers entered the “observation line” of India, Samsung, which ranked second, did not enter the investigation list.
Chinese enterprises in India have been subjected to such “special treatment”, which makes people feel that Indian law enforcement departments are specifically targeting them.
Seeing that Chinese companies such as Xiaomi, vivo and ZTE are so challenged, other technology giants can’t stand it.
Bloomberg reported on May 31 that a lobbying group called “Indian mobile phone and electronic products association” wrote to relevant Indian government departments the day before yesterday, accusing the country of “lack of understanding” of the royalty mechanism in the technology industry.
Members of this group include apple, Xiaomi, oppo and some local technology giants in India. Although the letter did not directly name the case of Xiaomi, it pointed out that this practice of the Indian law enforcement authorities may lead to a “chilling effect” for enterprises in relevant fields.
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Over the past two years or so, India’s attitude towards Chinese enterprises has shown obvious reversals.
In 2020, the border friction led to the sharp deterioration of China India relations. The Indian government began to try to restrict China’s investment in its sensitive companies and industries. After that, it successively banned more than 200 applications from China and conducted additional reviews on China’s commodity imports.
By march2021, China India relations will ease to a certain extent, and Indian officials also say that they can “selectively consider Chinese investment”. When the Sino Indian border talks reached an impasse again in the second half of the year, the wind changed again. New Delhi launched “tax raid” and other actions, sending out information such as “tax evasion”, “fraud” and “profit theft” of Chinese enterprises.
Enter 2022.
When China and India held the 14th round of military commander level talks in January, the news from India was that it was considering relaxing restrictions on some Chinese investments. However, twists and turns appeared again, and New Delhi soon launched another round of investigation on Chinese enterprises in India.
It seems that New Delhi’s attitude towards Chinese enterprises in India is just like that in June. Chinese investment and Chinese enterprises have become its “targets that can be attacked at any time”.
In fact, even some Indians themselves tend to think that the Indian investigation against Chinese enterprises is “part of a carefully planned action”.
Yangyishuang, associate professor of the Indian Ocean regional research center of Yunnan University of Finance and economics, previously wrote that India’s “surprise attack” on Chinese enterprises is both “rational” and “irrational”.
The starting point of such actions is short-term political consideration, which is very irrational, but its means of implementation is very “rational”.
To investigate and deal with “tax evasion” is a reason for “legal compliance” in any country. It can argue that this is a normal behavior without political motivation.
New Delhi also chose a “rational” target: Xiaomi, oppo, etc. have a deep foundation in the Indian mobile phone market and are highly localized. It is unlikely that they will immediately give up and withdraw from the Indian market for several blows.
After such careful calculations and attempts, New Delhi has realized that it can gain a lot from cracking down on these Chinese enterprises in India at a low cost, and relevant policies can be adjusted at any time according to the ups and downs of China India relations.
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One of the big backgrounds of this so-called “adjustment” is that India thinks it has reduced its “economic dependence on China” as it wishes.
According to Indian statistics, the United States has surpassed China to become India’s largest trading partner in the fiscal year 2021-2022. The trade volume between the United States and India was 119.42 billion US dollars, and the trade volume between China and India was 115.42 billion US dollars.
According to this, some Indian scholars believe that India’s huge consumer market and rapidly developing market economy will bring huge business opportunities to us India cooperation.
This is not the case.
Zhaolijian, spokesman of the Chinese foreign ministry, pointed out that China and India have different statistical caliber, resulting in differences in their published trade figures.
According to Chinese statistics, the bilateral trade volume between China and India in 2021 is 125.66 billion US dollars. In this way, China is still India’s largest trading partner, and exceeded US $100billion for the first time.
New Delhi has always been satisfied with its desire to promote “technological decoupling” and “industrial cutting” with China, but the Sino Indian trade relationship can be deconstructed wherever it is said to be deconstructed.
Another background is the “aggressive” posture frequently displayed by the Indian military to China recently.
The latest example is the plan to establish a joint command center in China.
Indian media revealed at the end of May that the Indian army is preparing to establish a joint command center composed of the eastern army, air force and Navy headquarters and the three services headquarters located in the Andaman Nicobar Islands in order to confront any “potential challenges” from China in the northern border area and the Indian Ocean.
According to the current information, the command center named “Titla group” has great authority. It has the right to make “key decisions” when the country is faced with “security threats”.
In the direction of the border, India still has many small moves.
Several Indian media reported that the six Indian army divisions previously stationed at the India Pakistan border are gradually moving to “Arunachal Pradesh” (Southern Tibet) and other important places along the China India border. In particular, in Assam state in the northeast, the Indian army also instructed a division previously specialized in counter-terrorism operations to be only responsible for China India border defense in the future.
The timing of the latest wave of pressure on Chinese enterprises is also slightly subtle.
On May 31, Hong Liang, director of the Department of border and maritime affairs of the Ministry of foreign affairs, and Shi Naien, assistant secretary of the East Asia Department of the Ministry of foreign affairs of India, jointly chaired the 24th Meeting of the working mechanism for consultation and coordination on China India border affairs by video.
The meeting mentioned that it “agreed to earnestly implement the important consensus reached by the leaders and foreign ministers of the two countries, promote the further easing of the border situation”, and “hold the 16th round of military commander level talks as soon as possible”.
Such a coincidence makes it difficult to avoid doubt: is India trying again to “link the border dispute with the overall relationship between China and India” in order to “coerce China into making concessions”?
“As a mature and rational large developing country, China and India should put the border issue in an appropriate position in bilateral relations, and do not apply the definition of the border issue or even affect the overall development of bilateral relations.”
This remark made by foreign minister Wangyi during his visit to India in March is worth revisiting.
New Delhi, good advice is hard to hear!