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ODI policy: China should learn from India

September 11, 2012 18:00 IST
Chinese flagChina should learn 'valuable lessons' from the Indian approach to its overseas direct investment which has won wider acceptance without attracting prejudice, official media said in Beijing on Tuesday.

Compared with China, India's overseas investments are more market and resource oriented, a write up in the state-run Global Times said, drawing up a comparison between India-China overseas investment policy.

"Since 1991, India's private enterprises have greatly engaged in investing abroad. The volume of overseas investments by private enterprises is small but they cover a wide range of programs," it said.

"In order to protect and expand its overseas interests, India has adopted a series of measures, some of which are familiar to China. But there are also different measures from which China can learn valuable lessons," it said.

India is good at using non-governmental influence in safeguarding and expanding overseas investments.

India has a relatively mature civil society, and there are a lot of non-governmental units such as chambers of commerce, NGOs and think-tanks, which
have a close ties with the international society and India's authorities.

They are used as favourable means for India to protect its overseas interests, complementing the inadequate governmental agencies.

That's also why India suffers less political prejudice and accusations of promoting 'new colonialism', as China does.

India gives full play to private enterprises and mainly uses international rules and bilateral or multilateral treaties to protect its overseas investments in those developed countries with a relatively sound legal system, while in those developing countries or less developed countries, it uses comprehensive means to safeguard its overseas interests.

"China should make up for its deficiencies here. It should enhance the study of enterprises' investment strategy and strengthen the market investments in developed countries based on carefully studying their laws and regulations".

"More importantly, China should actively support the development of private enterprises and non-governmental forces, encouraging them to invest in foreign countries," it said.

China's ODI till last year was stated to be around $74 billion compared to India's $15 billion.

K J M Varma in Beijing
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