Chinese firms including Huawei, Alibaba, Tencent and MG Motors' parent company SAIC Motor are directly or indirectly linked with People's Liberation Army, according to sources within the government. Chinese government intends to route the benefits of its venture capital investments as well as civilian innovation for China's defence sector, raising a question mark on Chinese VC investments in India, including by big names like Alibaba and Tencent, sources say.
An annual report of the US Secretary of Defense to the Congress on "Military and Security Developments involving the People's Republic of China 2019" stated that an intelligence law passed in June 2017 requires Chinese companies, such as Huawei, ZTE, Tik Tok, etc to support, provide assistance, and cooperate in China's national intelligence work, wherever they operate. This has direct security implications for all overseas FDI from China.
In the spotlight are two big investors in Indian start-up sector - Tencent and Alibaba - as part of military-civil fusion initiative of China. Alibaba has strategic investments in Paytm, Zomato, online grocer BigBasket, Snapdeal and logistics firm Xpressbees. Tencent outdoes its compatriot in terms of investments in India with a portfolio including Flipkart, Byju's, Ola Cabs, Swiggy, Gaana, and news aggregator app NewsDog. It is also behind popular gaming titles like PUBG Mobile, Call of Duty Mobile, Fortnite and others.
Other household names on the list are auto manufacturer SAIC Motor Corporation Limited, which owns MG Motors, and tech major Huawei. The list also includes Xindia Steels Ltd, Xinxing Cathay International Group, and China Electronics Technology Group Corporation (CETC). CETC is China's leading military electronics manufacturer, and many of its employees have been convicted for military espionage.
This list of Chinese firms among 59 Chinese apps banned by Indian government includes popular titles like TikTok, UC Browser, CamScanner, among others.