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China versus India



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IPI_Marker

Friends:

I think on this forum we have had discussions on China Versus India.

I am sure, therefore, that this report from the Businessweek will be read
with interest.

Ram Narayanan


http://www.businessweek.com/bwdaily/dnflash/feb2002/nf20020214_1098.htm

BUSINESS WEEK ONLINE

FEBRUARY 14, 2002

REPORTER'S NOTEBOOK
By Manjeet Kripalani

An Indian's Epiphany in China

On my first visit to the Middle Kingdom, the drive for 21st century
world-class status I saw was stunning. Still, some things were missing


>From the bridge over the neighborhood known as the Bund, Shanghai rises on
either side of the Huangpu River like a magnificently plumed bird on the
wing. Before me lies a breathtaking vista: the globe-shaped conference
center across the river, the restored colonial buildings, shining glass and
granite towers in the distance. Think of New York and Paris and Singapore
all rolled into one -- but far more impressive. This is my first visit to
China, and this will be my lasting impression -- a nation that's literally
taking flight. One cannot see this without thinking that maybe the 21st
century really does belong to China.

Such feelings aren't confined just to Shanghai. Visit Guangzhou, Beijing, or
any one of the innumerable cities that the Chinese have resurrected or
re-created, and they all evoke the same sense of wonder. It's hard to even
believe another China still exists.

The other China? The millions of citizens who have been displaced by the
building of the Three Gorges Dam, or the peasants in the hinterlands who
don't have access to medical care, or the students who aren't allowed to
protest, or the contemporary writers and artists who are lucky if they don't
end up in jail. Gazing upon Shanghai, that China is subliminal. Here's the
China that makes the strongest impression on visitors, with its gleaming,
explosive growth.

HAUGHTY DISDAIN.  I didn't know what to expect before I arrived. Having
lived in India for the past five years, I feel I've lost the American sense
of renewal, and instead adopted, by osmosis, India's ancient attitude of
haughty disdain for the nouveau. Indians think little of China's brand of
communism, and highly of their own chaotic democracy and freedom. China,
they say, can aspire to be like America, but we will aspire to be more like
our glorious ancient past, only with computers, cell phones, and movies.

India is living with that choice. It may have the power of the vote but not
the power of investment dollars to fuel significant growth. Direct foreign
investment in India is a mere $2.4 billion annually -- compared with $45
billion a year for China. But India is in no hurry. It has a sense of
timelessness, and renewal through rebirth in another lifetime is enough
consolation. An arguable viewpoint, but an expression of traditional Indian
philosophy.

Still, it seems like a day hardly passes without India's competitiveness vs.
China coming up on the floor of the Indian Parliament. Last summer, the
leading industry association in India, CII, took 10 Indian Parliament
members and two union leaders to visit the Middle Kingdom. Indian businesses
have been hurting from a flood of cheap Chinese toys, electronic goods, and
chemicals that hit the Indian markets in the past year. So industry leaders
wanted the politicians and the unions to witness China's economic miracle
firsthand.

"BAMBOO EFFECT."  It was a smart move. Just seeing what's happening in China
with your own eyes is worth a million reports or speeches. In August, Indian
Privatization Minister Arun Shourie made a passionate plea for India to stay
the course on economic liberalization for fear that China would "overwhelm"
it. That, coupled with China's increasing interest in replicating India's
software success, has had what Indian economist Surjit Bhalla calls "the
Chinese bamboo effect" on India's collective behind.

India has finally woken up to the China challenge. The government has since
been on a spree, liberalizing infrastructure and privatizing state
companies -- not fast enough, but movement nonetheless.

Seeing is indeed believing. The streets of China's big cities are wide,
tree-lined, and pristine. It is First World. Every building and factory I
saw was equipped with the latest technology. I saw new factories being built
in Guangzhou -- high-quality construction and superefficient, with one floor
being built in 3 days, vs. 11 in India.

SNAZZIER THAN PARIS.  And Shanghai. I rejoiced for the Chinese people when I
saw Shanghai -- they deserved this pride after decades of communist
dreariness. The city seemed more fashionable to me than Paris. O.K., Nanjing
Road may not be the Rue Faubourg St. Honore, but it sure is dazzling, with
five-star hotel chains, malls featuring six-piece orchestras instead of
Muzak, and international designer stores such as Fabergé, Ferragamo, and
Ferré.




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Chinese come to Shanghai and expect to see the world
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Shanghai's French quarter has chic Taiwanese art shops and elite schools. On
a sunny Saturday morning in February, the streets are filled with smartly
dressed young people. The young men are handsome and carelessly casual, the
young women are beautiful, elfin-thin, and cutting-edge trendy. Every nook
and corner of the commercial district is crammed with goods -- toys,
clothes, electronics. Consumerism reigns. A friend explains that because not
many Chinese travel the world, they come to Shanghai and expect to see the
world there.

Some friends in Shanghai tried to bring me back to reality. The city is
window dressing, they caution, a stage set. The real China is nothing like
this. In rural areas, joblessness is common -- as are 12-hour days for those
lucky enough to find work. Dissent isn't allowed. Traditional Confucian
values of obedience have made adapting to Chinese-style communism easier,
say local market analysts. Family rules are very strict, obligations and
ties to parents are strong, much like India.

NEW BREED.  It's slowly changing. China's youth may not participate in
political protests, but a sexual revolution is under way. Young Chinese have
become more casual about sex, and pairings not leading to marriage are
becoming more common. What's important now is money. And an education --
plus a grasp of technology and English -- beget money.

Indian companies have certainly figured out that China means money. Indian
info-tech-education companies NIIT and Aptech are already in the Middle
Kingdom. On Jan. 22, software developer Satyam opened its first office in
Shanghai, and a week before that, while on a trip to India, Chinese Premier
Zhu Rongji granted permission to top Indian software company Infosys to hang
a shingle in China.




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Visiting the Indian consulate was my most depressing moment in China
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Stultified Chinese bureaucrats have given way to a new breed that act as if
they were ardent entrepreneurs. Professor Hu Hongliang, whose last posting
was in China's consulate in New York, is now in charge of setting up
software parks across the Middle Kingdom. He's charming, persuasive,
accommodating, smart-suited. His officer, Robert Lai, is an
American-educated professional who has returned to his native Shanghai after
a decade. He has memorized all the statistics about China's infrastructure,
and what he doesn't know he finds out in minutes.

Hu and Lai were a refreshing change from my meeting with Indian diplomats in
Shanghai. Sad to say, but visiting the Indian consulate was my most
depressing moment in China. The office is stark, adorned with a hidden
magazine rack that holds issues of India Perspective -- whatever that is.
Hanging on the wall was a framed picture of the Taj Mahal, the 16th century
Mughal monument to love, and another picture of Indian village belles.

BEYOND THE TAJ MAHAL.  This bothered me: The Chinese come to India to learn
about IT, Indian tech and pharma companies are opening new offices and
factories in China -- and all one sees at the office of the Indian
government in Shanghai is a picture of the Taj Mahal? Dare to mention this
dissonance to Indian diplomats, and you're likely to get your head bitten
off. "What's wrong with the Taj Mahal?" asks an Indian official with
self-righteous hauteur. "Are you trying to deny your heritage?"

Of course not, I thought wearily. Nor am I denying India the glory of the
Taj Mahal. But the new India is much more. It's exportable, Oscar-worthy
Bollywood movies, it's a vibrant pop and youth culture, it's IT, its pharma,
its great companies like Hero Honda, it's dedicated companies like Tata and
Birla, it's ambitious upstarts like Reliance Industries, it's cyberabad
Hyderabad.

Many representatives of that new India are applying their expertise to
China's benefit: The head of Coke in China is an expatriate Indian, the head
of ICI Paints is Indian, Indians dominate the senior management of Sara Lee
and Danone -- the list goes on. India is more than village belles and the
Taj Mahal.




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India needs China's vision. And China needs the kind of people India has
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