Chinese answer to India’s manufacturing push

Discussion in 'Economy & Infrastructure' started by AVERAGE INDIAN, Sep 26, 2014.



    Sep 22, 2012
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    Detroit MI
    BEIJING/ NEW DELHI: If the focus on Thursday afternoon was on 'Make in India', by evening 'Made in China' — a campaign that includes tax concessions from the Chinese government to promote high-tech imports and research and development — too had become part of the conversation.

    After all, the bid to boost manufacturing by the 'world's factory' comes at a time when its economy is slowing down and it is bound to make public sit up and take note. And, more so in India, where the government launched its most ambitious bid to attract investment in setting up factories and create jobs.

    China will encourage high-tech imports, research and development (R&D) to upgrade 'Made in China', the Chinese central government said. Under the new campaign, China will use tax breaks to encourage enterprises to upgrade their equipment and increase R&D efforts to improve the manufacturing industry.

    Companies that bought new R&D equipment and facilities after January 1 or possess minor fixed assets, will be offered reduction in taxes based on value, the Cabinet, presided over by Premier Li Keqiang, has decided.

    Imported high-tech equipment will also enjoy tax deductions in aviation, bio-medicine production, manufacturing of railway and ships, electronics production, including computer and telecommunications, instrument production and those used in making IT products and software, state-run Xinhua news agency reported on Thursday.

    For India's neighbour the focus is on moving up the value chain — from low-cost manufacturing of skirts, handbags and electronic goods to more sophisticated products and equipment. In contrast, the Indian government is targeting all manufacturing sectors, besides the mass-job creators such as tourism and hospitality to create employment. Several government officials have suggested that a key element of India's manufacturing plan should be to target sectors such garments and engineering goods, where China is giving up space as it looks at higher-end goods.

    Government officials played down China's campaign, saying the two were very different. "What we are talking about is increasing the share of manufacturing to a quarter of the economy. They seem to be talking about specific sectors," said an official.

    In several sectors such as aerospace and defence, where high-end production is involved, the government has only recently opened the doors and the volumes are much lower to justify a full-fledged presence for international majors. In addition, India still suffers from several infrastructure handicaps, while China has rapidly ramped up capacity at ports and has added significant power generation capacity.

    Chinese answer to India’s manufacturing push - The Times of India

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