(Running with the Dragon by Saibal Dasgupta: Published by Penguin Random House)
How on earth can Indian businesses compete with the Chinese? Aren’t their products so much cheaper than ours that even images of our Gods are imported from China? How do Indian firms counter such cutthroat competition? How should India’s policy makers view the Chinese challenge? This book by Saibal Dasgupta, a business journalist based in Beijing for the last fourteen years, gives us some answers to these tough questions.
China offers immense opportunities for Indian businesses. And yet, about 42 percent of Indian companies present in China have invested Rs50 crore or less, according to a recent survey conducted by the Confederation of Indian Industry and Evalueserve. Canara Bank, Union Bank and Bank of India have closed their offices in China. India Tourism hasn’t even bothered to further its Incredible India brand in China.
It is in this context that Dasgupta says, ‘The foot-dragging demonstrated by Indian companies in the face of opportunities in China is astonishing. Chances are not limited to extending Indian business operations in China. But there is an opportunity to go global on the backs of Chinese companies that have already crafted a place for themselves in different parts of the world.’ He asks why, for example, Indian IT companies cannot go all over the world to serve Chinese firms that have ventured overseas. Instead of such creative strategies, most Indian companies merely see China as a place for buying stuff and selling in India under their label.
Perhaps there is inadequate appreciation of the success stories that some Indian companies have scripted in China. NIIT, for instance, has been a great success, working in close co-operation with universities and colleges there to train students in IT. It works with local and multinational enterprises in China to provide solutions for sourcing, training and hiring of IT professionals. Infosys and TCS have leveraged their connections with international companies to find and expand business in China, a strategy that can work well for Indian firms in other sectors too. The Mahindra Group is exporting vehicles from its production base in China.
What is particularly heartening are the stories of small businesses that have made it big in China. Dasgupta peppers his book with many such case histories. For instance, he tells the story of Prem Ahuja, CEO of Qingyuan Decheng Chemical Technology Co Ltd, who has diversified into many businesses; of Ravi Shankar Bose and Ranjit Singh, who came to China as employees and then set up their own business; Suresh Sirigeri, who has a flourishing business in agrochemicals there; and many other such success stories.
There is also the other side of the story -- Chinese businesses seeking to set up shop in India. Chinese brands such as Haier, Xiaomi, Lenovo, Oppo are now household names in India. The Chinese view India as a market they must be in, because of its size and growth. That is why a host of Chinese companies in sectors ranging from renewable energy to pharmaceuticals to consumer durables as well as the automotive sector, have all made a beeline to India.
The trade war between the US and China has provided another impetus, with Chinese companies seeking new markets and India needs to capitalise on the opportunity. Here too Dasgupta has several anecdotes about Chinese seeking out opportunities in India. He tells the story of Li Jian, who speaks Hindi and has taken the Indian name of Amit. Li is the founder of business advisory firm Draphant---the name a combination of Dragon and Elephant---that hand hold Chinese firms wanting to invest in India. Dasgupta says China is laying the ground for a massive transfer of its industrial capacity around the globe and it is imperative that India bags a part of that. Collaboration with Chinese companies looking for opportunities in India could be a good strategy.
Of course, there are outstanding political issues between India and China, but we need to find a way around them. With China pouring in funds for infrastructure development in Pakistan, Nepal, Bangladesh and Sri Lanka, India may have no option but to have a more pragmatic and flexible attitude towards Chinese investment, especially Xi Jinping’s flagship Belt and Road programme. Indeed, Dasgupta writes about BJP leader Ram Madhav’s trip to China where he had sparked a lot of excitement by saying that South West China could use the Indian north-east as a hub to gain access to Chittagong port in Bangladesh. China, says Dasgupta, is very eager to get India on board the Belt and Road programme.
The book also looks at the policies adopted by the Chinese leadership that have led to such rapid development. He cautions, however, that India cannot blindly emulate those policies, not least because we do not have an all-powerful Communist Party that directs the economy. India must find its own way and ‘cross the river by feeling the stones’, as the Chinese saying goes.
And finally, there is a delightful chapter on ‘Deal making while navigating Chinese culture’, which gives practical tips on how to do business in China. This includes ‘Guangxi’ or personal connections, 'Zhingjian ren' or the intermediary and other aspects of business culture in China, including, on a lighter note, the importance of taking along a colleague who can do the mandatory drinking during dinner invitations.
Apart from its insights, this is a practical, hard-headed and engaging book by an old China hand, full of wise advice for Indian firms seeking know-how on doing business with the Middle Kingdom.
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