China has emerged as one of the fastest-growing sources of Foreign Direct Investment (FDI) into India -- it was 17th largest in 2016, up from the 28th rank in 2014 and 35th in 2011.In 2011, the total Chinese investment in India was $102 million. Last year, a record $1 billion of Chinese FDI reportedly flowed in, but official Indian and Chinese statistics differ on cumulative figures. The Department of Industrial Policy and Promotion (DIPP) last year estimated that total FDI from China between April 2000 and December 2016 was $1.6 billion. Indian industry analysts and media reports have estimated the figure to be over $2 billion."Actual Chinese investment in India is at least three times higher than the official Indian figure," Santosh Pai, partner at Gurgaon-based Link Legal India Law Services, which provides legal services to members of the China Council for the Promotion of International Trade, told IndiaSpend.Indian statistics capture direct investments from mainland China, but a majority of Chinese overseas direct investment, Pai noted, flows through tax havens such as Hong Kong. Last year, Chinese Vice-minister for Finance Shi Yaobin was quoted saying China has cumulatively invested $4.07 billion in India, and India has invested $650 million in China."China will be one of India's top 10 investors shortly," Pai said. He recalled his experience of building a clientele in Beijing in 2010. The Indian firm he worked for had no clients in China. He would drive up and down Beijing's best-known road, Changan, noting down companies' names on buildings along the way. Later, he would track down those companies online and approach them for business. In six years, his firm's Chinese clientele grew from zero to 120 companies (the firm has since merged with the one he works with now).Six years ago, investors from the world's second-largest economy were hard to find in India. Today, India's largest digital payments company Paytm is 40 per cent-owned by Chinese e-commerce firm Alibaba and its affiliates, and Alibaba is reportedly raising its stake to 62 per cent. China's fourth-largest mobile phone company Xiaomi assembles one phone every second at a new factory in India.Sixty percent of Chinese FDI is concentrated in the automobile industry. Several companies' regional offices are located in Ahmedabad, although Chinese companies are gradually moving away from an initial preference for Gujarat towards Maharashtra, Andhra Pradesh, Tamil Nadu and Haryana. Seven smartphone companies from China have launched, or plan to launch, factories in India, according to a February 2017 Chinese media report, Rise and Coexist.Nonetheless, Chinese investment flows into India remain relatively low, both in terms of total FDI flows into India and Chinese outward investment globally. China's share of total FDI in India is only 0.5 per cent, despite its being the second-largest economy in the world and India's largest trading partner, according to DIPP.This pales in comparison with fellow Asian powerhouse Japan (7.7 per cent). Meanwhile, the US, which China recently replaced as the world's largest economy in purchasing power parity terms, has a 6.13 per cent share in total FDI in India.While China's FDI flow into India last year showed a relatively significant rise, the figure was negligible when viewed against China's outbound investment of over a trillion yuan or $170 billion across 164 nations last year -- including $45.6 billion in the US alone.Chinese FDI in India has increased even as India and China have picked new points of political disagreement in the last two years. India objects to China's $46 billion investment in the China-Pakistan economic corridor that passes through parts of Pakistan-occupied Kashmir. Last year, Beijing obstructed India's efforts to get membership of the Nuclear Suppliers Group, and China has repeatedly blocked a proposal at the United Nations to blacklist Jaish-e-Mohammed chief Masood Azhar, implicated in terror strikes in India including the 2016 Pathankot attack."There is no drop in the activity of Chinese companies evaluating India because of political relations between the two countries,'' Sridhar Venkiteswaran, CEO of Avalon Consulting in Delhi, told IndiaSpend. "Increasingly, the Indian political establishment too does not want to place any roadblocks on Chinese investment into India... but Indian companies tend to push back when there is negative news about the Sino-Indian relationship."Chinese commentary on India today reflects this combination of geopolitical rivalry and enhanced commercial interest. China's government-backed newspaper Global Times published a record-setting 80 opinion pieces on India in 2016, and its coverage of India is on the rise. The articles are a mix of political warnings against antagonising China and business reports evaluating investment in India. Though New Delhi has refused to endorse China's One Belt, One Road initiative to build infrastructure to link Asia with Europe and Africa, sections of the Chinese media have projected an upcoming industrial park in India's Gujarat as part of the same Chinese initiative.Faced with double-digit increases in labour costs, an ageing workforce and a record slowdown in economic growth, Chinese companies have been searching for alternative manufacturing destinations and new markets since the economic downturn of 2008.India is a "hot investment opportunity", Li Bojun, a counsellor at the Chinese embassy was quoted saying in the People's Daily in February 2017. Chinese companies are showing more confidence in the Indian economy as it grows faster than their own and narrows the gap in competitiveness between the two Asian giants. India ranked 39th compared with China at 28th in the World Economic Forum's Global Competitiveness Report on 138 nations in 2016-17, raising its rank by 16 positions from the 55th in 2015-16."The fact that the Indian economy is now the fastest-growing has had a positive signalling effect in China," Pai said.A 2015-16 joint report by Indian industry association Confederation of Indian Industry (CII) and Avalon Consulting estimated that labour costs for manufacturing personnel are 1.5 to 3 times higher in China than in India. The report noted that China is "losing competitiveness" to India in several light engineering-related industries, which is attracting Chinese investors to India."The relative competitiveness of India compared to China is increasing, especially for Chinese companies to shift production from China to India in the automotive, chemical and electronics value added chain," Venkiteswaran said. For example, he said, imports from China have been 35 per cent costlier since 2013, and the cost of labour in China is increasing by 18-19 per cent since 2014, compared with 8-10 per cent in India.Chinese businesses have noticed. One of the most-shared articles in March on the Global Times website warned: "China should pay more attention to India's increasing manufacturing competitiveness".However, it is far from smooth sailing for Sino-Indian investment. India's attempts to gain market access in China for its information technology, agricultural and pharmaceutical industries have hit a wall for over a decade. India's deficit in trade with China bloated to $46.56 billion last year. Bilateral trade remains below the target of $100 billion that both sides were aiming to achieve in 2015. At $70.08 billion in 2016, bilateral trade was 2.2 per cent lower than the $71.63 billion in 2015. The CII-Avalon study forecasts that the trade deficit will hit $60 billion by 2018-19.In 2014, Chinese president Xi Jinping committed to a $20 billion investment in India over five years. If fulfilled, this would increase China's economic footprint in India. But it would still be a small percentage of Xi's more recent promise that China will invest $750 billion overseas in five years.(In arrangement with IndiaSpend.org, a data-driven, non-profit, public interest journalism platform. Reshma Patil is the author of "Strangers Across the Border: Indian Encounters in Boomtown China". The views expressed are those of IndiaSpend. Feedback at respond@indiaspend.org)