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Last year, factories in China were shut down due to the pandemic, a situation that sparked interest in India, which laid out an ambitious plan to "empty China". India first set its sights on electronics manufacturing, offering attractive conditions to attract Chinese multinationals to relocate to India. They promise to receive a 4 to 6 percent sales incentive from the Indian government over the next five years if electronics are manufactured in India. As a result, Wistron and other companies responded by choosing to move their factories to India. Seeing the success of this program, India has expanded incentives to include multiple industries such as automotive, pharmaceuticals, textiles and food processing to compete for more manufacturing plants. At the time, the outbreak in China raised global concerns about supply chain risk, so countries tried to spread this risk.
India's plans at the time had some effect, with 24 mobile phone factories planning to move to India, and even Samsung and Apple promised to move some production to India. The situation has left many in China pessimistic, fearing that India's "empty China" plan will succeed. However, no one expected that the outbreak would spread quickly to India, and because India did not have strict lockdown measures, the epidemic spread rapidly. This has led many factories to regret moving to India, heralding a serious setback for India's "empty China" plan.
So why does India dare to openly challenge China? Are there still opportunities for India to attract multinationals in China?
First, India's reason for daring to challenge China lies in its domestic problems. India has a long history of high unemployment, due to the low proportion of manufacturing, the large number of unemployed, which has led to social instability and escalating contradictions. The Indian authorities urgently need to solve the employment problem, and manufacturing is the best way to solve the employment problem, while also increasing the country's wealth and strength.
Second, India dares to challenge China because of the support of external factors. India did not hesitate to abandon its policy of neutrality and signed an alliance agreement with the United States to seek American support to develop its own manufacturing industry. This gives India external help and more confidence to challenge China.
However, India faces a number of problems. First, many businesses have encountered difficulties after relocating to India, such as workers' riots and emotional behavior by the government, which has made foreign companies worried about India. Second, the Indian government's poor response to the pandemic has led to an unstable production environment, which poses a threat to attracting foreign investment.
To sum up, India's "empty China" plan faces many challenges and difficulties, while China still has the advantage of attracting foreign investment. However, China also needs to be wary of the adjustment of supply chain strategies by the United States and the European Union to secure its manufacturing position. Only what you have mastered belongs to you, and this is a lesson that a country should keep in mind.
Summary:
India has tried to challenge China's manufacturing position, but the plan has suffered setbacks due to a range of internal and external factors. India faces employment issues and social instability, but the emotional behavior of its government and the poor response to the pandemic have created concerns among foreign companies about India. China still has the advantage of attracting foreign investment and maintaining its leading position in manufacturing, but it needs to be wary of the adjustment of international competition. Only by independently mastering the core technology and supply chain can we ensure the independence and strength of the country.
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