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Indian businesses plot a new course for Jiaxing

THE standard route for industrial businesses setting up in China is first to establish manufacturing centers in big cities such as Shanghai or Suzhou, in Jiangsu Province, and then consider expanding operations, once a full understanding of the market has been grasped.

Now, however, expat businesspeople based in Shanghai have an alternative route that bypasses crowded metropolises.

Ashish Vaishnav, general manager for Thermax, an air conditioner manufacturing company, came to Shanghai from India five years ago. Now he frequently travels between the Thermax office in Shanghai and a factory in Jiaxing, Zhejiang Province, which is around a one-and-a-half-hour drive away.

"We found the Yangtze Delta region very dynamic but most people only know about Shanghai or Suzhou," he said. "After being in Shanghai for a period of time, I started to visit various places in the region to do research and investigation and found Jiaxing was a very nice alternative. Here, the manufacturing industry is not as intensive as in Shanghai or Suzhou."

The first overseas manufacturing unit for Thermax, located in Jiaxing, was set up in the middle of 2007 under its subsidiary Thermax (Zhejiang) Cooling & Heating Engineering Co Ltd, with an investment of US$8 million.

"The sincerity of leaders in Jiaxing at various levels assures us that the decision to invest in Jiaxing was correct," Vaishnav said. "It took only 18 months to set up the factory since our first visit here, which is highly efficient, and we do hope more Indian companies will follow our lead and come here."

Low-cost option

Siddharth Shrivastav, general manager of Elgi Equipment (Zhejiang) Ltd, went to Jiaxing six months ago. Elgi's factory in Jiaxing is still under construction.

"A consultancy decided on the site of the factory through research work and we think it's a good choice," he told Shanghai Daily. "Our suppliers and clients are within close reach and the cost here is lower compared with other established industry parks.

"The Indian community in Jiaxing is still rather small," Shrivastav said. "But more Indian enterprises that formerly had headquarters in Shanghai or Suzhou will certainly turn to Jiaxing as a second choice either for building a factory or setting up an office."

Jiaxing had eight Indian companies by the end of 2008, covering sectors including machinery, petrochemicals and textiles. Their total contract value was US$71.4 million.

The export value from Jia°?xing to India in 2008 was US$237 million, up 11.8 percent from the previous year. The southeastern region of China contributed one third of the total trade volume between China and India.

Riva Ganguly Das, consul-general of the Indian Consulate in Shanghai, met local officials of Jiaxing during a two-day seminar last month, along with an Indian commerce delegation. This was her second visit to Jiaxing in four months to promote collaboration between Indian and Chinese businesses.

"There are many opportunities for Indian businesses in Jiaxing, not only in manufacturing, but in agricultural, electrical appliances and petrochemicals," said E.B. Rajesh, chief representative of the Confederation of Indian Industry in Shanghai.

"We're willing to provide information to any Indian company that wishes to come to China."


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