Navigating Chinese Investments | Photo credit: Pakawadee Wongjinda
The subsidiary is valued at $1.5 billion and has a growing market share in the home appliances segment, which includes freezers, refrigerators, washing machines and air conditioners. Details such as Haier’s revenue from share sales, funds injected by new shareholders and the degree of control Haier retains remain unknown.
Despite the differences, both deals represent global continuity in certain aspects of dealmaking involving Chinese companies. First, the trend of giving up Chinese control in exchange for market access is gaining acceptance. Secondly, there is the role of private equity as a geopolitical buffer. Third, there is convergence among democratic countries in the view that, due to features of China’s political system and its dominant position in the manufacturing sector, the benefits of equal treatment provided by the multilateral trade and investment frameworks can be denied to Chinese companies on grounds of national security or self-reliance.
Simply put, we can expect more examples of Trump-style bargains faced by Chinese companies with foreign ambitions.
These trends come at a time when China’s scope for domestic policymaking to support economic growth is shrinking. The IMF has warned China that a transition to consumption-led growth is essential to reduce dependence on its export growth model. Excess production capacity, caused by excessive investment in technology, is also a hindrance. Against this context, a forced expansion of China’s manufacturing footprint abroad will make domestic policymaking more difficult.
From a bilateral perspective, the Haier deal illustrates the ambition of Chinese companies to tap the potential of the Indian market despite geopolitical and regulatory challenges. It will help stabilize economic ties between India and China, which have been on the mend since Prime Minister Modi and President Xi met in Kazan in October 2024.
The Chinese government’s approval of this transaction signals a grudging recognition of India’s significant contribution to the global market share of Chinese players in certain sectors. It is a recognition by China that developing a manufacturing footprint abroad is essential, despite excessive industrial capacity at home. It also offers relief to the discomfort that countries with manufacturing ambitions face when faced with China’s $1 trillion trade surplus.
The questions
Yet there is something about this deal that leaves more to be desired on the Indian policy front. Despite the great similarities, there was a sharp contrast in the tactics used. The US had to implement a ban on Tiktok to enforce the deal. Indian policymakers achieved a similar result by withholding bureaucratic approval of Haier’s proposed capital injection under Press Note 3, a Covid-era foreign direct investment screening mechanism. This difference is not unimportant. Both from the perspective of the rule of law and as an effective strategy to promote the national interest.
The Haier deal comes in the wake of similar joint ventures in the automotive and electronics industries. Several prominent business families and private investors have reportedly been engaged in protracted negotiations with Haier for more than six months. During this period, Haier’s FDI solicitation was suspended, starving a growing business of capital and potentially putting manufacturing jobs at risk.
Such tactics create the appearance that joint ventures between Indian business groups and Chinese companies are being orchestrated by an invisible hand. This raises the question of how such tactics impact India’s attractiveness among foreign investors.
The lazy answer is that India is borrowing tricks from the Chinese playbook that forced foreign companies to give up technology in exchange for market access. And that’s why Chinese companies are only served desserts. It could be so.
What if we adopt a greater ambition of nation building? We have a domestic market big enough to feed homegrown world champions. Are joint ventures involving a handful of business houses an adequate solution to address China’s economic security challenges? The FDI screening mechanism aimed at Chinese investors does not reflect desirable sectoral priorities, investment models or governance structures even after five years of implementation.
Will the Haier deal give Indian policymakers more confidence in expressing their preferences? Can we adopt global best practices and develop a more rigorous model of cooperation with Chinese industry worth emulating by other developing countries? Do we have enough confidence to learn positive lessons from China’s experience in industrialization and innovation to advance our vision of a Viksit Bharat, in a manner befitting the world’s largest democracy?
The writer is a Partner, Dentons Link Legal, and Honorary Fellow, Institute of Chinese Studies
Published on January 1, 2026
#Lessons #Haier #deal