This post is based on CHINDIA by Peter Engardio in 2006.
CHINDIA chapter 2: Characters of China and India
- Investment
China built its infrastructures first such as office towers, hotels, luxury villas, expressways,container terminals, airports, shopping malls, and public parks in a massive way. China designed to mobilized massive amount of capital.
India doesn’t use the investment like China did. In india’s major cities, by contrast, one feels stuck in a time wrap. Few new manufacturing plants are found outside the big cities. But some economists think India can sustain high growth longer, especially as savings and foreign investment increase. The cost of lowinvestment, however, has been slower economic growth, fewer people lifted out of poverty, and an industrial base a fraction of China’s size.
- Market Power
China and india are among the world’s most important consumer markets. The differents are, China’s capita income is triple bigger than India. India’s consumer class prefers quality goods at low prices. India is proving ground for companies selling 5-cent packets of shampoo, 2-cents-a-minute cellular service, and $100 PC.
- Industry Strength
In 2000, China exported $30.5 billion worth ofhigh tech products, in 2005, that rached $220 billion, 28% of China’s exports. With prices of Chinese-produced goods generally 30% to 50% below those in the U.S. critic claims the yuan is undervalued at least 30%. There is some truth to these charges. Intellectual property theft and dumping at below fair market prices are rampant. The low cost of China’s immense labor pool apply to first-rate engineers, managers, cargo handlers, and office staff as well as factory laborers.
What about india? India has its own power, those are valuable software design, and services. India’s economic role is better hidden. A hot Motorola wireless handset, Cisco network switch, or Philips imaging device may read “Made in China”, but much of the software and integration of multimedia technologies that yield the real profit margins may have been developed in India.
While most of America sleeps, Indian finance, marketing, and technical professionals perform the gamut of skilled work for U.S corporations. India’s proficiency in software and computer science is proving to be its entrée into the full spectrum of industries.
- Social challenges
Since WW2, China as a communist state, india as a democracy newly independent of a Britain-leaders of both nations have faced a similarly daunting dilemma: How to feed and employ immense, rapidly growing, poorly educated, multiethnic, improverished populations?
By unofficial estimates,200 millions Chinese and Indians lack full-time employment. So, china and India need strong, and sustained growth to keep living standards from deteriorating. Both nations face potential health crises. China could have as many as 10 millions AIDS victims and India 20 millions. China and India also face a demographic time bomb, India should manage population expected to reach 1.7 billion by mid-century.
- Business Culture
China’s business culture remains remarkably untransparent and tethered to the state. No media, including internet sites are free of government oversight nor are labor unions or even significant business associations. As a result, business success in China still requires careful nurturing of guanxi or connections with communist party officials and power brokers.
India’s business culture can’t be more different. Austere rule and suffocating bureaucracy prevented entrepreneurs from investing aggressively until the 1990s. national and local government agencies ignored physical infrastructure and did little to help industry with subsidies.
to be continued…
T Y W O R D S 