Getting China and India Right

Getting China and India Right

Anil K. Gupta and Haiyan Wang (pictured with WSJ's S. Mitra Kalita), are co-authors of Getting China and India Right.

NEW YORK, May 11, 2009 – As the vortex of power shifts east, China
and India are becoming increasingly critical for an overall corporate
strategy, according Anil K. Gupta and Haiyan Wang, co-authors of Getting China and India Right.

Speaking
at Asia Society headquarters, Dr. Gupta and Ms. Wang said of the twelve
largest economies, only China and India have exhibited some resilience
during the global recession. The discussion was moderated by S. Mitra Kalita, The Wall Street Journal's deputy economics bureau chief.

“Companies
that had already established a footprint in China and India before the
recession, are finding this economic crisis as an opportunity,” said
Dr. Gupta. He said smart corporations must recognize where the
countries are similar and where they differ, in order to carefully
devise growth strategies.

The authors spoke
about one formula, I=C-12, as a way to understand the two economies. It
indicates China is about 12 years ahead of India in economic reform,
something that should be factored in when comparing investment
prospects.

Ms. Wang said one of the challenges
of the two economies is their “vast markets with low per capita
income.” Experienced multi-nationals typically operate in rich-to-rich
markets or poor-to-poor markets but in China and India, the middle and
the bottom of the pyramid markets are vast. By 2025, this segment is
likely to be as large as the entire US consumer base.

“China
and India account for 40% of the world population and 10% of world’s
GDP, ” said Dr. Gupta. They offer the lowest cost structures for both
blue collar and while collar workers and are increasingly becoming hubs
for innovation. They are the largest producers of scientists and
engineers and most of the world’s technological patents. In the coming
years, they will likely represent a larger portion of the Fortune 500
list. With the rest of the world demonstrating greater interest, we
should expect to see more cross-investment between India and China.

Ms.
Wang said that the policies and stimulus packages set by the Chinese
government have been very effective at rescuing China’s economy from
the recession. Governments in both countries have taken an active and
crucial role in their current economic plan.

Dr.
Gupta believes that having sidelined political issues, the two
governments are increasingly engaging in a dialogue on economic issues
that will strengthen the two superpowers resolve in the future.

Reported by Yoshie Ito and Chandani Punia

Getting India and China Right by Anil Gupta and Haiyan Wang is available from the AsiaStore.

May 11, 2009
by Stephanie Valera