There’s hope for India, after all the Chinese are humans

Posted on September 20, 2011 by Vikas Pota

Having just returned from the World Economic Forum in China, I’m filled with optimism and hope for India’s prospects. Let me explain:

For quite some time, there’s a line that’s been pushed through the media of the Chinese being super-human, super efficient, and all such super things. My visit last year to China confirmed this, but on reflection I feel I was awe-struck just to be visiting China – its hard not to be considering all the hype you hear about the economic juggernaut that’s going to increasingly shape all our futures.

Having taken the opportunity to scratch beneath the surface this time, I found that in many respects the Chinese are no different to my Indian brothers and sisters, it’s just that the state does a good job in presenting a different picture – one of an organised system and collective entity – which is certainly not the case.

In fact, witnessing and experiencing such difference, almost makes me like China more, it makes the place more humane, and for this reason more attractive as a place to visit and perhaps even invest in.

In India, the one thing we all know is that the government is simply incapable of trying to shape the world’s perception of India – which is no fault of their own, but simply a characteristic of the society it has become. With such rapid proliferation and scrutiny by the media and civil society groups, the government is held accountable – and perhaps does a better job at it than the Opposition parties in India.

When we look at macro trends, the economic advantages India is going to derive over the next thirty or so years from its demographic profile are absolutely gigantic. As Professor Tarun Khanna of the Harvard Business School cited at the Summit – India will have a surplus of approx. 50 million skilled workers over the next few decades, whereas the rest of the world will have exactly the opposite.

Given this is the case, does it not stand that India has a fair chance of lapping China in this race to the top?

In China, they stand in straight lines…

Posted on September 17, 2010 by Vikas Pota

A TALE OF TWO HALVES

As written in an earlier post, I was nervous about my trip to China, which is continually portrayed as (almost) a foe to India, where my ancestors hail from.

Honestly, I really didn’t know what to expect and wanted to keep an open mind.

So, when I landed, I was pleasantly surprised. The airport wasn’t located next to a giant slum, which Mumbai’s airport is, the personnel shepherding us to our road transport were courteous and spoke excellent English, the roads weren’t full of potholes, I saw no livestock on the streets, all in all the experience was not dissimilar to most Western airports and countries.

Having settled into the conference I was attending, I realized that I could be almost anywhere in the world. Importantly, I was connected to the net via my Blackberry, had access to Facebook and Twitter – what were all these doomsayers complaining about?

Bolstered by Premier Wen’s opening speech at the Summit, I found an acceptance that China was as much a part of the world as the UK was. Contrary to public perception in our part of the world, he spoke about the challenges that China faces in an open and thoughtful manner and thus laying to rest the notion (at least in my mind) that the Chinese would never speak of their internal challenges openly as they’d be risking a loss of face. I also witnessed a major Chinese business leader – Kai-Fu Lee – trash its education system in public.

Clearly, I felt that people had been egging on this perception that China had a problem with freedom of speech. Or had they?

I was lucky that an old business acquaintance of mine had relocated to Beijing, where I met up with him. Prior to this, I was keen on doing some sightseeing so I got an English speaking guide to take me around the Forbidden Palace and Tiananmen Square, the latter which I was really keen on visiting due to the massacre that took place there. Gently, I probed about the incident, and she point blank refused to talk about it, she said, “we’re not meant to talk about that”.

Was this a one-off?

The reason why, despite my best effort, I saw no slum villages, or any signs of poverty my friend told me was that the Chinese authorities controlled migration. So, you couldn’t just choose to relocate to Beijing, whereas in India, cities like Delhi and Mumbai gain millions of new people looking for jobs on a yearly basis from all over India.

I came to realize that there seemed to be a fairly extensive use of social engineering – for example, the waitresses all looked stunningly pretty, the shopping area I was in only allowed people of a certain class & look into the precinct etc. Such examples, which I cast aside earlier in the visit, all came to the fore – were they simply trying too hard to project a view of China & Chinese culture to the world. If so, they’d do well to remember that given we’re brought up in mature democracies, I’d rather see the real China – warts and all, than their take of a western consumerist society.

On a lighter note, having had an enjoyable dinner, we walked to the taxi rank so I could make my way to the airport, when unexpectedly, it started raining. Nothing strange about that at all, after all Mother Nature does what she does best. Or does she?

Trying to make a point, my friend spun me a story about the Chinese authorities fired chemical rockets (also called cloud-seeding) in the sky to make it rain and snow at their will! They even control the weather! To support his point, he sent the following link as evidence: http://blogs.wsj.com/chinarealtime/2009/11/02/beijing-snow-man-made-in-china/)

Amused and amazed with the knowledge I had acquired, on my arrival at the airport, I tried articulating what I thought about China. I’d had an incredibly stimulating and thought provoking few days, but then I witnessed some form of staff team meeting taking place in a corner of the terminal, which for me summed up the enormous difficulty of arriving at a judgment about the world’s most populous country.

The striking feature of this meeting was not that it was taking place, but that the executives were stood in a formation of three even lines taking instruction from their boss. They listened attentively, acted in unison, and it seemed they had a collective sense of purpose and direction, where they understood that the sum of the parts exceeded the value of their individual contributions. This to me typifies the difference between China and the rest of the world.

Whilst, I’ve cherry picked some examples to make a point about the dominating part of her bureaucracy, I suppose whether you like China depends on how you view the role of the state. If you’re willing to cast aside her big brother tendencies, you could possibly have a great quality of life in China, like most Chinese people I saw in Beijing were enjoying.

World Economic Forum’s Annual Summit of the New Champions

Posted on September 17, 2010 by Vikas Pota

For someone who really finds it difficult to pay attention and actively listen to people, it may come as a surprise when I say that I really found the recently concluded World Economic Forum’s ‘Summer Davos’ meeting for Global Growth Companies in Tianjin, China to be thought provoking and stimulating.

Sessions ranged from the technical subjects such as the future of solar energy solutions, to the crystal ball gazing type that the WEF team facilitates extremely well.

For me, the Mentor Sessions with Chief Executives of Anglo American, Infosys, Metro Group, and Nestle were the highlights. The CEO’s provided their views on & experiences of various aspects of the journey that leaders from emerging companies will go through – just like they once did.

It goes without saying that the WEF brought together interesting people and communities to interact, debate and learn from each other, not just as speakers, but attendees. Given that they’ve been fine-tuning their proposition for so long, you can be assured of some high quality networking, which is exactly what I found.

All in all a great few days, well organized, and importantly – an enriching experience.

In conversation with Jim O' Neill – emerging markets guru at Goldman Sachs

Posted on June 18, 2009 by Vikas Pota

Attended a Q&A with Manchester United mad fan – Jim O’ Neill – author of the BRICs report and Chief Economist of the mighty Goldman Sachs, in which he spoke about the I in BRIC. I thought the following was interesting:

He referred to the current economic crisis we’re facing as the “crisis of the developed world”; and highlighted the fact that countries like India were experiencing growth of over 6% at a time in which ours is contracting. Jim referred to this as being “pretty remarkable” as it wasn’t too long ago that economists believed that India wasn’t capable of breaching the so called 3% Hindu rate of growth that she was known of hovering around for a very long time.

In marked contrast to China, India’s growth is a result of her personal consumption. People are still spending money and it’s domestic demand is what’s keeping it going. Interestingly, the current challenges that China is facing, Jim said, was going to be good for the world as it’ll force China to rebalance their dependence on exports.

Often criticised about the inclusion of Russia in his analysis, which shows that despite what’s happened in the last year, Russia has long outperformed Goldman’s first tranche of projections to 2050 – hence keeping those arguing for the removal of the R from his BRICs analysis at bay.

On India, the recently concluded general election was welcomed by the markets, with a surge in the Sensex of approx 20% on the day after the results were announced. Interestingly, Jim’s co-authored a paper titled ‘Ten Things for India to Achieve its 2050 Potential (http://www2.goldmansachs.com/ideas/brics/ten-things-doc.pdf) in which he highlights the need for improved governance as one of these factors.

He was asked as to what indicators would demonstrate that India was taking this seriously, which was a brilliant question that needs further consideration. In many senses the answer may be as straightforward as some of India’s biggest crooks – bureaucrats and politicians – having to face penalties for their behavioural failings. O’Neill said he would start thinking of this and perhaps write something on this matter. Please leave any comments on this post if you have any ideas.

Also asked of the real impact of being surrounded by some very populous countries, he reiterated that the potential for the entire sub-continent being lifted onto a different plane if cross-border trade could be encouraged, was noted and well received.

The briefing was taking place a day after the first BRICs summit, in which the Heads of Brazil, Russia, China, and India were meeting to discuss substantive matters such as the establishment of an alternative currency to the Dollar. In response to a question on the potential of this bloc, his analysis explained that Brazil and Russia were commodity rich, whereas India and China weren’t, which suggested that if they were to work together to realise synergies like this, then the grouping would have a dramatic effect on global economics.

In addition, he highlighted that any discussion on tackling climate change without these four economies would be futie. He joked that it was time that international institutions like the G7 & G8, the UN, IMF could do more than just “invite them for coffee on the sidelines”, which drew a few sniggers from the audience.

There’s not many people on this planet that could take the credit for coining the name of an international summit that brings together future superpowers together to discuss major issues that should concern all of us.

For this and more, Jim – we salute you.

Being such a smart guy, it beats me why you’d want to support Manchester United! Viva Barcelona 🙂

Foreign Direct Investment in India

Posted on August 22, 2008 by Vikas Pota

The Reserve Bank of India, this week, said that the total amount of FDI in India in the first quarter of this financial year exceeded the TOTAL received in 2005/06, which amounts to $10bn (£5.4bn).

Of the $10bn, a little bit more than $2.2bn was a result of the purchasing of shares by foreign companies in Indian businesses, which shouldn’t come as a surprise with the likes of Tesco and Vodafone showing an interest in India.

There’s an ongoing debate as to whether India can catch up with China, after all the latter nets upto $50bh on average every year. If India continues the explosive growth that these figures show, then there’s no reason why it shouldn’t match China. After all, India has over the past few years accrued the following sums:

2005/06 – $10bn

2006/07 – $22bn

2007/08 – $32bn

If the first quarter trend continues, then India is likely to meet, and possibly break, the RBI’s FDI target of $35bn for 2009.

Enterprise at Downing St

Posted on June 25, 2008 by Vikas Pota

It was an honour to be invited by the Prime Minister and Mrs Brown to a reception at Downing St for entrepreneurs a few days back.

The reception coincided with the launch of a new strategy for enterprise and a set of counterproposals by the Conservatives. From my experience of starting businesses in the UK and in India, I have to say that the UK is way ahead and easier to navigate for the budding entrepreneur. We’re always going to have issues, and we’re always going to feel that the Government isn’t doing as much as it can to reduce red tape. However, if one takes an objective look (at our bottom line), our businesses are growing.

In conversation with the PM, many of us expressed that we faced the real danger of talking ourselves into a recession. Despite the negative media that the economy is receiving, the overwhelming consensus was that our businesses were growing, orders and contracts were being sealed and in general terms, we were all confident of weathering any economic downturn that we may face.

However, what I found very interesting was that everyone I spoke with at the reception said that they already had some kind of relationship with a high growth economy like India or China. Whether it was the lady who specialises in glass architecture, or the guy from Wales who’s set up an incubator for hi-tech companies in Wales.

Looks like the Government’s fear that medium sized businesses weren’t aware of the opportunities of India and other high growth economies presented, is misplaced. Raising awareness is not the problem. What they do need to worry about are the next steps…

Companies like mine specialise in helping British companies crack India. www.saffronchase.com

Chinese & Crisis Management

Posted on May 26, 2008 by Vikas Pota

Over the past few weeks, I’ve been fascinated by the way different systems and cultures deal with disasters and crisis situations. Take the Chinese earthquake as an example. Their departure from their “normal” mode of behaviour i.e. closing down any access to politicians, access to western media, providing statistics on the death toll etc has to be welcomed.

I think Premier Wen Jiabao has shown that the Chinese, too, are normal human beings and not the robots who work 24/7 without any signs of emotion to provide us our DVD players and Gap jeans.

Everyone goes on and on about China, but, I for one, have simply not caught the bug to visit the country. I suppose my reasoning is that it simply doesn’t feel like a fun place to go to.

Sure, it may have history, sure indigenous culture is important to note, but the overarching rules that dictate daily life that are laid out by the Communist Party of China (as portrayed in our media) seem a little too strait-jacketed for me and for this reason any effort made by Premier Wen to bring in more openness in China has to be welcomed.

Perhaps the Burmese should take note?