Economic slowdown, rising manpower cost in China may benefit MP

A slowdown in China’s economy and rising manpower costs may prompt some Chinese firms to invest in Madhya Pradesh following the state government’s incentives to them, feel experts.

A slowdown in China’s economy and rising manpower costs may prompt some Chinese firms to invest in Madhya Pradesh following the state government’s incentives to them, feel experts.

Pithampur industry association president Gautam Kothari cautioned that the state government should ensure a level-playing field to the existing industry. (Representational Image)

However, the exclusive Chinese zone may take time to become a reality, they feel. The state government has proposed to establish an exclusive Chinese zone on a 205-hectare land in Pithampur industrial area.

A high-level delegation led by chief minister Shivraj Singh Chouhan is in China as part of a road show to woo potential investors ahead of Global Investors’ Summit in Indore in October 2016. Madhya Pradesh has already signed an MoU worth $1 billion with Sany group of China with the Chinese company expressing interest in investing in 500 MW wind energy sector and building industrial infrastructure, a government spokesman said.

“Slowdown in China, domestic issues and rising manpower costs could lead to some companies shifting manufacturing base to India, but this would mostly be in terms of uncoupling of joint ventures and not local Chinese investment,” former CII Madhya Pradesh president Girish Mangla said. “Exclusive Chinese zone is a very ambitious project as our cultures are entirely different,” he said.

The state government has apprised the Chinese business community of availability of vast industrial land available on concessional rates for 30-year lease. The state government is also offering other incentives including tax breaks.

‘Foreign investment should not come at the cost of local industry’

However, Pithampur industry association president Gautam Kothari cautioned that the state government should ensure a level-playing field to the existing industry. “Foreign investment is welcome but it should not come at the cost of local industry and so the government should ensure a level-playing field. The idea of the exclusive Chinese zone is farfetched as the earlier proposed Japanese exclusive zone is yet to take off,” he said.

MP is looking to emulate Rajasthan’s model of successfully setting up exclusive industrial zones for Japanese and South Korean companies in Nimrana in Rajasthan. The government has earmarked 1,200 acres of land in Pithampur for building a ‘country-specific industrial township.’

Earlier this year, the government had organised an investment seminar for the Japanese companies for attracting investment to the exclusive industrial township but is yet to get a concrete response.