Illustration: Chen Xia/GT
Chinese Ambassador to India Xu Feihong on Wednesday published an article in the Times of India, headlined "India-China Can Achieve A Dragon-Elephant Tango." In the piece, Xu said that China welcomes more Indian high-quality products and will be more than happy to share its development dividends with India. Indian companies can enhance "Make in India" by "investing in China."
Manufacturing stands as one of the earliest sectors in China to open up to foreign investors. The country has fully lifted foreign investment restrictions within this sector. China is equipped with a comprehensive industrial system, an expansive market and a high-quality talent pool. These attributes not only draw foreign enterprises but also pave the way for China-India economic cooperation, as well as opportunities for investing in China.
In recent years, propelled by continuous advancements in technological innovation, China has made significant strides in the production and trade of intermediate goods, including critical components, electronic parts and basic materials. According to media reports in 2024, China has been the world's leading exporter of intermediate goods for several consecutive years, demonstrating that it has established an industrial chain and ecosystem capable of supporting the rapid development of intermediate goods production. China is gradually becoming a crucial hub for global intermediate goods production and trade, creating new opportunities for trade and investment between China and India.
In recent years, India's manufacturing sector has likewise experienced rapid growth, particularly in the output of finished products. This development has, to some extent, intensified the competitive dynamics with Chinese manufacturing. However, concurrently, the expansion of India's finished-product manufacturing has generated a significant demand for intermediate goods, presenting opportunities for China-India collaboration in the production of these goods. A strategy worth considering is investing in the production of intermediate goods in China, taking advantage of China's mature industrial ecosystem and its accumulated capabilities and strengths in producing these goods.
By investing in China, Indian enterprises could capitalize on the established advantages there to supply the Indian manufacturing sector with a continuous stream of high-quality, low-cost intermediate products, thereby propelling the development of manufacturing in India. Additionally, this approach can enhance upstream industries - specifically, the export of raw materials for intermediate goods production from India to China. This strategy not only fosters mutual growth between the two countries but also contributes to more integrated and cooperative regional industrial and supply chains.
Intermediate goods, among various factors, underscore the complementarity between the Chinese and Indian economies. In the long run, actively enhancing the industrial complementarity between the two countries, and ensuring that complementarity prevails over competition, is an effective way to advance China-India economic development. Throughout this process, economic cooperation is beneficial in fostering mutual trust, and an increase in mutual trust, in turn, facilitates further collaboration.
Chinese Foreign Ministry spokesperson Mao Ning said on Monday that as the two largest developing countries, China and India have a shared task to achieve respective development and revitalization, and they should understand and support each other, and help each other succeed. "A cooperative pas de deux of the dragon and the elephant is the only right choice for both sides," said the spokesperson.
In 2025, the international economic landscape has become increasingly complex, with a rise in trade protectionism and uncertainty, which is expected to weigh on global trade and the recovery of the world economy. This scenario also presents challenges to the Asian supply chain. For India's manufacturing sector, the external environment is challenging, yet if it can capitalize on the opportunities arising from China's development and high-level openness, investing in China to drive the development of India's manufacturing industry could bolster the Indian economy.
