CHENNAI: Claiming this as the first project to be set up by Indian engineering industry in China, company MD, Suresh Krishna told reporters on Thursday that the Chinese subsidiary would have an installed capacity of 6,000 tonne per annum. The Chinese subsidiary would be manufacturing and marketing high tensile fastners to the Chinese automobile industry which was poised for a 20 to 40 per cent growth in the coming years. The idea was to "crack the Chinese market first" and later meet the import requirements of neighbouring Taiwan amd Korea from the Chinese manufacturing base, in which the company proposed to further invest another $12.5 million, subject to market response and conditions, Krishna said. The factory to be located at Haiyan Economic Development Zone (HEDZ), Haiyan county, Zhejiang province in South China would be manned by almost cent per cent Chinese employees within four to five years of operation, he said. Krishna said dealing with Chinese bureaucracy was an encouraging experience, adding that the new venture was given a variety of incentives including "encourage sector" classification for concessions like 100 per cent tax holiday for two years, 70 per cent for third year and 50 per cent for the fourth year. He said the land for the project was procured by the Chinese Government paying 100 per cent compensation to the local farmers and handed over to the company at half the cost on a 50 year lease. In a major incentive, the company's effluent treatment was offered to be handled by the province, he said adding that infrastructure in China was "far, far ahead" than that of India resulting in FDI inflow to the tune of $40 billion as against just $4 billion in the case of India. He said initially the company would be procuring raw materials locally and if need arose, the same would be imported from nearby Korea and Taiwan.