The Government of India has identified China-based companies with links to the People’s Liberation Army (PLA) operating in the country less than a month after it banned 59 Chinese mobile applications, including TikTok.

According to the Centre, Chinese companies operating in India have been carrying out overseas intelligence work.

China’s 2017 Intelligence Law

In June of 2017, China’s legislature passed a new intelligence law giving itself the power to monitor suspects, raid premises and seize vehicles and devices. This has been recorded in the annual report of the US Secretary of Defence to the American Congress on “Military and Security Developments involving the People’s Republic of China 2019”.

Chinese companies such as Huawei, ZTE, TikTok, etc have been tasked with supporting, providing assistance, and cooperating with China’s national intelligence undertakings, wherever they operate as per this law.

Article 7 of the law states – “Any organization or citizen shall support, assist and cooperate with the state intelligence work in accordance with the law. The state protects individuals and organizations that support, assist and cooperate with national intelligence work.”

This 2017 law has direct security implications for all overseas FDI originating from China. Here are some Chinese companies in India with direct/indirect links with the PLA.

Xindia Steels Ltd:

Considered as one of the largest joint ventures between India and China, Xindia Steels has recently commissioned a 0.8 mtpa iron ore pelletisation facility in Karnataka’s Koppal district, adjacent to Hospet at a total cost of over Rs 250 crores.

Its main investor is Xinxing Cathay International Group Co Ltd (China) which as per its website, is reorganized, reconstructed and unhooked from previous Production Department and subordinate enterprises and institutions of the General Logistics Department of the PLA.

Xinxing Cathay International Group:

The group set up a manufacturing facility in Chhattisgarh, involving an investment of Rs 1,000 crores. Chhattisgarh government has invited the Chinese company to set up a manufacturing plant in the state and the company is expected to send a team to physically examine the state and position of iron ore in the state. With a turnover of almost Rs 3,000 crores, Xinxing has already supplied close to 30,000 tonnes of ductile iron pipes to India.

China Electronics Technology Group Corporation (CETC):

In 2018, the CETC announced a USD 46 million (Rs 320 crores) investment in a 200 MW PV manufacturing facility in Andhra Pradesh’s Sri City. The CETC is China’s leading military electronics manufacturer and also produces Hikvision CCTV cameras. Several CETC research institutes and subsidiaries have been added to the US government’s entity list meant to restrict exports on national security grounds.

Apart from being implicated by the US Department of Justice in at least three cases of illegal exports, many CETC employees have also been convicted for military espionage. The CETC provides technology used for human rights abuses in Xinjiang, where approximately 1.5 million Uyghurs are being held in re-education camps.

Huawei:

Ren Zhengfei, a former deputy director of the PLA engineering corps, founded Huawei in 1987 in Shenzhen. Huawei is a popular brand in India and reported revenue of Rs 12,800 crores in FY2018-19 from its Indian operations. Its main product lines include smartphones and mobile communication.