(This story originally appeared in on Nov 08, 2011)

AHMEDABAD: Chief minister Narendra Modi is often hailed as the CEO of Gujarat. Most of his moves have helped Gujarat Inc . But, his latest strategy to enter the dragon has ruffled feathers back home.

As Modi packs his bags for a five-day business-cum-political visit to China , there is growing unease among Gujarati entrepreneurs about the possible threat the dragon could pose to local manufacturing sector.

Modi plans to invite Chinese companies to set up shop in sectors like chemical, pharmaceuticals, electrical equipment and transformer manufacturing. Gujarat is already a manufacturing hub for many of these industries. The chief minister also plans to lure firms from the dragonland to set up ports and get into telecom equipment manufacturing.

"The Chinese thrive on subsidies and concessions. They will flood local markets with cheap goods. This will make life difficult for local players," said a Gujarat business baron who adores Modi both for his politics and economics.

Modi's critics have often accused him of favouring large business houses at the cost of small and medium enterprises, considered to be the backbone of the state's economy.

"Doling out sops to Tata Motors for its small car project is understandable. It was a prestigious project which helped strengthen Brand Gujarat. But, inviting Chinese players at a time when local players are struggling is not advisable," said another entrepreneur, adding, "Soaring interest rates and dropping demand has put pressure on our bottom lines. We can do without Chinese competition."

Modi's 20-member delegation will also meet top officials in the Chinese government as well as senior functionaries of the Communist Party of China in Beijing and Shanghai.

Already China's TBEA, a maker of high-voltage transformers, has signed a preliminary accord with the Gujarat government to set up a manufacturing facility in the state with an initial investment of Rs 2,500 crore in a phased manner. Also, Chinese telecom major Huawei has evinced interest to invest in Gujarat. Modi will visit the company's R&D centre.