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CII seminar sells Chinese dragon to Indian tigers

Papri Sri Raman in Madras

For a change there was no China bashing at a gathering of the Indian industry in Madras, and no one rued the fact that Chinese umbrellas, batteries and locks and keys are flooding the country.

Instead, speaker after speaker at a seminar of the Confederation of Indian Industries sought to sell China as a business destination and demolish the mental block that Indians have about that country.

Do unto China what it is doing to India, R Gopalan, in-charge of foreign trade in northeast Asia in the ministry of commerce, said, as he urged Indian industry to zero in on the huge Chinese market with its 1.29 billion people.

He said there were abject lessons for Indian policymakers from China's emergence as an economic powerhouse, and they must get their act together fast if they wished to get anywhere near its eight percent GDP growth rate.

"The biggest investor in the infrastructure sector in China is the government. It has spent $190 billion building roads alone," said Gopalan.

Even in the IT sector, China was far ahead: it sold hardware worth $59 billion whereas India could not even cross the $1 billion mark, and it sold more than four times as many PCs as India, Gopalan said.

In cotton textiles export, India could not hope to match China, which grows 943 kg of cotton per hectare to India's 321 kg, he said.

Gopalan said despite the yawning gap with China in the cost of production of virtually everything, there was still a ray of hope for India. "With China entering the WTO in Doha, it would possibly withdraw from non-profit making sectors like cotton textiles and several manufacturing areas.

"It would be India's chance to enter these sectors likely to be vacated by China by 2007, if Indian policymakers begin to move towards this objective right now."

He said China, despite its Communist regime, had achieved its economic standing because of "the stability of its government and gradual policy changes." In the domestic economic sector performance chart it ranked second to India's 14.

It has kept inflation at less than four percent, down from over 12 per cent in 1996, compared to 12 percent in India.

The country has outranked India in virtually every field from foreign direct investment, savings, national debt efficiency to current account balance, and even fiscal policies and openness, environment management and protection of its intellectual property rights, Gopalan said.

He said the governments in China's 22 provinces made their own trade and economic laws with the result that the provinces had become "test laboratories" for policies that were tried in the rest of the country only if they proved successful in the nurseries.

Contrary to the general impression that labour was underpaid in totalitarian China, their average earning was $1,000 per year. Besides, a social support system takes care of the unemployed.

He said business application clearance took less than two weeks in China, unloading less than six days, complaints were attended to in six hours and to top it all it had investor friendly officials.

R Chandrasekhar, chief financial officer of Essel Propack, S Bhowmick of Samcor Glass Ltd and R N Murthy of Tata Steel vouched for the welcome they were given in China.

Essel Propack's Chinese venture began in 1997 with an initial investment of $6 million. The company produces laminated tubes to hold toothpaste.

Chandrasekhar recounted how the Chinese appreciated the futility of importing empty toothpaste tubes from India and gave him the licence to manufacture the tube in his first Chinese factory within months.

Essel broke even in a year and today it has three factories in China, with 300 Chinese employees, two Indian officials and a turnover of $40 million. It is today the biggest such company in the world.

"The Chinese experience has been memorable," Chandrasekharan said.

Bhowmick's experience with China has been no less remarkable, selling black and white and colour television glass, monochrome glass for PC monitors and picture tubes for which, he said, there is still a big market in that country.

"Following allegations that the Indian glass had high lead content, the Chinese checked out our glass thoroughly, and after a three-month investigation declared the western allegation as completely false. We had to meet their specifications and make some changes but the safety standards only benefited us," he said.

He urged more and more Indian companies to do business with China. The trade volume between the two nations is nearly $2 billion at present.

Indo-Asian News Service

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