We see that all transactions have stopped due to Lockdown. The stock market and economy seem to be coming down to a large extent. The whole country is facing Corona Virus and lockdown. At present, many countries are on the condition of Lockdown, and all countries economy has terrible results and struggling. Due to this, stock markets are falling, and as well as the valuations of companies are also going down. China wants to take advantage of this. China has been investing in India for a long time. India’s HDFC Bank has come down 35% from the last 3 months, so taking advantage of this opportunity, China’s central bank has bought a 1.01% stake in this bank.
China mostly invests and gives loans in a country where the country is going through a bad economic crisis. So that it can take that particular country under its control when debt comes under more pressure on the country. Many companies are present at low prices due to Corona Virus and Lockdown, and China is investing in global markets by taking advantage of it. China has a foreign reserve of $ 3 trillion (228 Lacs Cr). And is thinking of using it to invest in other countries
Changes In FDI Rules:
In this, The Indian government has few changes in FDI rules. Foreign investors (Connected country borders to India, Specially China) will have to take permission from the government to invest in the Indian stock market. Before foreign investors didn’t need to take the permission of the government to invest in the stock market it was processing on the SEBI agreement. So far China was investing in automatic approval. Now the market situation is so week valuations are down, recession period happening. The US invests a lot in India but now that country is in trouble and in this situation country like china looking as an opportunity to purchase a huge stake in Indian and europian companies. Which is not so good. Therefore europian countries also change FDI rules.
A hostile takeover is another reason for changes in FDI rules. In hostile takeovers, companies are acquired without any permission. India, European countries, and the rest of the country have fears that if the share price falls more then Chinese companies should not take over, so changes in FDI rules are happening.
Unicorn startups Investments:
Alibaba, Tencent, Bytedance, Fosun, etc. like many Chinese companies have invested in Indian startups. China’s investment in India has been increasing from the last few years. There are 31 unicorn startups in India And it has invested in 18 startups by Chinese companies. Unicorn startups mean valuations of over $ 1 billion (7,000 Cr).
Zomato, Dream11, Bigbasket, Byju’s, Ganna, Snapdeal, Paytm Mall, etc. in these startups Chinese companies and investors have invested heavily. As an example, Bytedance is a Parent company of TikTok has invested 25 million dollars in Dialyhunt which one news aggregator company in India. China’s big company Alibaba has also invested in India’s many startups. The recently launched MG Hector auto company is planning to expand rapidly in India.
Allegations on Chinese companies:
If other countries investing in our country is a good thing, but a country like China, investing in our country is not a good thing. There are many allegations on Chinese companies that they share their user data with the Chinese government.