Having spent the past two weeks with senior leaders of both the Indian and Chinese Governments, (India: The PM, Minister of Finance and Minister of Commerce; China, similar but at Vice-Ministerial level) the obvious theme to embark upon are the similarities and differences between them. The problem is, I don’t know where to start. So lets begin with some observations. Firstly, Indias British problem. With meeting the Prime Minister and Finance Minister, the delegation I was with was lead by the Economist Group, with one of their senior editors from London, moderating. To be honest I found the chap unbearable in his condescension - ‘witty’ remarks about the Finance Ministers surname, not to mention an almost audible recoiling at having to talk to a ‘chap in a turban’ (The Prime Minister) seem to me to show that the British educated elite still have a long way to go in catching up with globalisation and the fact Empire ended 60 years ago. India I don’t think has a problem with Britain - it’s Britain has has a problem with India. You simply don’t make personal - not to mention somewhat stupid remarks like that unless you are very good friends and are in relaxed surroundings. England once used to be known for it’s adherence to civility and discipline. Now from Eton and Oxbridge we are churning out spoilt thugees whose insecurities delight in demeaning others. Note to the Economist: Even being a thug is an old Indian trade long ago discarded.

Regrettably I do tend to find the British somewhat intolerable and increasingly second rate in their expatriate professionalism these days. The nation is turning out second had car dealers masquerading as businessmen, as in the case of the Treasurer of Britcham in China not actually being registered with the Chinese authorities, and the development of little ‘cliques’ with the organisation. It’s shabby, and shows - in both countries, Britcham is somewhat ‘for the lads’, protectionist and insular. Britain, alas, is sadly becoming small, and small-minded. But enough of the disgruntlement. There are bigger fish to fry.

Much more impressive indeed were the Indians, and the Chinese. Where both differ from the Brits is the can-do, forward-thinking mentality - which both governments displayed in spades. India, with Sonia Gandhi as the essential power behind the throne, opted for Dr. Manmohan Singh to lead the country. An acclaimed economist, and with the support of of one India’s most senior legal counsel, Mr. P. Chidambaram as Minister of Finance, and another home grown economist, the charismatic Kamal Nath as Minister of Commerce, has, intriguingly, a team of professionals, rather than career politicians leading the nation. As Mrs, Gandhi deals with the diplomatic fall out from having to sew together the countries democracy, one can only imagine the behind the scenes wheeling and dealing that takes place on her behalf - leaving the triumvert of Singh, Chidambaram and Nath to get on with what they should be doing - leading the country forward. Capable ? Ethical ? Successful ? Well, as they say, time will tell, and for this observer at least, the current fiscal policies appear to make sense, are backed up by sound previous work, and have a large degree of transparency and pragmatism. I liked the gentlemen in power, and thats always a good thing when dealing with a democratic and forward thinking government. There is a humbleness about the Indian government, yet backed up with a steely resolve to get things right for their nation. It’s a heady brew. I wish them well - for I have a vested interest in doing so - but I do think they are on the right track. And as a believer in peace through trade, it’s great to see the Indians begin to play an increasing part in the global community.

As for the Chinese, well, business-like, and very focussed. Again, with a one-party state it can be simple to assume that with no opposition it’s easier than running a democracy. Somehow, with a country the size of China’s, I rather doubt that to be the case. But the Chinese are intent on moving up the value chain, and in the past seven years of meeting them at this level, never have I seen the various Ministeries so united in their policies. While Jiang Zemin and Zhu Rong Ji acted as salesmen to the West, Hu Jintao has the job of solidifiying their legacy, consolidating it and using the initial thrust of opening up to continue China’s development. Consequently, there are a lot of issues that need fixing internally, and this regime can appear as a result to be more inward-looking. To some commentators, that equates to a withdrawl from foreign investment policies. But I don’t buy this. China now needs to clean up some of the initial mess inevitably created by the first stages of reform, and wisely, is doing so. Three main problems exist for China: The spreading of wealth into the rural areas to kick start Chinese consumerism (and in so doing reduce the trade deficits it has with pretty much most of the world), the moving of Chinese commerce further up the value stream and away from low-cost manufacturing, and the curbing of energy intensive and polluting industries. In short, China is growing up. What impressed me was the unity these days behind these thoughts, and that to me equates to China being able to make this transition. This year, 2007, is a watershed year for the Chinese, with some events taking place that point the intention of the government and the way forward in it’s thinking. A little reported change was announced during last months National Peoples Congress. Property (land) can now be owned by individuals. That is a radical step away from Communism, and required a change in the Constitution to achieve. The implications, in strengthening the legal system and the democratic process to achieve this step, have far-ranging consequences, and while many in the West only look at how China treats foreign investors, the truths behind it’s evolution reside in how it treats it’s citizens. They can now own property for the first time since the founding of modern China, and that has to be a good thing. China remains open for business, and is forging ahead. It is also a country for it’s people.

So what of the changes ? India still is playing catch up, and while GDP figures continue to rise, it’s the darling of the investment media. The reality is that while there is a long way to go, and I believe that the Indians are on the right track, I can also see that the Indian economy will start to inherit some of the international investments that China is now moving away from. Low-cost manufacturing, energy inefficient and polluting industries,  if legislation is not in place to curb the worst of these, India will still achieve short-term growth, but with a price to pay later. I can imagine a scenario in 15-20 years where American congressmen are up in arms over Indias balance of trade deficit rather than China’s, and the US needs to accept that if it wants globalisation then it has to put up with some uncomfortable home truths. The US has to develop sustainable businesses too, and if it is the way of the world that a bushel of wheat costs less to grow in India to place on the world market, American farmers are going to have to develop new crops. Thank goodness for ethelyne.

So to summarize: Yes, both governments are on the right track and will continue to move ahead. These are significant developing countries and they will forge the way the next century looks and behaves. The US needs to adapt it’s economy, while the Brits need to get out of their shorts and into grown-up trousers when dealing with such markets.

This entry was posted on Sunday, April 1st, 2007 at 2:18 pm and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.