China targets investment in Indian Railways

Why China is targetting private investment in Indian Railway Sector? How much beneficial would it be for Indian economy?

Background

Deng Xiaoping, the architect of modern China as he is known is immortalized by his famous saying, "to get rich is glorious"* which started an unprecedented era in Chinese economic growth. Chinese are shrewd businessmen always on the lookout for investment opportunities while India is the next big growth story in the world which is predicted to overshadow that of China. China has already overtaken USA as the largest economy in the world** and is transitioning from a manufacturing based economy to a consumption based one and at the same time expanding its influence geopolitically ? 

What is the best way to do so ? Investments. Overseas Investments have long been used by countries to increase their influence abroad the best examples being Post WW II USA and post 1970 Japan*** 

Go out policy

Chinese government is increasingly encouraging Chinese firms and State Owned Enterprises to invest overseas under the aegis of its Go Out policy. China has amassed trillions in foreign reserves that is it now strategically investing in developing countries to aid in their development. This is the best way to make allies suppress hostile attitude towards a country. 

Source: Breaking down China's overseas investment, Part I: The makings of a global phenomenon

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Why invest heavily in India?

There are multiple reasons why China is looking to invest heavily in India. 

1. Excellent Investment Opportunity: As I said before, India's growth story is expected to overshadow that of China [1]. China just like many other countries is vying for first mover advantage while investing in India. They expect high returns on their investment in Indian infrastructure especially the Indian railways because Indian Railways at present is archaic and needs modernization. 
2. Showcasing technical expertise: It is not just about investing in the railways in terms of money. China has developed expertise in building and managing high speed railways and it wants to become a supplier of technology and technical expertise to the world. Nowadays, when a country wants to build high speed rail, they look upto Japan and Germany for help.China wants replace them. 
   
   What better way does China has of showcasing this expertise to the world that to modernize the largest railways system in the world? 
   None
   Investments in railways will help Chinese firms bag supply, construction and maintenance contracts that will help them showcase their potential to the world. Closer Look: China's High-Speed Rail Diplomacy Hits Full Speed
3. Geopolitical leverage: Both China and India are emerging superpowers in Asia and India is militarily and economically ( sometime in the future may be ? ) capable to challenge China's dominance in Asia. 
   
   

   Source: China Daily 
   

   

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   India's really close relations with Japan and USA puts China at a difficult position in Asia. Heavily investing in India is an attempt to reduce Japanese and American influence in India, an influence they have built by investing in India in the first place. 
   
   India is not unique to China's plan. China has been strategically investing in Africa for a very long time to reign in American influence in the region and it is actually working****. China has been able to curb the influence of Japan on Myanmar and Thailand by investing heavily in infrastructure development in them. [2] [3]
4. High speed rail diplomacy: Renewed Chinese interest in India is also because of the long standing border dispute between countries. Increased bilateral trade gives China a lot of leverage while negotiating over the border dispute. Strong arm diplomacy has been very effective in the past and China intends to use it in future negotiations. 
   Thomas Friedman once said, 
   
   

   No two countries that both had McDonald's had fought a war against each other since each got its McDonald's

   
   He might have exaggerated the influence McDonalds there but bilateral trade is a great stabilizing factor and a leverage during negotiation in international economics.

China is not just investing in railways. It is investing comprehensively in IT and other sectors under the umbrella of one of its expertise areas-building and running SEZ's. All these are to achieve the goals I just described.[4] 

Would India benefit from them?

Hell yeah. We are a country of immense natural and human resources and we need investment to develop. McKinsey and Company estimated that India needs $500 billion in logistics investment to become competitive against China.[5] We do not have that kind of money ! The only source is FDI's and as such any FDI in this sector should be welcomed. 
Yeah, cynicisms persist, Chinese firms will benefit  . . . .  but in the long run, India benefits, thousands of jobs will be created, local industries will develop and India will prosper. 
All the national security threats posed by Chinese investments into India are nothing but a figment of our politician' imagination. Hopefully now that we have a pragmatic Prime Minister in Narendra Modi, things will change.