This is what so many in the West, ASEAN, and India don't understand about how China suddenly became an industrial powerhouse. They only assume that Chinese companies copied and stole technology to build their industry. But they had forgotten that copying and stealing technology is useless without the understanding and knowledge to use them.
China's High Speed Rail story is a great example. Many haters like to accuse China of stealing HSR Technology from Japan and the EU. But they didn't know that China already had a prototype HST (albeit of inferior design) prior to importing foreign HST technology. That means that the Chinese already had a foundational understanding of HST technology before importing foreign technology.
China allowed foreign HSR firms to enter into China, but with conditions of JV with SOEs and ToT. Yeah it did hurt some of the private players in the local rail industry at 1st. But they would have to adapt to the new standards, lead by the SOEs, or miss out on new business opportunities. In the end it worked. China built an industry around their HSR program and is now a HSR powerhouse.
India on paper sounds like it had done the same thing wrt HSR. But there are many things missing. Instead of thinking about building the foundations and industry around their HSR program. India was busy trying to get it's billionaires to make a fortune from the projects. And just conveniently eaving the builders and suppliers to navigate the Indian bureaucratic minefield.
Indian protectionism benefits only the billionaires and the politically connected. They couldn't care less about the small-medium businesses. The big Indian businesses only want to make money, they don't wanna compete. That is why they love trade protectionism. This is never good for innovation and progress.
That's right. India demands ToT and equity. Not that this is a unique thing or is wrong. But to what benefit for the foreign firm?
To whom do you give that equity to? To the worthy? Or to Modi's billionaire friends? More importantly, is this a profitable deal? The Indian market has many bodies, but very few actual buyers. The Indian workforce is huge, but very few would qualify, or are reliable. The Indian infrastructure is rotten, and in dire need of upgrades. Worse still, the Indian government can suddenly make an excuse to take huge chunks of cash from you. No rule of law.
Malaysia did the same BS as India when it came to FDI. Look at them now, nearly 0 new FDIs coming in. There is a price for greed and stupidity. India is riding on it's reputation as the next China to attract FDI. But the departure of a number of foreign firms is proving that India is and will never be the next China.
