The 3rd of our Opinion articles in the Shanghai Daily:

Source: Shanghai Daily, Opinion Section, May 30th, 2007 http://www.shanghaidaily.com/sp/article/2007/200705/20070530/article_317673.htm

A critical yet edgy piece (very comparitive!) on whether China has the umph and brains to out-do India in outsourcing…  Highly doubt it! 

This piece was shared by friends of and contributors to 2point6billion, the China Economic Review Editors.  Thanks guys!

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The global outsourcing story has been a hot topic for years now. India remains its lead actor, with local firms like Infosys and Wipro hogging the limelight.

An emerging thread, however, has been China’s role in the so-called BPO (business process outsourcing) scene. This is a particularly juicy thread because it connects two of the biggest business stories in recent years, the ‘India outsourcing’ story and the ‘rising China’ story.

The general consensus seems to be that China is becoming an increasingly powerful player in global BPO, as befits its climb up the value chain from cheap manufacturer to sophisticated service provider. An Indian paper, DNA India, has this recent headline: “India being Bangalored by China”. Offshoring Times, a trade publication, has items headlined “Will India’s dominance wane?” and “China an emerging BPO hub.” A quick Google reveals plenty of similar articles.

A new report by Forrester Research seems to buck conventional wisdom. Here’s the summary from the website:

When Forrester first looked at China’s offshore and global delivery model (GDM) role nearly two years ago, the country was widely viewed as the key challenger to India for offshore supremacy. However, our latest research shows that to date the market has not taken off as expected. While there continues to be demand from Japan and multinationals with operations in China, the offshore business from the US and Europe has been slow to materialize. In fact, China’s percentage of GDM resources for the top services firms like Accenture has dropped, while India and the Philippines have seen far greater investment.

The report also sparked an insightful discussion at a Computerworld blog. Some of the reasons cited for China’s poor BPO performance were “high attrition rates, a lack of English-speaking workers, and inadequate intellectual property laws.” Commenter David Scott Lewis, a former analyst and now an executive at a China-based outsourcer, begged to differ: “Hey, analysts are not right about everything. But in both cases, they should stick to topics that they know. China is a topic that they don’t know, don’t understand. Their knowledge is way too superficial, idealistic, biased.” According to Lewis, all the factors Forrester mentioned were not significant.

The outsourcing business is ostensibly based on the bottom-line — how much money can be saved, how much more efficient can a process be — but perception seems to play a much bigger part in decision-making, at least on a global level. China’s ascendancy to the global outsourcing throne will not just be because of the hard data, it will also be because of image-making, hype and perception.

This poll conducted by the Chicago Council on Global Affairs and WorldPublicOpinion.org finds that “Less than a third of respondents in every country surveyed believe China’s rise will be ‘mostly negative’, with majorities in most countries anticipating a mixed or positive outcome.”  At the same time, “most Asians outside China, wary of Beijing’s military build-up, favor an ongoing U.S. security presence in the region.”

There’s a lot more to the article, so check it out…

a review on it at NewsWeek, China Will Soon Outpace America http://www.msnbc.msn.com/id/18906545/site/newsweek/

I’d be curious to see more polls like this on India.  Grateful if anyone out there would share such with us if you run upon anything.

Friend of 2point6billion, Jerry Stryker shares a comment on the rich Chinese.  Seems that all the little factoids churing out about the rich and how they got rich trigger some strange deep-down interest of ours hidden in the depths of our souls!  What’s yet more?  Let’s read on…

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Geoffrey York satisfies the urge to know more about millionaires and billionaires in China with this article in Saturday’s Globe and Mail (”Canada’s National Newspaper”), which includes such eye-catching tidbits as:

Over the past two years, the average wealth of China’s richest people has soared by 48 per cent a year;

The skyrocketing wealth of China’s tycoons is best illustrated by a former peasant and bricklayer named Yang Guoqiang, whose family fortune soared to an estimated
$10-billion after his company made its debut on the Hong Kong Stock Exchange last month;

When the owners of a hotel development company found five years ago that they were to be listed at No. 94, they disclosed their true wealth, enough to put them in the top five, where they’ve remained ever since;

All of China’s richest are first-generation entrepreneurs; none of them inherited any wealth;

Most of the richest Chinese people are relatively young, often under the age of 45, and a growing number, 35 of the top 500 on the latest list, are women;

Half of the top 10 richest people are property developers;

A political connection is still extremely helpful on the road to riches. (and a bunch of ‘interesting’ facts on this one but you’ll have to explore elsewhere for these…);

York has been working for The Globe and Mail since 1981 in a variety of positions in Canada and abroad.  He was Moscow bureau chief for eight years before taking over as Beijing bureau chief in 2002.

The full article can be found at: http://www.theglobeandmail.com/servlet/story/RTGAM.20070526.
wxchina26/BNStory/International/

Thanks for sharing these wacky facts with us Jerry!

First piece from our new contributor, Siddharth Soni whose blog ‘drumming’ http://profss.blogspot.com/, provides some very critical analysis on India’s education imperative.  His contribution is an observation and a selfless recognition of an important step that China has made to prioritize development (and improvement???) in education and the emphasis the government has placed on the need for training and producing more teachers.  A lesson to be learned for India perhaps but would India be willing and able to replicate such a model?

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Part-1

Chinese teachers’ colleges to offer free education soon

Yes, six of the top universities of China plan to waive all the expenses for students enrolled to become teachers and who’ve agreed to serve as teachers for 10 years after graduation. It is no small measure since it involves enrolling 12000 students and taking taking care of expenses to the tune of $5120 per student at least. And if this measure succeeds in the six universities, it would be implemented in other Chinese universities too. This initiative doesn’t just include imparting education to future teachers but it also ensures suitable employment in middle and primary school once students graduate.

Chinese premier, Wen Jiabao, sums it up in these words:

“The measure will demonstrate to the general public the importance of the teaching field, create an atmosphere of respect for teachers and education in society, increase awareness of the value of the educational profession, produce large numbers of outstanding teachers, encourage prominent educators to run schools and spur more outstanding young people to become lifelong educators.”

Another point to note is that most of the students would be from Central and Western China, which are relatively under-developed areas.

Few more lessons for India to learn.

source, People’s Daily article: http://english.people.com.cn/200705/19/eng20070519_376042.html

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and an outlook onto another facet of Chinese influence in the global educational arena…

Part-2

Some time back, in one of his articles ‘Laughing and Crying’,  Thomas L. Friedman narrated his experience at Rensselaer Polytechnic Institute, one of America’s great science and engineering schools. Here’s an important part of the article:

First I had to laugh. Then I had to cry.

I took part in commencement this year at Rensselaer Polytechnic Institute, one of America’s great science and engineering schools, so I had a front-row seat as the first grads to receive their diplomas came on stage, all of them Ph.D. students. One by one the announcer read their names and each was handed their doctorate — in biotechnology, computing, physics and engineering — by the school’s president, Shirley Ann Jackson.

The reason I had to laugh was because it seemed like every one of the newly minted Ph.D.’s at Rensselaer was foreign born. For a moment, as the foreign names kept coming — “Hong Lu, Xu Xie, Tao Yuan, Fu Tang” — I thought that the entire class of doctoral students in physics were going to be Chinese, until “Paul Shane Morrow” saved the day. It was such a caricature of what President Jackson herself calls “the quiet crisis” in high-end science education in this country that you could only laugh.

There you go, the all-conquering swamping Chinese. While the description by Friedman overwhelms the reader and sounds like, “What are these Chinese doing… They are manufacturing PhDs like they manufacture goods”, it’s significant for countries like China and India to get so many countrymen to study and indulge in research at a higher level since that could result in development of indigenous technology and ways and means of doing things. And that to my mind, that would be the real development.

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Thanks for sharing this Sid.  Look forward to the next one!

Another People’s Choice Winner at the same contest Panipuri by Thakkar

Thanks Shantanu!

Slideshow by Jeff Branman (Winner of the Best Presentation award at the “World’s Best Presentation Contest” ShiftHappens.  Shared by Shantanu at Global Themes blog http://global-themes.com/

Shared by our friends at the China Economic Review Editors Blog

India and China still have a fight to settle. In 1962, at a time when both were troubled developing countries, they fought a brief war over a section of territory that could be up to 90,000 square kilometers.

Through the end of October and most of November of that year, China advanced on what was then Indian-controlled territory. In late November, China declared a unilateral ceasefire. A formal ceasefire agreement was never drawn up. India says China still controls more than 30,000 sq km of its territory.

Depending on who you talk to on the ground in India, the remnants of the war are either little more than an annoying reminder of potential tensions between the two emerging powers or an enormous unmentioned elephant that has to be dealt with before the two countries can really get down to the business of trade.

In 2005, India and China agreed to a framework that would eventually see the territorial dispute settled. Despite increasingly amicable relations, however, the dispute is still officially in the books.

Now, after 45 years, India said the two countries are working to find a “final settlement“.

This is good news. No matter how good relations may be, there is still a wide streak of mistrust on both sides. Politicians do their best to overcome with a reasonably steady stream of mutual visits but the mistrust is still there. In India, Chinese often have to deal with suspicions and their products are often considered as cheap and second rate. The lack of trust also occasionally surfaces in China as well.

Last month, the two countries met for a 10th round of talks on the subject. The talks continue to move forward; even though little tangible news of progress has emerged, the fact that both countries are moving closer to a resolution is telling. These two countries are likely to be the most significant of the coming century and their willingness to settle old disputes amicably is a good sign of things to come.

Check out this review - posted on the Global Themes blog of friend and contributor to 2point6billion, Shantanu Bhagwat - from last week’s FT piece looking at the comparative scenarios of India and Israel’s IT industries by TN Ninan, editor and publisher of Business Standard (one of India’s leading business newspapers)…

I’d be curious to know what you all have to say about the likes of this comparison with China included…

In the article, Ninan noted that:

“…it takes a quick visit to Israel to put these signal achievements (of the Indian software industry) in perspective. At dinner in Tel Aviv with the man who advises Israel’s prime minister on economic policy, the subtle point is made to us that those armies of people walking every morning into the campuses of Infosys and Wipro are not in the same category as the large numbers of high-tech entrepreneurs being turned out by Israel.

…Israel has no fewer than 3,000 high-tech companies, supported by a flourishing venture capital industry that buys into garage-scale enterprises and takes them public once they have reached a certain scale. Last year alone saw foreign investors coughing up $10bn to buy into just 30 Israeli tech firms.

…more than a third of Israel’s total exports in some years have come from the high-tech area, and 20 per cent of the revenue earned by the electronics industry is ploughed back into R&D - some of which is a spin-off from the country’s massive investment in defence research.

…when you are told that firms in Israel have developed the voice over internet protocol (VoIP), Intel’s multi-core processor, the cellular telephone and most of Microsoft’s Windows NT operating system, and that the world’s electronics giants have invested much more in Israel than in India, Bangalore’s very creditable record begins to pale.

To be sure, Indian companies and the Indian branches of international firms have been doing more high-end work in recent years and helping to develop cutting-edge technologies useful for a range of industries. But for every product development claim that you can make on behalf of India, Israel can perhaps make a matching if not superior claim…”

Ninan’s footnote profile mentions that he is an award-winning journalist but this particular report was far from any award-winning news-story.

At the very least, it could have done with a little more homework…and in any case, a comparison between India and Israel is not simply apples and oranges…it is just PLAIN BAD.

Why do I say that?

The two countries have been on vastly different growth trajectories, have had very different business environment for several decades and share very little in common when it comes to development challenges…

To make it a more “apples with apples comparison”, you need to factor in (on the Indian side) an impoverished population of several hundreds of millions, stage of development, questionable government policies, problems of national identity, challenges of running a democracy on an empty (or partially-filled stomach) etc etc…Once you do that, India (surprise) begins to look much much better…or may be it is just the proud Indian in me rushing to India’s defense?

You decide.

P.S. I hope Barak is still talking to me after this!

P.P.S.  some critical opinions available on this at: http://global-themes.com/india-israel-bad-comparison/#comments