Can China be Hurt Economically by Tightening Bidding Regulations for Border Countries?

The tension which started between India and China due to the skirmishes along the Ladakh border is not coming to an end. Now the central government has made such a change in the General Financial Rules 2017, which will have the most impact on China. The central government has prohibited bidding in government purchases on behalf of countries that share borders with India. The Central Government has also issued instructions to all the states that they should implement this rule in all their government purchases.

However, statistics show that China still invests much less in India than other countries, and even today, Chinese businessmen prefer countries like Hong Kong and Singapore to invest money. According to the Statista website, in 2018, China invested a total of $143 billion across the whole world. The maximum investment was made in Hong Kong, where Chinese companies invested $86.87 billion. In the year 2018, Chinese traders invested money in the US where they invested $ 7.48 billion. Then comes the number of Virgin Islands, where Chinese traders sent $7.15 billion as foreign direct investment. The Virgin Islands is known as a tax haven in the world, ie the country where most people hide their black money. In Singapore, Chinese companies invested $6.41 billion.

The US Bureau of Economic Analysis report says that China invested only $3.8 billion in India in 2018, while in the same year the US invested $46 billion in India.

In the last few years, Chinese money has started coming into the Indian market rapidly, but even then it is extremely less than other countries. This speed has also slowed down due to the tension arising out of the Ladakh border dispute.