Potential for Sino-Indian Collaboration at the Microeconomic Level

Q (Question): What is the possibility of China and India emerging from the economic crisis?
A (Tarun): China and India are complementary economies. While there are many opportunities for partnerships at the macro level, I am particularly optimistic about the potential to collaborate at the micro level. I believe economic cooperation will supercede current border conflicts.

Q: What are potential areas for collaboration?
A: Biotech due to differences in genetic composition; Microfinance – India has a lot of experience; China is gradually open its doors to foreign participation in the sector

Q: How can Chinese companies have successful M&A transactions like the Tatas of India? Is this a good time for global M&A?
A: Chinese M&A has not been successful as seen from CNOOC’s failed attempt to acquire Unicol. This is not due to the English proficiency of Chinese managers but rather the understanding of Western culture as well as political opposition. I recommend Chinese companies to start by purchasing smaller businesses and practice what Zhou Xiaochuan suggests of being down-to-earth and pragmatic.

Q: How does the role of government differ in these two countries?
A: China too strong but world-class policy making; India too weak due to constant political turnover.

Q: How do Chinese and Indian entrepreneurship differ?
A: Indians are encouraged to experiment. I recommend youth of both countries to visit each other’s countries to better learn about each other.

Q: Why do China and India’s development models differ?
A: India is a far more diverse country than China. This diversity has eased the internationalization of India. Chinese society is comparatively more homogeneous, thus there are many opportunities for it to learn from my diverse societies.

Read the original Chinese version here

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