Wednesday, April 20, 2011

Asian Parable through Indian lens

Right now, the world is definitely getting scared of the “Dragon and Tiger” hence it is the perfect time to explore the vast countries through different perceptive. Companies could understand the different dynamics of its people and markets to better structure its strategy. Exploring these countries would be like muddling through the largest river filled with silt that eventually ends in ferocious Ocean. Chinese are as complicated as their language; their culture is as intriguing as Mandarin’s script. I admire something about China that India will find it very difficult to build in the next decades to come for which it to develop socially and economically. That something is being “Chinese”. It’s the only largest country on the earth which has similar culture, understand the same language across the length and breadth of the country. People take immense pride in being Chinese to defend their language, culture and cuisine. On the other hand, India is the only country on the planet that is very diverse with so many languages, many religions, cuisines, etc.
Although India and China has been in logger heads over the border issue for several years, there are quite a lot of cultural similarities between India and China. It was India which exported the Buddhist religion and principles to China. Although currently India is majority Hindu, Buddhist values are still alive, for instance the India’s national flag bores the symbol of “Asoka Chakra” that describes 24 principles of human life. Some common values of Chinese and Indian people are respecting elders, parents, and teachers and placing high premium on education. Relationships in both countries are very personal and strong, people tend to compromise something to keep the relationship. Chinese people tend to respect “erudition” because it is also one of the principles of Confucianism likewise Indians. Hence education system in China and India is more or less the same. There is a humungous focus on rote learning to excel in some of the most gruelling entrance examinations.  The creativity in Chinese and Indian system has been suppressed for sometime but it is being revitalised by the influence of American soft power. We can’t presume everything to be similar in Chinese and Indian culture.

Chinese cuisine is completely different from Indian cuisine; almost all the Chinese like to eat meat and fish but most of the Indians are vegetarians. One of the most striking differences is in governance, Indian system is democratic but Chinese chose to be communist with a single party rule. Nobel Laureate Amartya Sen says in his book “The Argumentative Indian” only democracy in India is the natural way to govern because of immense plurality in the society but in the case of Chinese they tend to accept the rule of concentrated elites with market based economy.  This fundamental difference in governance can be witnessed among majority Chinese being “collective” and Indians being “consensual” respectively. There are subtle differences in terms of nationalism, language pride and openness to foreign cultures. Historians agree that India is always a land of immigrants hence anything foreign looks superior to Indians that’s also the consequences of “Colonial Hangover”. China was never totally under foreign rule, so there is a pride of being Chinese hence they may not very much open to foreign culture and language. Chinese tend to place larger premium on creating wealth that’s why wishing prosperity takes over wishing happy New Year on Chinese New Year. In general, Indians might be placing higher premium on happiness over wealth but it is certainly changing in the society that is purely creating wealth through entrepreneurship. These cultural differences are creating totally different dynamism in Chinese and Indian economy.

China and India used to be one of the largest and richest economies in the world before the advent of colonialism.  History might repeat itself if these Asian giants once start to download those necessary applications that west has installed in the past. Those applications are modern science, the rule of law and private property rights, modern medicine, the consumer society and the work ethics. In all of those applications, Chinese and Indians tend to differ in the way they are downloading and also in the way they are implementing it. In terms of installing modern science, Chinese are much faster than Indians; they have built fabulous infrastructure and great universities for research. Although India has one of the greatest elite universities that are on par with ivy leagues, majority of Indian citizens still lack the basic literacy skills. It is the failure of Indian democracy that is rotten with inefficiency but Chinese got those priorities right by educating 94% of its masses. So, future is bleak for Indian economy that has the youngest demographics in the world if it fails to educate its young population then the demographic dividend would turn into demographic disaster.

 Indian system will prevail in the long term in installing “rule of law” because the institutions are accountable to the people but China will face challenges in the future to implement fair system. India is still classified as high risk for diseases by CIA for travellers but China is not that reflects the installation of modern medicine and its implementation. India has a long way to go forward in terms of achieving high health standard. Chinese and Indian consumers are becoming as dynamic as any developed western consumers hence both countries are already reaping the benefits of this downloaded application. Although the work ethics in both countries are respected but the productivity level is one of the lowest. It is one of the reasons of their products is being considered inferior to western brands. It is definitely going to change in the near future once majority of their people start to plug and play with the globalized world.

 As an optimist, the next generation of growth, newer ideas and businesses would definitely germinate from “East” mainly from China and India since they are starting to install those essential applications. The suggestion of cooperation between these two resurgent civilizations could sound preposterous but it is indeed essential for peaceful and prosperous Asian continent. The cooperation between these two Asian giants is very integral to the 21st century and humanity on the whole because the history has never seen so many people moving from poverty to prosperity.  This massive migration of people to prosperity would create large scale economic opportunities to companies and countries to tap. Subsequently, this so called wealth amassing also creates the superficial ethical standard of “greed is good”.

Although China and India has different political system but they have the same problem of intolerant levels of corruption in public distribution system, land reforms, and business regulation and in any kind of administrative red tapes. In China, state owned companies are creating wealth and also mess by not allowing other companies to become competitive. In general, foreigners could assume that the entire nation is run by the bureaucrats not by entrepreneurs. On the other hand in India, both private and public sector is involving in rampant corruption. Entrepreneurs are the only ones who are milking the benefits of economic boom and there is no trickle-down effect to the bottom of the pyramid. As a matter of fact, both countries particularly India has a long way to go before it becomes as competitive as Europe or USA.  World particularly the developed world of Europe and USA has something to offer to China and India and also get something in return.  

Europe could leverage the growth of China and India to keep its society prosperous. It is not a zero sum game moreover increasing prosperity would definitely create opportunities for trade across the border. The Companies could continue to build capacities in these countries to sell their products. They can also recruit some Asians in the management to inject differences in the ideas. Companies would indeed find it harder to do business in both China and India although it has huge market. In China for instance, companies would be much wary of intellectual property loses. In India, it would be frustrated by the red tapes in the bureaucracy. Hence understanding the observations of similarities, differences and needs of these two countries would definitely give a better scope for refined business strategy. This can be purportedly achieved through very diverse work culture that companies has beginning to launch.