BEIJING: China on Monday said it hopes India will provide a fair and non-discriminatory business environment for Chinese companies after smartphone maker Xiaomi alleged threats of “physical violence” against executives during investigations into illegal remittances made by the company.
“China is closely following the situation. The Chinese government always asks Chinese companies to abide by laws and regulations while doing business overseas,” Chinese foreign ministry spokesperson, Zhao Lijian said on Monday.
Zhao was responding to a question on allegations levelled by top Xiaomi executives that they faced threats of physical violence and coercion during questioning by India’s Enforcement Directorate (ED).
The ED has called the allegations “untrue and baseless”. “But at the same time it firmly supports the Chinese companies in upholding their lawful rights and interests,” Zhao said.
“We hope India will provide a fair, just and non-discriminatory business environment for Chinese companies, conduct investigation and law enforcement in accordance with laws and regulations so as to increase the confidence of global investors,” Zhao added.
Separately, the state-backed tabloid, Global Times said India should stop its “regulatory assault” on Chinese companies.
In an opinion piece published late on Sunday, the GT said the uncertainty surrounding Xiaomi’s “regulatory predicament should raise a red flag for India” and asked New Delhi to stop its “regulatory assault on Chinese companies”.
“The impression that Chinese and other foreign companies could be intentionally targeted and suppressed isn’t something good or favourable for India,” it said.
The opinion piece, however, added it was early to say whether India is intentionally targeting Xiaomi or more Chinese companies would face the same experience.
“This is because what has happened to Xiaomi could be seen as another example of India’s crackdown on Chinese companies, and no one knows whether such an event of business hostility would lead to more Chinese companies there subject to growing regulatory scrutiny in the Indian market in the future,” the GT opinion piece said.
The development comes in the backdrop of ED on April 29 making a seizure of ₹5,551 crore ($716 million) of Xiaomi in bank accounts for violating the foreign exchange law.
Earlier this week, the Karnataka high court stayed the ED’s action.
“Sharing details of questioning of Xiaomi’s senior executives, ED said on Saturday that Jain’s statements under FEMA were recorded on April 13, 14, 21 and 26, while those of company’s chief financial officer Sameer BS Rao were recorded on March 25, April 14, 19, 21, 22 and 26,” a HT report from New Delhi said.
Ties between India and China have plummeted because of the ongoing border tension in eastern Ladakh, and many Chinese companies have come under scrutiny.
In 2020, New Delhi cited security concerns in banning over 300 Chinese apps- including TikTok – and tightened norms for Chinese companies investing in India.