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A Look At Chinese Cos Having Investments In India With PLA Links, As Centre Probes 59 Apps

India is also scrutinising several Chinese companies involved and invested in the Indian market on financing, data security, funds, parent company, harvesting

Chinese PLA

As India and China complete 4th round of Commander-level talks on 'de-escalation and total disengagement', India is also scrutinising several Chinese companies involved and invested in the Indian market on financing, data security, funds, parent company, harvesting data of Indians etc. While India has banned 59 Chinese applications over data security concerns, government sources reveal on Saturday, that there are several Chinese companies with links to China's People’s Liberation Army (PLA) and are operational in India. Sources name companies like  - Xindia Steels Ltd, China Electronics Technology Group Corporation (CETC), Huawei, with direct/indirect links with the PLA, while companies like Alibaba, Tencent, SAIC Motor Corporation Limited are involved in joint ventures with the PLA.

Centre poses 79 questions to 59 banned Chinese apps; gives 3 weeks' time to respond

Chinese companies with direct/indirect links with PLA

As per a Chinese law passed in June 2017, the Jinping government has the powers to monitor suspects, raid premises and seize vehicles and devices - which requires Huawei, ZTE, Tik Tok etc to support in China’s national intelligence work, wherever they operate, states the Annual report of the US Secretary of Defense to the Congress. This has risen security questions on companies like Xindia Steels, CETC and Huawei, as per government sources. All these companies have set up major manufacturing companies in different parts of India.

  • Xindia Steels: Commissioned a 0.8 mtpa Iron Ore Pelletisation facility in Koppal District, Karnataka and its main investor is s Xinxing Cathay International Group Co. Ltd. (China) - which is a reorganized s Production Department and subordinate enterprises and institutions of the General Logistics Department of the PLA, as per Xinxing's official website. Moreover, Xinxing itself has set up a manufacturing facility in Chhattisgarh, involving an investment of Rs.1,000 crore and already supplies about 30,000 tonnes of ductile iron pipes to India, as per reports.
  • CETC: CETC, which is China’s leading military electronics manufacturer has announced a US$46 million (Rs. 320 crore) investment in a 200 MW PV manufacturing facility in Andhra Pradesh's Sri city in 2018. Government sources state that CETC has been implicated by the US Department of Justice in at least three cases of illegal exports and it also provides technology in Xinjiang where approximately 1.5m are held in re-education camps.
  • Huawei: Several governments believe that Huawei founder Ren Zhengfei, who is former People's Liberation Army officer, may use the network to collect surveillance on his customers, according to cybersecurity experts. Moreover, last year Huawei phones were banned by networks including Verizon and AT&T after security threats were flagged. Huawei is a popular brand in India, and reported revenue of Rs. 12,800 Cr in 2018-19 from its Indian operations. While it has been banned by UK and US' mobile networks, India too is mulling to bar it from its upcoming 5G trials.

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Chinese companies in joint ventures with PLA

Apart from these companies, China has its military-civil fusion policy which 'aims to spur innovation and economic growth through an array of policies and other government-supported mechanisms, including venture capital (VC) funds, while leveraging the fruits of civilian innovation for China’s defense sector', as stated a report by the United States-China Economic and Security Review Commission. In this sector, several companies like Alibaba, Tencent and SAIC are involved as Venture capitalists in multiple Indian start-ups. While Alibaba and Tencent comprise the majority of China's Artificial intelligence network, SAIC is a major automotive firm. Here are some of these companies' investment in Indian start-ups:

  • Alibaba: This Chinese giant's investment involved payments firm Paytm and its e-commerce arm Paytm Mall, food delivery startup Zomato, online grocer BigBasket, Snapdeal and logistics firm Xpressbees.
  • Tencent: It initially invested US$400 million in Ola Cabs, US$700 million investment in Flipkart, US$175 million in Hike Messenger, a US$90 million injection in the healthcare startup Practo, US$40 million in the
  • learning app Byju’s, US$1 billion funding round for Swiggy via shareholder Nasper, US$100 million in Dream11 Fantasy, a US$115 million funding round into the music streaming service - Gaana and a US$50 million round into the aggregator app NewsDog.
  • SAIC Motor Corporation Limited: Is the parent company of MG Motors, which sells MG Hector in India. One of the subsidiaries of SAIC is Nanjing Automobile- which was previously a vehicle servicing unit of PLA

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Centre poses 79 questions to 59 banned Chinese apps

After banning 59 Chinese applications in India over 'security concerns', the Centre has posed 79 questions to the apps on varying topics including financing, data security, funds, parent company, harvesting data of Indians on July 10. These companies which include TikTok, Helo, and Xiaomi have been given 3 weeks' time to answer these questions. Several companies have sought a meeting with the Information & Broadcast (I&B) Ministry to explain their business and data management.

On 29 June, the Home Ministry banned 59 Chinese Apps including Tik-Tok. The Centre has stated that it has received many complaints from various sources including several reports about the misuse of these apps for stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers that have locations outside India.

Hence, in a move to protect the sovereignty of Indian Cyberspace and to ensure the interests of crores of Indian mobile users, the government has stated that this was a major blow to China’s Digital Silk Route ambitions. Meanwhile, both India and China are committed to 'disengage and de-escalate' along the LAC after the Galwan clashes where 20 Indian soldiers were martyred.

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