The Hindu Business Line : `Basic infrastructure vital to woo FDI'

THE country may find it difficult to attract and subsequently absorb a chunk of foreign direct investments (FDI) unless active initiatives are taken by the Government to create basic infrastructure and increase the purchasing power of people, said Mr Tian Wei, First Secretary (Commerce) in the Delhi Chinese Embassy.

Addressing the members of the Bengal National Chamber of Commerce and Industry on Friday, Mr Tian said China wanted to see India develop at a great speed.

The country has the potential to improve its GDP growth from 8.4 per cent to 25 per cent in the near future. China is ready to help, if needed. He suggested that India should follow certain policies adopted 10 years ago by the Chinese Government to attract FDIs and improve the quality of life.

Mr Tian said FDIs were required to sustain economic development and the country should have the ability to absorb them. Otherwise, foreign investors may not come a big way. Hence, there is a need to create basic infrastructure such as highways, power and port facilities.

The size of the domestic market too matters. Mr Tian said China had absorbed a great deal of FDIs since its economy was opened up in a phased manner and private business was allowed in 1984.

The Chinese diplomat said the two neighbouring countries with one fourth of the global population should co-operate with each other rather than compete.

He said, while competition hindered bilateral trade, an Indo-China combine could be a dominant force in the global economy.

Mr Tian said India should adopt economic policies that suit its needs.

Since the country needs to improve the standard of living of people by providing jobs to the millions of unemployed, policy makers must be careful while choosing manufacturing technologies. He said India should not import or depend only on sophisticated technology and equipment which require great capitalbut are less labour intensive.

Mr Tian said India should initiate moves to attract FDIs in the highways and power sectors. China is ready to implement projects in these sectors, at half the cost that any European country quotes.

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