It does not matter how many business deals India has with China. What matters is how strategically it matches every Chinese move. China will not overlook Pakistan and also not give up efforts to encircle India in the process
The Silk Road is mysterious, dazzling, posing hopes and some fears, but ultimately unavoidable. India has trudged it for millennia, traded heavily, earned gold but also lost to some marauders as well. Has that changedIJ Is Prime Minister Narendra Modi changing that with business deals, the gift of a Bodhi tree — the eternal source of knowledge — or is the path still besotted with the age-old border issuesIJ
It is indeed a difficult and charming route. The coming century is being viewed as the era of the Chinese. The earlier two centuries were marked by the prowess of the UK, Europe and the US. The US still remains in reckoning. Russia, affected by the sanctions of the West, has also started looking towards China and acknowledges its rise as an economic and military power in the region and beyond.
The southern neighbour, India, cannot run away from the growing might of China. It has two options: Either to ignore it completely and get into a Utopia or live with it with caution and gains through healthy participation and subtle moves.
India is also said to be growing. Its projected growth at eight per cent would be faster than China’s falling growth now veering around seven per cent. It sounds good to see India trudging ahead. There is difference in the volume of economy of the two countries. India, despite lots of progress, is yet to match China’s economic might. India’s manufacturing growth remains low while China’s is on high trajectory. Yes, critics can say China also has slowed a bit. That is no consolation.
The economic dynamics is still favourable to China and is much ahead of what India is planning. India has to learn a lot from China. Its business strategies are in perspective. It has an energetic bureaucracy, not merely a political leadership that is proactive. It has a business that knows how to penetrate deep into the psyche of its competitors and win over nations.
That is what India needs to be apprehensive about. Chinese businesses during the last year have almost bagged 60 per cent of the total standardisation certificates issued by the Indian Standards Institution. It demonstrates that the Chinese business is serious about giving tough competition to India in the latter’s backyard.
So far, Chinese goods were merely a ‘cheap’ buy. Now, the price advantage is being offered with quality. Indian business has to look for strategies to unseat the competition. Chinese businesses had done that long back in Europe and the US. Manufacturing of utilities there were cornered long ago with this strategy — lower price and tolerable quality. It suits the new use-and-throw culture.
Indian businesses have been a bit too dependent on the Government. The Government has been protective, be it during the licence-permit raj or in the era of liberalisation or any other period thereafter. Businesses gobble up public money for their ventures and never return the money, leading to a whopping three lakh crore rupees’ bank non-performing assets (losses). This is in addtion to another few lakh crore rupees that go into Government subsidies and tax reliefs. Often enough, it has turned out that the nation’s loss has been the individual’s gains.
China sees it in a different light. Indians often believe that Beijing wants to capture the Indian market. Chinese businesses have virtually done it. But China has also taken care to do so in many other markets — all of Southeast Asia, Pakistan, Sri lanka, the Maldives, Myanmar, West Asia, and now Africa.
For increasing global business, China goes to any extent, mixing, diplomacy, gunboats, and aggressive postures at international and UN bodies. India has to match the offensive and not be just satisfied with the gains of some contracts or deals for building hi-speed train tracks and asking China to contain the balance of trade skewed in favour of China.
The 10th Annual Business Confidence survey of European companies in China, prepared by the European Chamber of Commerce, shows business discontent. More than half of the 552 companies surveyed have been in China for over a decade. The companies largely have apprehensions as China is becoming stricter with its norms on finances and to pollution. They feel China is becoming ‘less business-like’. India may see an opportunity here. It also has to learn from China of the fact that a liberal business attitude is often taken advantage of, and harms the host.
On the human resource front, rising labour costs are on the top of the mind in 31 per cent of the executives, as compared to 28 per cent on the issue of shortage of talent.
India is mulling changes in labour laws to help companies put their tents in the country. Can we learn from the Chinese experienceIJ Remember, the worst labour law violators are the Western companies.
It does not matter how many business deals India has with China. What matters is how strategically it matches every Chinese move. China has eyes on West Asia and Europe. It will not overlook Pakistan and also not give up efforts to encircle India in the process.