India China Chronicle July-August 2018 by India China Chronicle

An India-China Economic and Cultural Council publication

July–August 2018 • ` 100

Mathematics of Manufacturing in India vis-à-vis China Zheng Bin

Vinod Sharma

Santosh Pai

Talmiz Ahmad

Feng Yanan

Divay Pranav

India needs greater efficiency, transparency in systems to attract higher investment

Why India needs to take a fresh look at China’s Belt and Road Initiative

Chinese competitiveness cuts India

Chinese investors worry about India’s Enemy Property Act

We lack the right skills to deal effectively with the Chinese

Chinese apps spicing up infotainment with regional condiment

www.icec-council.org

Need to promote greater understanding, trust in the India-China space

Vol 5, Issue 5, July-August 2018 EDITOR-IN-CHIEF Mohammed Saqib EXECUTIVE EDITOR Rajni Shaleen Chopra EDITORIAL BOARD Mani Shankar Aiyar PS Deodhar Prof Haixiao Song Dilip Cherian Shaodong Wang Amir Ullah Khan EDITORIAL TEAM Irfan Alam Audrey Tso Aishita Shukla Resham Bhambhani DESIGN Manoj Raikwar OWNED, PRINTED AND PUBLISHED BY Mohammed Saqib Registered with the Registrar of Newspapers of India under RNI No: DELENG/2011/43423 PUBLISHED FROM A-82, Zakir Bagh, New Delhi - 110025 ADDRESS FOR ALL CORRESPONDENCE India-China Chronicle B-59 (GF), South Extension - II, New Delhi - 110049 Telefax: 011-46550348 PRINTED AT Aleena Prints Mr. Naved Rasheed Block Z-II, 378, Shahadra, Delhi-110053 Mobile:+91-9582345886 E-mail : aleenaprints@gmail.com All Rights Reserved. Reproduction in whole or in part without written permission is prohibited.

All advertising enquiries, comments and feedback are welcome at info@icec-council.org The information contained in this magazine has been reviewed for accuracy and is deemed reliable but is not necessarily complete or guaranteed by the Editor. The views expressed in this digest are solely that of the writers and do not necessarily reflect the views of India China Economic and Cultural Council (ICEC).

his issue onwards, there is a shift in the content of the India-China Chronicle. All major publications in the India-China space, in hard copy or online, are focused largely on issues and tensions between the two nations in the areas of diplomacy, strategy, security, military and economy. All these are legitimate areas of study and analysis for any publication. But the issues of discussion and deliberation in the India-China space cannot be restricted to these alone. In addition to these issues, a major publication taking up matters of core concern for India and China must also consistently look at the challenges which bedevil investors, manufacturers, business leaders, traders, negotiators and others. The problems faced by the Chinese workforce, academicians, students, tourists and others need articulation. In addition to the scholarly pursuits, the Chronicle will take up matters relating to these drivers of the India-China economic, social and cultural linkages at ground zero. What are the learnings here that the investors and entrepreneurs can benefit from? What is the pool of experience that can be articulated, so that we collectively benefit from it? There are grey areas in the India China space, and also the positives, that we may not be aware of. What fears grip the Chinese investors and corporate figures in India? What are their anxieties and aspirations in the Indian business space? What is their understanding of our market dynamics? What reasons do they see for the comparatively low Chinese investment in India? How can these challenges be resolved? What are their happy experiences here? And similar questions for Indians who want to head to China for business, social or cultural reasons. These are issues that a magazine devoted to the India-China synergy and cooperation must answer. Increasingly, we will talk to the many individuals and groups in the India-China space to articulate all that they consider good, bad or ugly in the fields where our businesses and work areas intersect. Even after operating in this space for so many years, it comes as a surprise to us that Chinese investors worry about the Enemy Property Act in India! They feel that the Indian government may seize their assets under the garb of this Act! For problems to be addressed and resolved, it is first essential that the problems are articulated and expressed. This will happen only if individuals and groups engaged in the daily nitty-gritty of Chinese businesses in India are given a platform to talk about their misgivings and doubts. India and China suffer from a lack of mutual understanding and trust. Both countries know they stand to benefit from strong economic and business ties. Our interactions will be purposeful, and will offer substantial results if we know more about the other, and understand the cultural contexts which impact our interactions. These insights will come from greater recognition of our core concerns, and sharing them with the other. An honest expression of our anxieties and aspirations will enable the other to grasp and appreciate them more. India and China are ancient civilizations. We have been neighbours for centuries, and geographically, it is ensured that we will remain so. With increased political and economic engagement, it is essential to encourage greater understanding in both countries of each other’s culture. Decoding cultural norms of the countries with which we are engaged economically is increasingly becoming fundamental to healthy and meaningful business interactions. There is a definite need to promote people-to-people interaction in the India-China space.

Editor-in-Chief Mohammed Saqib

am surprised by the focus of the Chinese on a particular point in our communication. Their inability to understand Indian English. Zheng Bin, Chief Executive Officer of the Mumbai branch of Industrial and Commercial Bank of China (ICBC), is among the few Chinese in India who are fluent in English. I interacted with him on questions concerning the India-China economic space, and the reasons for low Chinese investment in India. After I was done with my queries, I asked him if there was anything else of significance which he might want to talk about. “Can you please write about an important aspect of communication between the Indian and Chinese?” he asked me. Zheng Bin said the Chinese find it very difficult to understand the English spoken by Indians. This was news for me. I had assumed that anywhere on the planet, the simplest English is spoken by the Indians. Turned out the way we speak English is nearly Greek for the Chinese! Perhaps it’s to do with the fact Hollywood movies are very popular among the Chinese, so Western accents are familiar territory for them. The way we Indians speak English, on the contrary, is challenging for them to understand. Later, I interviewed Feng Yanan for the current issue of the magazine. Feng Yanan was in India from February 2008 to July 2018. Yanan spoke English with much less certainty as compared to Zheng Bin. And he tended to speak slowly. Which was fine with me, because he spoke with a heavy accent. I found it difficult to grasp half of what he said, and had to ask him to repeat it. Turned out the equation was balanced on both sides. Feng Yanan wasn’t totally at ease with my Indian English either, and would listen intently as I spoke. I had faced the same problem in my communication with the Chinese counselors who work at the Embassy of China. Their accent was a problem unless they spoke slowly. I realized that the point that Zheng Bin made needed emphasis. The Chinese find it difficult to comprehend Indian English. Indians find the Chinese accent in English difficult to fathom. Zheng Bin told me that out of courtesy and respect, the Chinese will not stop you, or ask you to repeat what you have said. It was a cultural issue, he said. The Chinese find it rude to interrupt the other person and tell him that they could not figure out what had been communicated. They will keep nodding their head while the conversation is happening, and you may assume that the communication is clear on both sides. This may not be accurate. The Chinese may actually understand very little of the communication with an Indian, but will not convey it out of politeness. The gap in understanding, I am told, may be as high as 40 to 50 per cent. Accents cause a problem in the understanding of English worldwide. But the Chinese believe that the problem is at their end, that they cannot understand the communication. So they deal with it by following some key words in the communication that they can grasp. Professional and business talks and negotiations don’t work best if somebody is attempting to grasp the key words, and missing out on the large part of the conversation. When one knows the problem, it is wise to look for solutions. When communicating with the Chinese, the thumb rule must be – Speak slow. I realized I appreciated it when the Chinese spoke slowly to me. Then their language was easier to grasp. It will help if we do the same ourselves, while speaking to the Chinese. Second, it is important to understand that our actions are shaped by our cultural contexts. As business interactions between the Indians and the Chinese grow, it is important to drop prejudices, and enter our work zones without any baggage. Ignorance of cultural frames of references mean we may judge the Chinese, even as we deal with them professionally. Judging the other does not make for healthy, solid relationships. As these rules apply to us, so they apply to the Chinese too. Happy reading. Executive Editor Rajni Shaleen Chopra

CONTENTS COVER STORY

Complex market, stiff competition, heady mix of political issues

Rajni Shaleen Chopra

Mathematics of manufacturing in India vis-à-vis China Vinod Sharma

Why India needs to take a fresh look at China’s Belt and Road Initiative Talmiz Ahmad

India needs greater

16 efficiency, transparency in systems to attract higher investment

Chinese firms must adopt

40 practices essential for

success in Indian market Irfan Alam

I am an Indian but my

44 heart lives in China! Resham Bhambhani

Ought to know each other

46 better: India and China Jaspreet Kaur

Zheng Bin

We lack the right skills

20 to deal effectively with the Chinese Santosh Pai

Chinese investors worry

24 about India’s Enemy Property Act Feng Yanan

Chinese apps spicing up infotainment with regional condiment Divay Pranav

IIT Prof Unearths 700-Year-

50 Old Link That Will Blow Your Mind!

Lekshmi Priya S

‘Dying to Survive’: How a Leukemia

54 Patient & an Indian Cancer Drug Rocked China

Rinchen Norbu Wangchuk

56 Gupshup 60 Recent ICEC events

July-Aug 2018 ▪

MANUFACTURING INDIA VIS-À-VIS CHINA

Chinese Competitiveness cuts India In my opinion, the three major factors that have enabled the fierce cost competitiveness of China are:

Chinese competitiveness is led by its government/ policy makers. The Chinese government has taken ownership of ensuring that all factors of manufacturing – land, labour, capital – are available at the cheapest cost to its manufacturers. They have even invited global leaders to come and make in China while availing these low costs. The price that these MNCs have paid is that they have had to pass on their technology/IP to locals. The KRAs (key result areas) for the city bureaucrats (CEOs) of China is to establish a highly competitive sectoral economy, invite key players and finally collect adequate taxes from these thriving businesses. Consider how things are in India. The city authority (CEO) is obsessed with getting the best price for his land. The Electricity board chief wants to maximize

Vinod Sharma, a successful entrepreneur, has spent 20 passionate years in shaping Deki Electronics Limited into a world class ‘film capacitor’ manufacturer. The company has also diversified as a solution provider in the segments of electric vehicle charging equipment, surveillance & analytic solutions for the retail industry and as a supply chain partner to the mobile phone manufacturers.

▪ July-Aug 2018

revenue by subsidizing electric supply to villages and residences while charging highest tariffs to the industry. The banks are saddled with NPAs, priority sector lending, senior citizen interest burden etc. They are also trying to stay afloat by lending at high rates to industry. As a result, the Indian industry pays more than double for energy (average effective price per unit at the rate of Rs 10, versus China at the rate of Rs 4.) Our industry pays more for finance (interest rates average at the rate of 12 per cent versus China at the rate of 5 per cent). And we also pay higher for logistics (Rs 4 per kg in FCL from Shanghai to Mumbai port, but Rs 14 per kg from Mumbai port to Noida).

The Chinese competitiveness is established and maintained across the sector – from raw material to components and parts to final product assembly. China today has the most robust supply chains across the globe. Simple tax measures such as one VAT rate (at 17%), huge formal and informal non tariff measures to protect the local industry, and use of VAT refund to calibrate trade within stages of the supply chain – all have led to this enviable position. In India, we are still competing as companies – against a huge supply chain called China. In India, the Central and state governments say that it is not their duty to ensure competitiveness of sectors or industry segments – they would only like to ensure overall health of the economy.

Chinese competitiveness is based on an export intensive strategy. China is a much larger market than India. In spite of that, they have focused on exports for the past 20 years. They have built a world class infrastructure and unleashed a “lowest cost” strategy on the world market. For 20 years, they have relentlessly acquired market

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share at any cost – political, economic, environmental, human etc. Now that they are the factory of the world, they begin to talk WTO, climate change etc. On the contrary, we in India have never had a clear manufacturing strategy. Each one fends for himself, and changes the narrative as and when desired. The businessman is reluctant to invest because he has no assurance of a clear, sustainable policy on exports, imports or manufacturing. We cannot please all sections – labour, land owners, regulators, consumers, financial institutions, industry and government – all at once. The only alternative hence is to compromise. We can continue to do so and blame it on believing that “democracy has a cost”. But we will never be able to compete with China. China changed the rules of the game two decades ago. It’s time we take a call. 

July-Aug 2018 ▪

MANUFACTURING INDIA VIS-À-VIS CHINA

Mathematics of manufacturing in India vis-à-vis China

 Vinod Sharma

t is no secret that China has emerged as the factory of the world. A lot of us in the “China watching” world hope that rising wages, labour unrest or some other calamity will displace China from this winner’s position on the manufacturing competitiveness podium. When this happens, India’s manufacturing industry has good reasons to believe that they will be the logical contenders. How far behind are we on manufacturing competitiveness?

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Comparative ROI – Indian versus Chinese manufacturer of electronic component supplying to an Indian customer India

China

Sales

100

Logistics

Manpower (in site of lower wages in India)

Power

Finance

Marketing + All Other Exp

Profit

Investment

ROI %

17.5

Refund of VAT 17% on Value Addition (Rs)

8.5

Total ROI %

28.12

Let us examine the profitability of two companies – one Indian and the other Chinese, engaged in the manufacture of an electronic component. This component has a value addition of 50%, meaning that the raw material is only half the sales price. Why an electronic component? This is a zero import duty item (since April 2005, under ITA-1,WTO) – making it a global business, with no protection whatsoever. Both companies are aiming to sell the component to an Indian customer who is willing to pay Rs 100 per component, which is of course the price quoted by the Chinese supplier. The example assumes the same incidence of all costs on both the Chinese and Indian supplier (I know this is a far cry from the truth, but for the sake of simplification we’ll agree). This does not include three costs – energy, logistics and finance, since these are beyond the influence and control of the supplier. We may refer to them as comparative disadvantage for the Indian supplier.

Energy in this case costs the Indian manufacturer 5 per cent against a much lower charge of 2 per cent for the Chinese factory. Electricity for industrial use in India costs Rs 8 per unit vis-à-vis Rs 5 (0.45 yuan) in China. Most factories in India have to install a back up generating system – using at least two generators (in India it is never a good idea to depend on one). In the case of electronic component manufacturing, the machines are sensitive, and must have access to good quality power. Hence they need the assurance of a large stabilizer and a back up UPS system, which must be installed in an air conditioned hall in order to ensure that it functions well when you need it most. This utility bank must be run by an efficient team under a watchful supervisor. The effective per unit rate in India is hence Rs 12.50. The comparative pricing of 5 per cent in India vis-à-vis 2 per cent in China is logical.

Poor infrastructure means higher costs of inbound and outbound logistics. Wire, which is used by both component manufacturers as the lead wire for their components – is manufactured at a factory in Shaoxing, 300 kms away from Shanghai. The cost of putting this wire on a truck, on to a ship at Shanghai port, up till berthing at Mumbai port is Rs 4 per kg. The shipping time is 21 days

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Manufacturers in India are “hollowing out” – opting the route of trading rather than investing in manufacturing. In this case, the Indian manufacturer makes a 8 per cent net profit (which is optimistic), while the Chinese competition makes 14 per cent

(plus or minus one day). Once it berths in Mumbai, it can take up to seven days to be deberthed, inspected, cleared and transported by truck to Noida, New Delhi NCR. Now it costs Rs 14 per kg. This is just one example to arrive at a logistics cost of 2 per cent vis-a-vis 1 per cent in China.

Electronic component manufacturing is a capital intensive business – in fact almost any business that adds 50% value would normally be. The capital employed to turnover ratio is normally 1:1. For this example, we take it as 0.8. This means Rs 80 are employed to generate a sale of Rs 100. Interest costs to most SMEs in India are to the tune of 12-14% versus 5-6% in China. The figure stands at 3% in Taiwan and 1% in Japan, who are quite likely to be the financing source of such a factory in China. A five per cent finance cost for the Indian company versus a 2% for the Chinese is hence very plausible. This translates to a comparative disadvantage of 9 per cent. This is a set off by three per cent points in favour of cheaper labour wages in India. The much higher productivity in China is based on their worker hostels, 10-12 hour shifts at the rate of 1.5 times overtime wages, and a culture of efficiency. You will notice that the more value the Indian manufacturer chooses to add, the more will be the impact of these disabilities. No wonder then, that manufacturers in India are “hollowing out” – opting the route of trading rather than investing in manufacturing. In this case, the Indian manufacturer makes an eight per cent net profit (which is optimistic), while the Chinese competition makes 14 per cent. That is not all. The Chinese company enjoys a 17 per cent VAT refund on its exports – which brings in a further 8.5 per cent (50% of 17% VAT) to the bottom line – resulting in a Return on Investment (ROI) of 22.5%. Where will you invest? This 2.5 fold ROI is the gap in our competitiveness. Add to this the lack of an ecosystem, poor economies of scale, a lukewarm thrust on manufacturing and high transactional costs. 

July-Aug 2018 ▪

RE-LOOK BELT AND ROAD INITIATIVE

Why India Needs to Take a Fresh Look at China’s Belt and Road Initiative India just does not have the option of ignoring the BRI now

▪ July-Aug 2018

 Talmiz Ahmad

wo years ago, I had written a detailed comment on the “One Belt, One Road” proposal, projected by Chinese President Xi Jinping in 2013 as a series of logistical connectivity projects across the Eurasian landmass and the Indian Ocean. While India had even then expressed misgivings about certain aspects of the proposal, it has, over the past year, emerged as a fierce opponent. So much so that the Indian media has begun to view this opposition as part of the larger divide between India and China – on par with the border dispute, concerns relating to China’s increasing influence in South Asia and the burgeoning naval competition in the Indian Ocean. Even regarding India’s participation in the summit of the Shanghai Cooperation Organisation (SCO) in Qingdao, the headline story in the Indian media was that India had been the sole SCO member not to support the proposal in the joint statement. In fact, developments relating to the connectivity proposal since it was first proposed necessitate that India take a fresh look at it.

New developments The principal developments over the last five years are the following. One, the proposal has a new name: OBOR has officially become the “Belt and Road Initiative” (BRI). This is to correct the impression in some quarters that the proposal envisaged a single linear connection across Eurasia and the Indian Ocean. It has now been clarified that BRI will be “a network of regional cooperation and systematic projects of global significance” that will embrace 65 countries. Linked with this is the clarification that the proposal is not a vision, programme or strategy; it is an ‘initiative’, focusing on “shared growth through discussion and collaboration”.

Two, BRI is now “much more than just investment and infrastructure projects”: BRI is part of “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” and is included in the Communist Party of China’s constitution. Three, there is now greater clarity about the projects included in BRI. Apart from the Asia-Europe land and sea ‘silk’ routes, six economic corridors are envisaged: China-Mongolia-Russia; the ‘New Eurasian Land Bridge’, a 10,000 km rail link from China to Rotterdam; the China-Central Asia-West AsiaEconomic Corridor, replicating the ancient Silk Road; the China-Indo China Peninsula Economic Corridor; the China-Pakistan Economic Corridor, and the earlier Bangladesh-China-IndiaMyanmar Economic Corridor. Four, BRI now also includes digital connectivity, the “Digital Silk Road”. This envisages “innovation action plans for e-commerce, digital economy, smart cities and science and technology parks”. Finally, China has mounted a major effort to promote the initiative in the international community. Besides the “Silk Road Summit for International Cooperation” organised in China in May 2017, which was attended by over 60 countries (excluding India), China has reached out to the European Union, the ASEAN and SCO members and West Asian countries. In respect of the latter, it has entered into BRI-related construction agreements with six Arab countries, and has obtained affirmations of support for BRI from Saudi Arabia, Kuwait, the UAE and Oman.

BRI, a multi-national initiative Chinese sources have clarified that these “economic corridors” will not be straight-line linkages across Eurasia; instead, there will be numerous loops and branches so that no part of Asia or Europe will be excluded from the initiative. There is also no final blueprint encompassing all the projects: Christina Lin has pointed out that the BRI is “a very

broad, flexible and inclusive framework for cooperation” that is sufficiently “vague and fluid” for different projects to be included under the BRI umbrella. Though there been have questions raised in certain quarters about the technical and financial viability of some of the projects and even concerns that some of the poorer nations might find themselves in a debt trap, overall there is considerable international support for the BRI. Most national leaders and commentators welcome the proposed logistical connectivity projects and note that there is considerable flexibility both regarding the specific projects envisaged under BRI and the level of partnership that will be inevitable in the implementation of these projects. Chinese sources have agreed that all projects will have to be part of national development plans of different countries and will be the result of partners working together; BRI, they say, is not “a solo, but a symphony performed by all relevant countries”. While BRI is clearly a Chinese initiative and very important for the projection of China’s achievements as a modern state that is influential in world affairs, it is not an exclusively Chinese enterprise: over 900 different projects will come under the BRI umbrella, which will require the active mobilisation of technology, management and human resources on a global basis. Above all, the cost of the projects taken together is estimated at over $1 trillion. Even with the maximum deployment of Chinese financing, it is believed that China will provide about $300 billion by 2030, i.e., just a third of the required funding; the balance will have to come from other national, regional and international sources, such as the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and regional fora like the SCO, China-Arab States Cooperation Forum etc. All these institutions will insist on the application of their own norms

July-Aug 2018 ▪

RE-LOOK BELT AND ROAD INITIATIVE and rules to ensure transparency and viability. Thus, in their implementation, BRI projects will be multi-national, even global, in character.

The China-Pakistan Economic Corridor India has two sets of objections to BRI: one, objections to various aspects of the China-Pakistan Economic Corridor (CPEC), and, two, concerns resulting from the view that BRI is effectively the projection of China’s geopolitical interests, particularly in the Indian Ocean. The CPEC, finalised in April 2015 with 51 agreements, consists of a series of highway, railway and energy projects, emanating from the newly developed port of Gwadar on the Arabian Sea, all of which taken together will be valued at about $50 billion. These projects will generate about a million jobs in Pakistan

▪ July-Aug 2018

and, when completed, add nearly 2.5% to the country’s GDP. Gwadar will be developed as a deepwater port capable of handling 300400 million tonnes of cargo per year. A new 1,100-km motorway from Karachi to Lahore will be completed, while the Karakoram Highway from Rawalpindi to the Chinese border will be broadened and upgraded. Railway lines across the country will be thoroughly upgraded and expanded, with the road and railway network reaching Kashgar in Xinjiang. Oil and gas pipelines will be constructed, including a gas pipeline from Gwadar to Nawabshah, carrying gas from Iran. Most of the money will be spent on energy projects – about 10,400 MW of electricity will be generated between 2018 and 2020, besides renewable energy, coal and liquefied natural gas projects. An 800-km optic fibre link to boost telecommunications in

the Gilgit-Baltistan region is already under construction. These projects will promote national economic development through industrial parks and special economic zones. Chinese spokespersons have justified CPEC as an energy and transportation development initiative to lift the Pakistani people out of poverty and give them an open and better life. CPEC, they argue, serves the common interests of regional countries since it addresses “both the symptoms and root causes of terrorism and extremism”, which are in tune with India’s interests as well. However, India sees CPEC as a challenge to its sovereignty since, by upgrading the Karakoram highway in the Gilgit-Baltistan region, it affirms China’s support for Pakistan’s illegal occupation of this part of Jammu and Kashmir state that is claimed by India and is referred to as “Pakistan-occupied

Kashmir” (PoK) in all Indian official documentation. By not discussing CPEC with India and officially announcing the initiative as a “China-Pakistan” project, China is also seen as making no effort to accommodate India’s interests in this major enterprise. Again, India also views China’s presence at Gwadar at the mouth of the Gulf as indicative of its long-term presence in the Indian Ocean, that India sees as an encroachment on its strategic space. India’s concerns relating to CPEC appear to be misplaced. One, it is in India’s interest for China to invest in Pakistan and hopefully wean the country’s youth away from extremism. Again, while it would have been desirable for China to have consulted India regarding the CPEC activity in PoK, the fact remains that the final status of this disputed area will be ultimately decided between India and Pakistan when the moment is propitious; thus, improvement or expansion of existing logistical facilities in PoK does not in any way weaken India’s long-standing and legitimate claims. In any case, China in the interim seems willing to address India’s immediate sensitivities: in April 2017, Chinese diplomat Liu Jinsong, in his public remarks at the BRI conference in Mumbai, addressed the issue of projects in PoK by referring to China’s 1963 agreement with Pakistan, on the basis of which the Karakoram highway was constructed. Here, China had recognised PoK as disputed and had affirmed China’s willingness to “reopen negotiations” with the “sovereign authority” once the Kashmir dispute had been settled. Again, in remarks at a closed-door discussion at an Indian think-tank, the Chinese ambassador went further and said that to win India’s backing for BRI, China could even consider changing the name of the CPEC to one acceptable to India.

India’s Indian Ocean concerns Expanding Chinese naval presence in the Indian Ocean is of serious concern to India and merits detailed consideration. The Indian Ocean is important for the economic interests of all the countries that make up its littoral. India is at the centre of the ocean: it has a coastline of 7,500 km, 1,200 islands, 13 major ports and an exclusive economic zone of 2.4 million square miles; 90% of its exports are sea-borne, as are all its energy imports from the Gulf and Africa. About 10-15% of its population lives on its coastal regions and depends on fishing. Today, out of about $800 billion of India’s total annual foreign trade, 95% of trade by volume and 68% by value moves through the Indian Ocean. India’s sea dependence on oil imports is about 80%, along with 60% of its gas imports as LNG. Besides this,

900

placing India at the number six position globally in terms of fish-catching. India is also a major exporter of marine products, valued at about $2.5 billion annually. The country is a pioneer in deep-sea mining: in 1987, it received exclusive rights to explore four million square miles of two mining sites, and later in 2014 it obtained licenses to explore the Indian Ocean ridge, which is believed to be rich in cobalt, nickel and copper. China too has a deep interest in Indian Ocean security, since 90% of its foreign trade and 80% of its oil imports are sea-borne. It has a special interest in ensuring that the Straits of Hormuz and Malacca remain open to maritime movements, without threat from pirates or hostile action from regional or external powers. In recent years, India’s security concerns have increased exponentially due to what it sees as expanding Chinese presence in the Indian Ocean through economic engagements, construction of ports and pipelines, and the deployment of its navy, and views the BRI as an integral part of this enterprise. Chinese commentators have been at pains to assert that BRI is being promoted in the spirit of “peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit” and has a purely economic content. Chinese President Xi has asserted: “Instead of seeking any sphere of influence, we call on all parties to join the circle of friends for the Belt and Road Initiative.” The Chinese foreign minister, Wang Yi, has said that the BRI is “not a tool of geopolitics”. A commentator, Liu Zongyi, has asserted categorically that that the BRI “is a geo-economic cooperative design, and not a geo-political or geostrategic one”. Another commentator, Minghao Zhao, has written that China is seeking to move from “politics among nations” to “politics among networks” and is focusing on “connectivity” rather

over different projects will come under the BRI umbrella, which will require the active mobilisation of technology, management and human resources on a global basis

India is a major exporter of refined oil products, which account for 20% of its exports, primarily by sea. India is now also an important importer of coal, with imports accounting for 25% of its total consumption. India also depends on the ocean’s fish resources: its fishing and aquaculture industry employs 14 million people,

July-Aug 2018 ▪

RE-LOOK BELT AND ROAD INITIATIVE than “control”. Many Indian commentators are not convinced. Naval commentator Gopal Suri points out that Chinese investment in the development of new ports all along the Indian Ocean littoral, in Myanmar, Bangladesh, Sri Lanka, Pakistan and the East Africa coast, coupled with the establishment of its first naval base abroad at Djibouti, affirm the Chinese navy’s “clear strategic focus on establishment of a permanent presence in the Indian Ocean Region (IOR) in the not too distant future”. China clearly has legitimate interests in the Indian Ocean, whose security is as important for its well-being as it is for India. As China expands in naval power and political influence, it would be futile to imagine that it can be excluded from this space of such crucial significance. The challenge before India is to ensure that its own interests are safeguarded.

In recent years, India’s security concerns have increased exponentially due to what it sees as expanding Chinese presence in the Indian Ocean through economic engagements, construction of ports and pipelines, and the deployment of its navy. India views the BRI as an integral part of this enterprise

▪ July-Aug 2018

Here, it is noteworthy that India has responded effectively to China’s Indian Ocean forays. Modi announced in 2014 that maritime security would a priority concern for his government. This has given a great boost to the domestic ship-building industry which is presently building 40 naval vessels. India has also augmented its naval capabilities by acquiring the aircraft carrier, Vikramaditya, MiG29K aircraft, the Chakra nuclear-powered attack submarine, the indigenous construction of Kolkata class destroyers, Talwar and Shivalik class frigates, antisubmarine warfare ships, and Sumitra class offshore patrol boats, together with a wide variety of landing ships. India’s proactive approach has also included substantial prime ministerial engagements with the island nations of the Indian Ocean littoral. Thus, Gwadar is hardly the threat

it is perceived to be in sections of Indian opinion: India is well-placed at Chabahar, just 80 km away; it also has close ties with Oman and enjoys access to Omani ports on the Indian Ocean coast and to other important ports in the IOR. To face the Chinese challenge, India has also increased its cooperation with regional and extra-regional naval powers, since the forays of the Chinese navy into the Indian Ocean and the consolidation of China’s naval presence through a string of bases and facilities across the ocean are a matter of legitimate concern not just for India but for several countries in the Indian Ocean littoral. This has been achieved through deeper defence cooperation with the US and increased naval cooperation with Japan, Australia and Indonesia. These are loose arrangements and do not constitute “alliances”, but they can be quickly

China has a deep interest in Indian Ocean security, since 90% of its foreign trade and 80% of its oil imports are sea-borne. It has a special interest in ensuring that the Straits of Hormuz and Malacca remain open to maritime movements, without threat from pirates or hostile action from regional or external powers upgraded if the need arises. Thus, what was widely seen as China’s aggressive posturing has provided its own solution: India has obtained insurance for the defence of its interests through “external balancing”, i.e., described by commentator S. Kalyanaraman as “the forging of cooperation with one state to deter or defeat a threat posed by another”.

China’s response to India’s concerns Engagements among the principal Indian Ocean players indicate that a strategic balance has now been established in the region, with the US and its allies, India, Japan and Australia, able to set limits on China’s ambitions. Thus, while China has remained firm and unyielding with respect to its claims and interests in the West Pacific, clear reality checks in the Indian Ocean in terms of the opposition it faces have made it both conciliatory and cooperative in its overtures to the major regional countries, which it now seeks as partners in the pursuit of its ocean-wide land and sea projects that are part of BRI. India is the most important country among those wooed by China.

July-Aug 2018 ▪

RE-LOOK BELT AND ROAD INITIATIVE Chinese writings have frequently confirmed this. Tingyi Wang of Tshingua University, while noting that Chinese officials have highlighted “the special importance of India” in the initiative due to its location at the intersection of both the land and sea routes envisaged in BRI, has pointed out that India had “apprehensions”, particularly due to the CPEC. He denies that China has either the interest or the capability to contain India, and instead sees a relationship of both cooperation and competition between the two countries in the Gulf in the areas of energy security, economic ties and shaping the regional security framework, which would over time “unfold a wider geo-economic transformation in Asia and the IndoPacific region”. Sun Yang has written that, given the US-led alliance ranged against it in the Indo-Pacific environment, for China “cooperating with India appears to be the only way to change the situation and make a breakthrough”. He then makes two points to support his proposition: one, that India will not be able to prevent the Chinese presence in the Indian Ocean region, and, two, “India’s status and foreign policy strategy would never allow it to become a firm follower of the United States”. On similar lines, Ouyang Guoxing has argued that, considering India’s geo-strategic location and its political and military supremacy in the region, the Chinese navy “will not become a predominant threat to India in the next decades” and will remain focused on the Western Pacific rather than the Indian Ocean. He recognises the need for India and China to find ways to promote maritime security dialogue, commencing with non-sensitive areas and then moving towards military security cooperation gradually. Mao Jikang sees India as the “key factor [for] the implementation of OBOR [now BRI] initiative in South Asia”, and recommends that China do more to win Indian support for the initiative through addressing India’s concerns relating to

▪ July-Aug 2018

China’s hegemonic interests in the region by working more closely with India in executing joint projects and linking the BRI with India’s own IOR projects, and vigorously pursuing maritime security cooperation with India on the basis of the shared interest in the security of the international sea-lanes.

The way forward Given BRI’s scope, dimensions and the financial and other resources required to realise its various projects, it is not and cannot be an exclusive Chinese enterprise, even though China’s leaders may view the concept as reflecting their countries emergence on the world stage. BRI is truly global in character and needs the willing participation of several nations for it to take shape. Again, China is not the only nation seeking a new role in international affairs; several nations such as Japan, Korea, India, Iran, Saudi Arabia and Indonesia are also part of the Asian

resurgence. These changes in world order, while reflective of national economic achievement, also throw up fresh challenges as these nations compete to define their role and occupy their legitimate space in the new order. This scenario calls for mutual accommodation based on engagement, consultation, confidence-building and shaping of consensus, not confrontation and pursuit of hegemony. In the emerging world order, China and India, as major players sharing the broad strategic space in Eurasia and the Indian Ocean, are likely to have both competitive and convergent interests. It will be the principal challenge before the leaders and diplomats of the two countries to enhance cooperation and address areas of dispute. The discussion above has shown that on to the Indian Ocean, India has responded effectively to perceived encroachments from China and a strategic balance of power has been put

India’s presence awaited

in place. This, in my view, has opened opportunities for India to review certain of its positions which were adopted when misgivings and differences were at their height. BRI is one such matter that calls for a fresh look. The land and oceanic connectivity envisaged by BRI has the capacity to change global linkages in ways that are as dramatic as the age of exploration in the 15th and 16th centuries and the Industrial revolution in the 19th century. The Portuguese academic, minister and travel writer, Bruno Maçães, has noted in his new book, The Dawn of Eurasia, that once these projects have been completed, “we’ll no longer have Europe on one side and Asia on the other, but one single continent, increasingly inter-connected”. India was central to the transactions of the ancient silk and spice routes, and was the cherished destination of the earlier voyages of exploration and commerce. India just does not have the

option of ignoring the BRI now. Like all major initiatives, BRI has several shortcomings, but with consultations these can be effectively addressed. Given widespread international support, many BRI projects are already underway; some have even been completed. India will be a major beneficiary of these linkages, particularly when it melds its own proposals from Chabahar with the other Eurasian projects. Only through participation can India ensure that its interests are safeguarded: sulking on the sidelines is not an option in areas that are so crucial for India’s interests. India has secured its security interests in the Indian Ocean through some adroit moves at home and in the littoral, and with engagements with extra-regional powers; it must now serve its long-term economic and political interests by being actively involved in the ocean’s connectivity proposals and in addressing the region’s security issues, particularly in West Asia. India’s

membership of BRICS, the SCO and the Indian Ocean Rim Association and its robust engagements with Russia and China provide the opportunity for India to be a substantial player in defining and shaping the new world order. Where Sino-Indian ties are concerned, the remarks of the Chinese diplomat at the BRI conference in Mumbai last year are noteworthy: “The sky and the ocean of Asia are big enough for the dragon and the elephant to dance together, which will bring a true Asian Age.”  This article first appeared on The Wire

Talmiz Ahmad, a former diplomat, holds the Ram Sathe Chair for International Studies, Symbiosis International University, Pune, and is Consulting Editor, The Wire.

July-Aug 2018 ▪

CHALLENGES TO INVESTMENT REASONS

India needs greater efficiency, transparency in systems to attract higher investment Chinese find it difficult to understand Indian English. This has a significant impact on effective communication

▪ July-Aug 2018

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Most Indians will assume that the problem lies with the investing country. This is not the case. We feel that the problem is with the destination country – India. The Chinese investment happening in India will be much larger than what the official figures indicate. But we have not seen as much Chinese investment in India as could have been possible. One of the challenges we face are differences at the government level. India does not give China a level playing field vis-à-vis other countries. India has strong bilateral investment treaties and tax arrangements with other countries. The same has not been extended for China. A bilateral investment treaty facilitates investment. It provides for the right initiatives. India has robust tax treaties with Singapore, with Mauritius. The tax rates

offered to investments coming from these nations is low. Hence a lot of Chinese investment is happening through those channels, rather than directly from China. Another problem that we face in investment coming directly from China is that some of these investments need approval of the Indian government. But there is much bureaucracy involved, and the approval is slow. Industrial and Commercial Bank of China (ICBC) wanted to open a new branch in Delhi. But we have not got the approval for it even after three years. We had opened our Mumbai branch in 2011, and applied for permission to open a branch in Delhi in 2015. The matter was cleared by the RBI (Reserve Bank of India) in early 2017 – somewhere in January or February. Then the file went to the Ministry of Finance for final clearance. But the approval has not been received so far. Even after three years, ICBC is waiting for approval for a new branch. Such feedback would be very discouraging for Chinese investors to invest in India. Chinese clients

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India boasts of a democratic, stable government and is among the largest markets in the world. Then why is India not one of the top destinations for Chinese investment?

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The interview with Mr Zheng Bin was conducted by Rajni Shaleen Chopra, Executive Editor of the India-China Chronicle, on June 19, 2018. On July 9, The Indian Express carried a news report that the Ministry of Home Affairs (MHA) has voiced concerns that ICBC — the world’s largest bank by total assets — has employed more than the authorized number of Chinese nationals at its existing Mumbai branch. According to the news report, MHA had conveyed that only 3-4 Chinese nationals working with the ICBC are registered with the Foreigners Regional Registration Office (FRRO), Mumbai. MHA had observed that the other Chinese nationals working in the same bank would leave just before completion of six months of their continuous stay in India, to circumvent � �� the process of registration with the Indian authorities. Foreigners staying in India on visa durations of more than 180 days have to be registered with their respective FRRO. According to the IE report, MHA was concerned �� that the issue of more than 3-4 Chinese nationals working at the ICBC branch violated authorization by the RBI and the Centre, and these extra employees � �� in undesirable activities in India. �� could be involved � the news report published in The Indian Regarding �� Express, Mr� Zheng Bin said, “ICBC fully complies �� with extant rules and regulations of RBI and other � ten �� All �� authorities. �� Chinese nationals �� working with ICBC �� have duly registered �� at FRRO. The �� judgment of MHA �� seems to be based �� on dated rules and �� before facts 2016. We �� with are still in discussion �� parties �� relevant to resolve � �� the��misunderstandings and�� he miscommunications,” said. ��

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▪ 17 �� July-Aug 2018 ��

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CHALLENGES TO INVESTMENT REASONS want to be served by Chinese banks domestically, and also in countries where they do business. When Chinese companies want to make an investment, they come and ask us about the destination country. We share our experiences with them. About India, we don’t say ‘Don’t come’. We say come, invest in India. But you need to be very patient. Chinese investors look at India as one of the options for investment. Not the only option. They may decide to go to Malaysia, Indonesia, Vietnam, even some African countries. Those countries may not be as competitive in terms of market, an English-speaking population, workforce, geographical location or political stability. But Chinese companies can make their investments happen much faster in those countries. They can start manufacturing, start to generate cash flows very quickly. Chinese companies place a lot of importance on efficiency, which has been a problem so far in India. This has impacted the flow of Chinese investment to India.

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To attract higher investment from China, greater efficiency is a must for the Indian government systems. There must be transparency on how things are moving. It is good to make investors know how long the procedures will take. The Indian government must align the expectations of the Chinese investors with the reality 18

▪ July-Aug 2018

Chinese companies are investing in fintech, like PayTM, Flipkart. Those companies don’t require much clearance from the government for investment, and also for essentials like land, electricity and water. But importantly, these companies do not create many employment opportunities either, which is urgently and badly needed by the Indian government. Now the question boils down to this. When the Indian government seeks investment from a foreign country, what is the top priority? Is it high employment generation? Are they merely looking at capital inflow? Do they want capital and technology inflow? What does the Indian government want? The message to us is far from clear. If they want more employment, which means more investment into the manufacturing industry, they need to make their systems much more efficient. There are plenty of examples of Chinese companies trying to get clearance, and getting defeated by the wait. In one case, a Chinese company had to wait for 12 months to get a gas connection. The company was setting

up an automobile spare parts unit, and the gas connection was needed for manufacturing. We keep getting this kind of feedback. I have been in India for two years. Our bank came here with the ambition to facilitate more investment from China to India. We wanted to facilitate more balanced trade between the two companies. Our objective was to persuade our Chinese companies and clients back home that India will enjoy the same economic growth that we achieved in China in the last four decades. Our objective was to persuade Chinese companies that they can repeat their success stories in India. I still believe that it is possible. It will take a lot of time to achieve these goals. We are still optimistic about the future. But the confidence level gradually wanes. What are your suggestions for India to attract greater investment from China? Greater efficiency is a must. Also, there must be transparency on how things are moving. It is good to make investors know how long the procedures will take.

The Indian government must align the expectations of the Chinese investors with the reality. Business people make investment on the basis of what they experience, not what the media may write. Also, the Indian government must provide a level playground to Chinese companies. India’s tax treaty with China was not as favourable as its tax treaty with Singapore or Mauritius, and this impacted direct Chinese investment. Chinese companies found that it was more difficult for them to invest in India, or take the required licenses, as compared to the companies from Vietnam, Korea, Japan, Canada or other nations. When I interact with investors from those countries, I find a major difference. For a Chinese company, getting the approval or license for something may take three years. An investor from some other country may get the same approval in 12 months, or 18 months. ‘Understanding Indian English is a challenge’ Another major problem for the Chinese is that they find it difficult to understand Indian English. We are familiar with American English or British English. But we find it difficult to comprehend Indian English. During business negotiations with Indians, only 70 per cent to 80 per cent communication is correctly conveyed. Loss of 20 to 30 per cent communication in a business meeting is very high. Some Chinese professionals working in India tell me that they lose as much as 40 per cent of the communication, so they try to catch the key words and make sense of what is said. Indians are very confident of their English-speaking skill, and they tend to speak very fast. Many Chinese keep telling me that they are not able to follow it. When the Chinese come to India for business, they don’t know the country’s history or understand its culture. So there is already a disconnect of about 20 per cent. The disconnect implies a gap in understanding.

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Since the Chinese find it difficult to understand Indian English, that creates a further 30 per cent disconnect. When you add up, you find that only half of your message is correctly conveyed. Almost 50 per cent of the communication is lost or misunderstood. Chinese people seem to assume that their Indian associates will understand the language problem being faced by them. If an Indian is talking to a Chinese, the Chinese may keep nodding his head, pretending that he is able to totally understand what is being said. Such may not be the case. The Chinese may not be able to understand half the communication. But the Chinese people do not want to appear to be rude. They don’t want

“

The Chinese find it difficult to understand Indian English. Hence the Indians must speak slowly. The Chinese do not want to appear rude, so they don’t convey that they are unable to understand. The Indians must stop frequently and ask the Chinese, ‘Are you able to understand me?’ That will give space to the Chinese to state if he may have been unable to understand what was spoken to embarrass their Indian associates, colleagues or friends by interrupting repeatedly, or saying that they are not able to follow what is being said. I always recommend that the Indians must stop frequently and ask the Chinese, ‘Are you really following me?’ That will give the Chinese the space to state that he may have been unable to understand what was conveyed. I have found professional interpreters in China say that they find it most difficult to understand Indian English. Even when both sides are speaking in English, there is a definite language barrier. If there is better understanding of the language barrier, the communication will get easier, and will significantly help business discussions and negotiations. 

July-Aug 2018 ▪

INTERACTION WHAT WE LACK

We lack the right skills to deal effectively with the Chinese We need empathy to strike the right balance in our interactions with the Chinese Indians and Chinese lack comfort and trust in personal interactions. While Indians are comfortable dealing with Americans, Europeans, Australians, they are not able to get on equally well with the Chinese. Trust deficit, cultural disconnect, language disconnect – what is the issue here? Lack of trust often comes up in IndiaChina business discussions. The real issue here isn’t trust deficit. It is shortage of skills. It is simplistic to assume that language barrier alone restricts comfortable interactions between the Indians and the Chinese. Indians tend to feel that the Chinese culture is opaque. China is a high-context society. I have heard Indians say that while dealing with the Chinese, they feel that they have driven into a wall. This is a gap that can be bridged only if we get the right perspective into Chinese thinking and society. Where the Chinese are concerned, we are somewhat blinkered. Either dismissive or ignorant. Economic engagement with China has become highly significant for Indian businesses across diverse sectors, and also at the government level. So how do we achieve the objective of

▪ July-Aug 2018

“

China is a high-context society. I have heard Indians say that while dealing with the Chinese, they feel that they have driven into a wall. This is a gap that can be bridged only if we get the right perspective into Chinese thinking and society. Rich, meaningful business and professional relationships with the Chinese are possible only if we interact with them without judging them

having comfortable interactions with the Chinese without looking down at anyone, and without being intimidated? Our interactions with the Chinese do not need arrogance or sympathy. The approach that will strike the right balance in our interactions with them is empathy – the simple ability to understand and share the feelings of others. Rich, meaningful business and professional relationships with the Chinese are possible only if we interact with them without judging them. An Indian company in a robust partnership with a flourishing Chinese company stands to gain. It is imperative here that both sides must have the ability to sit and learn. Then the prospects are huge. Chinese businesses are growing the fastest globally. For any major Indian business group, a significant part of their competitive advantage lies in their ability to do meaningful activity with the Chinese. If the Indian company can get along with the Chinese and do something substantial, it translates into handsome profits. Some of the major sectors here are internet, electronics, power, engineering, procurement etc. If an Indian company can form a joint venture or a consortium with the Chinese, financing can be availed from Chinese banks at signifi-

Santosh Pai is a corporate lawyer and has been advising clients in the India-China corridor since 2010. His areas of interest include Chinese investments in India, India-China comparative law and policy, cross-cultural business negotiations and board governance.

cantly lower costs. There is a shortage of skills at every level in dealing with the Chinese. These can be classified into certain areas.

Negotiation skills The Chinese have mammoth organizations. The size of these organizations is a

function of Chinaâ&#x20AC;&#x2122;s history and evolution. Also, the Chinese have highly defined hierarchy systems, with total adherence to procedures. Lack of understanding of Chinese behavior may make the Indians suspicious. But if one studies the behavior at a deeper level, one can see the context. That makes

understanding the Chinese simpler. Then the inability to move forward with them does not become frustrating. Suppose an Indian company is dealing with a huge Chinese organization. The Indian will say â&#x20AC;&#x201C; I want to talk only to the decision maker in the Chinese company. I need quick decisions. I do not have the

July-Aug 2018 â&#x2013;Ş

INTERACTION WHAT WE LACK

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We need to train more and more Indian managers to work in Chinese business environment, and manage business across the India-China economic space. We need mid-level managers who have understanding of these contexts, and of Chinese sensibilities. If we are able to make the number of such Indian managers grow steadily, it will be a game-changer within the India-China economic space time to deal with anyone else. Now look at it from the Chinese perspective. It is unthinkable that the Chairman or CEO of the Chinese company will meet anyone without sufficient homework. There is a simple thumb-rule in China when it comes to the decision making process. Information moves up. Decisions move down. In China, during business negotiations one must attempt to engage at multiple levels in the hierarchy. This will allow one to influence internal decision making. Also, when you deal with the decisionmaker in the Chinese company, you must keep specific contexts in mind. Form is often as important as the substance.

Communication skills Our communication skills are reflected in the entire gamut of communication – verbal and non-verbal. It comprises

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our language, our demeanor, our bodylanguage and more. In a high-context society like China, everything matters. For example, if the sticking point in a particular deal is the valuation of an asset, the important thing is not just raising the issue. When you raise it, and how you raise it, is equally significant. Consider that the major part of your negotiation with a Chinese company is done, and you are now interacting with a top-level executive. If you bring up an awkward point in a formal setting, do not expect the senior Chinese executive to address the issue headon. An inappropriate mention will be considered highly displeasing, and the senior executive will just deflect it. Such awkward interventions may also jeopardize the deal. We need to train more and more Indian managers to work in the Chinese

business environment, and manage business across the India-China economic space. We need mid-level managers who have understanding of these contexts, and of Chinese sensibilities. If we are able to make the number of such Indian managers grow steadily, it will be a game-changer within the IndiaChina economic space. For other major economic partners of China such as US, study of Chinese business practices, culture, etc. is a vibrant area, greatly in demand. Managerial level studies in the US also have a huge China component. We are very late to this game. This gap is going to make a major difference to India. In 10-20 years, the size of the impact that China is going to have on India won’t be marginal. It will be highly significant. We have alarming gaps in our China learning, and we only have

ourselves to blame. China is studying India massively. In the last ten years, they have developed huge departments full of India experts. After the financial recession of 2009-10, maybe they thought that the economic dominance of the West is going to wane, and India is the future. Our lack of preparation to deal with China is reflecting very badly on us. We have a far larger English speaking population than China. We are more integrated internationally. We now need to build our China skills in our own interest.

Management skills There are about a hundred Indian companies operating in China. These are in the pharmaceutical sector, IT, manufacturing and other areas. The Chinese business and work environment is entirely different, and staff management is a key differentiating factor for these companies. Indian companies complain of entry barriers if they want to do business with China. The problem is that not just these individual companies, but even at the industry level we are unprepared. In proportion to the financial stakes involved, we haven’t learnt the skills to deal with the Chinese. Capacity building is the need of the hour. Look at our interaction with the Chinese in the economic space. The real bottleneck is lack of relevant skills. Communication skills, management skills, negotiation skills, language skills. Earlier, a vision for the future or understanding of new technology was the differentiator for top managers. Now, the individual with the maximum crosscultural ability emerges as the winner. Globally, all major economies have dealt with China and are involved with them in robust and wide-ranging economic engagement. If India has not been able to engage with the Chinese across diverse sectors as much as other nations, it is because we haven’t acquired the learning required to deal meaningfully and fruitfully with the Chinese. 

July-Aug 2018 ▪

CORPORATE CHINA ANXIETIES

Chinese investors worry about Indiaâ&#x20AC;&#x2122;s Enemy Property Act They fear their assets may be seized under this Act Executive Editor Rajni Shaleen Chopra spoke to Feng Yanan about the challenges regarding Chinese investments in India

he investment from China has not developed fast enough in India, as compared to the other countries. There is need to study which are the sectors in which Chinese companies have substantial involvement in India. Trade does not count as substantial investment. Trade just involves moving goods from here or there. In terms of major investment, Chinese companies are in India in the construction sector, automotive sector, mobile phones equipment sector, steel companies. The question is, why are more and more Chinese companies not investing in India?

Fear of Enemy Property Act A major factor is that Chinese investors worry that the Indian government can occupy our physical assets any time. I

Feng Yanan was Chief India Representative of Sinohydro Corperation Limited/ PowerChina International Group Limited from 2008-14 and 2016-18. He spent 10 years in India, from February 2008 to July 2018. He went to Beijing in July to take up a new role in his company. He is deeply interested in the study of Indian art and culture.

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have heard the large majority of Chinese investors in India worrying about this. I am not joking here. I am giving you the true picture. We know that for India, Pakistan is Enemy Number One. After Pakistan, it is China. Chinese companies are very afraid that the Indian government can apply the Enemy Property Act any time to them, and seize their assets in India. We know that this has not happened in the last 3040 years. We know that no property of any Chinese company has been seized. But the law is in place. And this law is applicable today also.1 I have spent more than ten years in India. I came here in February 2008. In the last four-five years, there has been an increase in Chinese investments in India. I get the same feedback from most Chinese firms who have invested here. They are afraid of this law. Till today, no one can clearly explain the jurisdiction of this law to us. Some lawyers tell us there is no issue. They say that there is no problem because of this law. But we don’t know for sure. We have not got this assurance from any person in a position of authority, who will tell us that this law won’t apply to Chinese investment in India. If you study the Foreign Direct Investment (FDI) in India, you will see good investments by Chinese companies from Singapore, from Hong Kong. The point is that Singapore and Hong Kong are very small. Mainland China is so big. In terms of proportion, investments should be highest from China. But Chinese companies worry that the Enemy Property Act won’t apply to investments that come via Hong Kong or Singapore. Hence, if they want to invest in India, they come via Hong Kong or Singapore. That makes the procedure of investment much more complex for them, as compared to investing directly. But Chinese companies feel that it is better to be safe first, than to be sorry

Maybe in the meetings that the Chinese hold with the various Indian government representatives, they don’t talk about their fears about the Enemy Property Act. But in their heart, they worry about it. Nobody can talk about it because it is a political issue. The Chinese investors frequently discuss this issue. They say we don’t know if the Indian lawyers are right or the Chinese investors are right. If I were an investor, I would definitely want to have total clarity on this

later. We feel that this law is like a sword hanging over our heads. Nobody knows when this sword will drop on us. When we speak to Indian lawyers about it, they say that this is not an issue. The Indian lawyers say that this law applies only to the assets which were owned by the Chinese, and left behind at the time of war. They say that according to this law, the successors of those who migrated to Pakistan and China during partition have no claim over the properties left behind in India. But we don’t know whether it applies to assets owned by Chinese companies today or not. So many Chinese investors in India worry about this issue. If the Indian government can authoritatively clear this issue for us, it will be highly helpful for investments. Maybe in the meetings that the Chinese hold with the various Indian government representatives, they don’t talk about it. But in their heart, they worry about it. Nobody can talk about it because it is a political issue. The Chinese investors frequently discuss this issue. They say we don’t know if the Indian lawyers are right or the Chinese investors are right. Personally, I don’t know who is correct. But if I were an investor, I would definitely want to have total clarity on this. This issue must be clear. I want you to write about this issue. Definitely. But please approach it softly, so that the antipathy between the two countries does not grow. Maybe the Indian government can say that investment that happened after a particular year will not be covered by this law. Then everybody will be relieved. But we cannot find any Indian authority addressing this problem. At the time of tension in Doklam, every Chinese company was fearful of India’s actions against them and their assets. The Chinese investors know that the Indian government has not seized any

After the India-Pakistan War of 1965, the Indian government had enacted the Enemy Property Act in 1968. According to the Act, “Enemy property” refers to any property belonging to, held or managed on behalf of an enemy, an enemy subject or an enemy firm.

July-Aug 2018 ▪

CORPORATE CHINA ANXIETIES property of Chinese investors. It has not happened till now. But nobody knows about the future. We hope the two countries always have good relations. But we cannot undertake the risk of the Chinese assets being seized anytime in the future.

Lack of clarity on limitation of movement Another major problem for Chinese investors is limitation of movement. The Chinese cannot go everywhere in India. We have no problem with this regulation. It is the discretion of the Indian government to decide our movement as per their wisdom. But in this area also, clarity is lacking. When we take up a project in a border state like Rajasthan, we do not know how many laws are sleeping there, which will wake up one day and confront us that we cannot be present there physically. Even the local Indian lawyers, the local law-makers or bureaucrats are not able to resolve our fears regarding this matter. Indian law is too complicated and complex. At the Mumbai Sea Link, one Chinese company bid for an ongoing project. At an advanced stage, it was disqualified for technical reasons by the Indian government. In black and white, they may not say that the disqualification was due to security reasons. But we know that this is the real reason. This is not a rare instance. It often happens. Many Chinese companies meet this roadblock. This leads to accumulation of negative experiences. It creates negative sentiment when Chinese companies propose investment in India. Everybody says welcome. We welcome your investment. But at the advanced stage, Chinese companies hit a wall. In India, there is no document which clarifies that investment in which area can meet this roadblock.

Confusion regarding limitation line at Rajasthan project In Rajasthan, our company was undertaking the complete construction of a power plant for an Indian company. The project was in Bikaner, in the region where you have the temple with mice.2 The state government was highly welcoming. The local government of the district was also very happy. The project was highly beneficial for the local economy. It would have secured the votes

Karni Mata Temple is a Hindu temple at Deshnoke, about 30 kilometers from Bikaner, in Rajasthan, India. It is also known as the Temple of Rats. The temple is famous for the approximately 25,000 black rats that live, and are revered, in the temple.

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Many Chinese companies face this confusion regarding the limitation line, about where the Chinese can go, and where they cannot go. Even the local Indian lawyers, the local lawmakers or bureaucrats are not able to resolve our fears regarding this matter. Indian law is too complicated and complex. This leads to accumulation of negative experiences. It creates negative sentiment when Chinese companies propose investment in India in the area for the ruling party. But we were told that local political rivalry stalled the project. The local rivals did not want the people in power to gain more popularity. The raised the issue that check the limitation line for the Chinese. They said that if the Chinese had overstepped the limitation line, they could not be present physically in the area. Even the local government did not know clearly. They were wondering if the limitation line is in this village, or that village. After they checked, they found that the project was only a few kilometers beyond the limitation line. But we were caught in the political rivalry, and orders were issued from Delhi to remove the Chinese

professionals from the project. Somebody should have known about the limitation line in the area beforehand, and warned the investor. Even the state government or the local government did not know at the time the project started, and also when it was underway. We had completed half the construction. By the order of the Government of India, all the Chinese professionals who were working at the site were taken away from there. We finally had to complete the project by instructing local engineers through remote interaction. We communicated every instruction to them on phone. Even then, we completed the project faster than a project which was being

July-Aug 2018 â&#x2013;Ş

CORPORATE CHINA ANXIETIES constructed nearby by an Indian company. Imagine if we were able to complete the project directly. We would have finished it so fast, and it would have benefitted the local economy even more. If this plant had been set up by a Chinese investor, he may have given up the project. But the investor was Indian, so he finished the project. The real issue here is lack of clarity. Lack of clarity regarding Enemy Property Act, and lack of clarity regarding the limitation line. Regarding the Enemy Property Act, we are not clear. Regarding the limitation on areas where we can invest or where we can even be present, we are not clear. We are not Indiaâ&#x20AC;&#x2122;s enemy. But we are limited by the enemy issue. These two issues make a major difference to investment and business from China. It is okay if India has security reasons. But you must give investors a clear idea. If you are not clear, how can the investment company take a final decision?

Challenges in India make Chinese investors look elsewhere In light of these challenges, the Chinese investors compare India and other countries as investment destinations. In many cases, they may choose the other country. The Indian government can say that many Chinese companies have heavy investments in India. What is the problem? The point is that China is a large country, and a flourishing economy. Some Chinese companies have investment here. But they can invest so much more. They have one factory in India. But they have the potential to set up ten factories in India. They worry about the factors that I have discussed with you. Other countries don't have these issues. India poses some other challenges like the tax system. It is very complex. The land issue is very complex. To buy land here is very difficult. But with local assistance, Chinese companies can resolve these issues.

â&#x2013;Ş July-Aug 2018

Issues like clarity on Enemy Property Act and limitation line cannot be resolved so easily. If those issues are resolved, it will be a major change. It will create a positive opinion among the Chinese.

If India resolves issues, it will be win-win for both nations India is a great destination for investment. It is the second largest market after China. Plus, India has just started to develop. There is great potential here for investment. I will say that the Chinese

India is a great destination for investment. It is the second largest market after China. Plus, India has just started to develop. There is great potential here for investment. I will say that the Chinese must come to India. They should invest here. It will help if India quickly resolves the major issues that we face here PHOTO: POWERCHINA

must come to India. They should invest here. It will help if India quickly resolves the major issues that we face here. Whatever the problems, they are challenges not only for the investors. It is a major challenge for India also. The Indian government needs this investment for more employment generation. The Indian government needs Chinese investment to create a stronger economy. If these problems are solved, it will resolve major trust issues, and be the real win-win situation for India and China. The dialogue and the decisions in black-and-white at high diplomatic levels

help. But real action is needed to address these challenges, so that business and investment happens at ground level. Out of the ten years that I have been in India, I have received feedback on these challenges over the last five years. And maximum over the last three years. Before that, Chinese investment in India was not high. At that time, the bulk of business was restricted to trading. But as major investment happened, we faced these new challenges. Five years ago, nobody knew about these issues. They came to the fore only after investments started happening.

The Chinese investors tell me they had thought that their major problem would be visa issues. Tax issues. But all those are general issues. They have solutions. The Chinese know how to solve them. But when the Chinese investors met these new problems, they didn't know what to do about them. They didn’t know how to solve them. There was no clear communication. The Indian government is not aware of our real worries. They only think, ‘Why is Chinese investment not coming to India’. They don't know what we really worry about. 

July-Aug 2018 ▪

CHINESE FIRMS CHALLENGES

â&#x2013;ª July-Aug 2018

CHALLENGES FACING CHINESE FIRMS IN INDIA

Complex market, stiff competition, heady mix of political issues  Rajni Shaleen Chopra

ince the Wuhan Summit in April this year, IndiaChina ties have been on a rather rosy wicket. There has been marked enthusiasm in the air. Chinese companies are looking at greater expansion and diversification in India. The corporate sector is bolstered with financial, technical and knowledge strengthening by Chinese firms. The comfort space expanded so much that on June 18, the Embassy of China in India organized a conference titled ‘Beyond Wuhan — How far and fast can China-India relations go’. Speaking at the conference, Chinese Ambassador to India Luo Zhaohui endorsed the idea of trilateral cooperation between India, China and Pakistan. He suggested that this

could be done under the aegis of the Shanghai Cooperation Organisation (SCO). The move, he said, could “in the future” help resolve bilateral issues between New Delhi and Islamabad and help maintain peace. Ministry of External Affairs called the suggestion the Chinese Ambassador’s personal view. There was enough bonhomie going around, though. Some unease was felt in India and China’s kosher business space following a news-report. On July 9, The Indian Express carried the following news on Page 1: ‘Home Ministry flags Chinese bank eyeing second branch in India’. The contents of the news report led to concern in the comfort zone of India and China’s bilateral economic ties. The Indian Express report said the Ministry of Home Affairs had flagged that Industrial and Commercial Bank of China (ICBC) — the world’s largest

July-Aug 2018 ▪

CHINESE FIRMS CHALLENGES

The significant barriers for foreign companies doing business in India are complex bureaucratic procedures, huge business startup costs and India’s great internal diversity. “Not only do customs, culture and stages of economic development differ starkly between Indian states, but so do the bureaucracy, tax and tariff regimes,” an economic analyst recently noted bank by total assets — had employed more than the authorized number of Chinese nationals at its existing Mumbai branch. According to the Express report, the MHA had conveyed that only 3-4 Chinese nationals working with the ICBC were registered with the Foreigners Regional Registration Office (FRRO), Mumbai. The other Chinese nationals working in the same bank would leave just before completion of six months of their continuous stay in India, to circumvent the process of registration with the Indian authorities, the report said. The Express report spoke of MHA’s concerns that these extra employees of Industrial and Commercial Bank of China could be involved in undesirable activities in India. The day this news report on ICBC appeared, I had a conversation about it with Zheng Bin, Chief Executive Officer (CEO) of ICBC Mumbai branch.

▪ July-Aug 2018

Some Chinese firms in India resort to low business practices, commit illegalities: Santosh Pai

hinese investments in India started gaining momentum 2010 onwards. They started from a small base and have seen rapid growth since 2014 when Modi’s government came into power, and launched the “Make in India” campaign. In 201516, India’s GDP growth rate also overtook that of China’s, so this gave it a further boost. Activities of Chinese companies in India are quite different from those in other countries where they seek resources (Africa), acquire technology or purchase real estate assets (Europe or US) or enter

smaller markets (South East Asia). Due to this, Chinese companies have been subjected to a sharp learning curve in India. The legal and regulatory system in India is both complex and vastly different from that in China. Only 10-20% of the Chinese companies have the capacity to fully understand and appreciate the complexities of the Indian legal system. Even among such companies, very few are capable of using the legal system to their advantage. Rest of the Chinese companies either make an attempt to merely comply with the black-letter law or are content to commit illegalities, safe

Our View

he report of the Ministry of Home Affairs regarding ICBC Bank, as published in The Indian Express, has brought into sharp focus the need for Chinese firms to do right, and be seen to be doing right. Trust remains a major factor in India-China relations. Either side cannot afford to jeopardize this tenuous bond with irresponsible behavior of any kind. The government must encourage the opening of institutes which will equip Indian youth to overcome linguistic and cultural barriers with China. Business is growing in the India-China space, and there is a major need for a talent pool of professionals with knowledge of both countries. All foreign investors in India have faced challenges regarding our

in the knowledge that India’s lax enforcement will allow them to escape. Instead of benchmarking themselves against other foreign investors from US, UK or Japan, Chinese companies often mirror business practices of the lowest standard of Indian companies. Now that the initial push of the ‘Make in India’ campaign has fizzled out and the Indian government has witnessed dramatic pull-outs of highly publicized forays of Chinese investors such as Wanda, the time has come when enforcement measures against illegalities being committed by Chinese companies will be stepped up. This will be a healthy trend, as it will weed out undesirable Chinese companies, and allow sophisticated Chinese companies to mature in the Indian market.

He said the IE report was not correct, and that the bank had RBI inspections every year. He felt that there had been some “misunderstandings and miscommunication”, and the bank would try to resolve them. The article in The Indian Express was read with interest among all those in the India-China space. Santosh Pai, a corporate lawyer who has been a major figure in the India-China business negotiations and transactions since 2010, tagged the IE report and tweeted: Honeymoon over, it is now time to crack down on blatant illegalities of #chinese companies in India and improve the #ecosystem Invest India Make In India. I was intrigued by Pai’s tweet and wrote to him, asking him to explain the reference in some detail. His response has been taken in the box alongside. The bad fish apart, bona fide Chinese companies in India are facing some

complex bureaucratic procedures, huge business startup costs and diversities in tax and tariff regimes at state level. In order to invite greater foreign investment and increase employment, it is essential for the government to pay close attention to ‘ease of doing business’. Lax bureaucracy and complex tax structures cannot be allowed to sabotage the building of India’s future. All blame cannot be laid at the door of the government. It is the people who make the government and the economy. Increasingly, we the people of India have to make the effort to make our systems smarter, transparent and efficient. The nation that we build today is the nation that our children will inherit.

India is expected to overtake the United Kingdom in terms of GDP by 2020, making it the world’s fifth-largest economy behind the US, China, Japan and Germany. For Chinese companies seeking a foothold in this rapidly growing market, the signs are upbeat

July-Aug 2018 ▪

CHINESE FIRMS CHALLENGES

While the business of Chinese companies in India is expanding, their talent pool of people with knowledge of both countries is highly limited. From chefs to CEOs, there is a growing demand for savvy young Chinese who can help to overcome linguistic and cultural barriers in India: South China Morning Post

real challenges. In August last year, Founding Fuel, an Indian hub offering ideas, insights, practices and wisdom for entrepreneurs, carried a news-analysis on its website. The analysis had been done in collaboration with CKGSB Knowledge, the online publication of the Cheung Kong Graduate School of Business, China. In the analysis, author Jens Kastner wrote that India is expected to overtake the United Kingdom in terms of GDP by 2020, making it the world’s fifth-largest economy behind the US, China, Japan and Germany. For Chinese companies seeking a foothold in this rapidly growing market, the signs are upbeat. While the reforms initiated by the Modi government had made significant changes, entering India and doing business here remain notoriously difficult. Among the significant barriers here, Kastner counted complex bureaucratic procedures,

▪ July-Aug 2018

huge business startup costs and India’s great internal diversity. “Not only do customs, culture and stages of economic development differ starkly between Indian states, but so do the bureaucracy, tax and tariff regimes. This means brickand-mortar business presences are often necessary throughout the country,” the news analysis concluded. There is another major challenge for the Chinese firms entering the Indian market. In August last year, South China Morning Post (SCMP) wrote that the biggest worry for Chinese firms in India isn’t the border dispute. It is the chronic shortage of finding qualified staff in India. SCMP observed that while the business of Chinese companies in India is expanding, their talent pool of people with knowledge of both countries is highly limited. From chefs to CEOs, there is a growing demand for savvy young Chinese

who can help to overcome linguistic and cultural barriers in India. As a result of these challenges, Chinese companies hoping to capitalize on the Indian boom and expecting an easy conquest here are in for a shock. The projection by the Founding Fuel report last year remains relevant this year too. For the Chinese firms entering India, a complex market, stiff competition and a heady mix of political issues means that success will not come easy their way. 

Rajni Shaleen Chopra, formerly with The Indian Express, is Executive Editor of the India China Chronicle. She organizes programs for youth engagement in Kashmir. She is also the Consulting Editor for Wajd, a Sufi magazine.

CHINESE APPS INDIA FOCUS

Chinese apps spicing up infotainment with regional condiment Chinese companies are banking on growth in regional content to tap new content consumers in Tier II and Tier III cities in India, rather than focusing on the English-speaking populace in the Indian metros  Divay Pranav

ewsDog is a Chinese news aggregator that employs about 50 people at its two offices in Pune and Gurugram. With over 50 million users, NewsDog is the top-rated news app in India as per Google Playstore. The stellar performance of the app can be attributed to its focus on offering content in 9 regional languages — Hindi, Bengali, Gujarati, Marathi, Kannada, Punjabi, Tamil, Telugu, Malayalam. It provides content in English too. The app is much more than just an aggregator. Its users often join the app for local news but stick to

▪ July-Aug 2018

it because of the entertainment value and regional content. This is a strategy adopted right out of Toutiao’s China playbook. Chinese companies are increasingly recognizing regional content-based entertainment and infotainment as a major market – and for good reason. As per a report by Times Internet For Marketers, regional languages surpassed English with a 66% share in overall content consumption. Across all such regional languages, while news is the biggest source of consumption (67%), sports (17%) and entertainment (16%) also make for significant user bases. Most of these users are in the 25-34 age group. Chinese entertainment apps are increasingly looking at India as a huge

market. Why so? South China Morning Post offered the explanation in an article titled ‘China’s booming live streaming industry may have reached its peak’, carried in December 2017. The article noted: “The party could soon be over for China’s booming live streaming industry, which saw revenue triple last year, as the tens of millions of yuan a year paid out to top presenters becomes unsustainable amid a decline in online viewer numbers.” As China’s domestic content markets begin to saturate, Chinese livestreaming companies are increasingly looking offshore. India comes as a natural fit. It is the only market that can match the scale and growth potential of China.

As China’s domestic content markets begin to saturate, Chinese livestreaming companies are increasingly looking offshore. India comes as a natural fit. It is the only market that can match the scale and growth potential of China. Additionally, many of the new entrants from China are looking at Tier II and Tier III cities — where there are little alternatives and high rates of growth Additionally, many of the new entrants from China are looking at Tier II and Tier III cities — where there are little alternatives and high rates of growth. However, a copy-paste of the same model in India as that in China would be a bad bet. This article looks at the trends in the booming regional content generation and live streaming industry in India, and what Chinese companies must be aware of as they look to enter the industry.

Popular Chinese apps focussing on regional content in India Name

Entry Present in User Base India in India

NewsDog 2016

50 million aggregate users

Live.Me

2017

60 million aggregate users

Musical.ly 2017

15 million aggregate users

Uplive

20,000 daily users

2018

Source: Press search

Shifting market dynamics and positive policy outlook By making subscribers both consumers as well as the producers, the livestreaming and regional content generation industry democratizes entertainment. This is key characteristic that has so far been missing in the present model of Indian media and entertainment industry. India is witnessing a booming young population, a rising digital footprint and an amplified share of population that gets its first access to the Internet on the smartphone. Hence, the shift in content consumption habits is natural. India’s large media houses have begun focusing their efforts in regional markets. But they are not always as well equipped as technology companies to use advanced technologies such as machine learning to curate content for individuals, and cater to a non-localized production model. As the market booms and new kinds of players emerge (read technology firms and apps), the industry has also come under the attention of the policy makers. The situation on this front so far is encouraging. The Telecom Regulatory Authority of India’s (TRAI) issuing of the notice on ‘Prohibition of Discriminatory Tariffs for Data Services Regulations’ in 2016 set the ball rolling for freedom of online content generation in the country. By championing

July-Aug 2018 ▪

CHINESE APPS INDIA FOCUS

TRAI is soon expected to release a consultation paper for over-the-top platforms. Chinese live streaming industry players are mostly absent from these consultations. For an industry that is still in infancy in India, it is important that Chinese firms do not overlook and skip participating in the evolving policy consultations in India

the cause of content generators instead of data providers, it set the base for easy generation of content from the ground up. TRAI saw this as a better bet rather than the classical top down broadcasting structure of the erstwhile media and entertainment industry. TRAI is also in talks with Cellular Operators Association of India (COAI) to look at the possibility of a 5G rollout in 2019. Access of 5G and better internet speeds will be a big boon to the regional entertainment industry.

â&#x2013;Ş July-Aug 2018

What should Chinese companies be aware of? TRAI is soon expected to release a consultation paper for over-the-top platforms. Chinese live streaming industry players (the ones with most experience in this sector) are mostly absent from these consultations. For an industry that is still in infancy in India, it is important that Chinese firms do not overlook and skip participating in the evolving policy consultations in India. An easy access to a large

subscriber base seems overwhelming. It excites companies looking to raise new rounds of funding by projecting the increase in user base. This needs a carefully crafted internationalization strategy. Another key factor in this evolving industry is that Chinese firms in the regional content industry are looking for just content generators in India. Their technology teams remain in China, far from the actual market. The understanding here is that the local content needs to be curated by locals. The same argument can also be applied to technology, as local tastes and app designs can be best understood by local technicians. Indian apps differ vastly in design, user experience and overall production features as compared to Chinese apps. Many IT companies entered India in the late 90s to outsource non-strategic activity to support offices. Later, they realized that skilled yet cheap engineers in India not only help save development cost, but also bring product improvisation for international markets. If western companies can take benefits of the local Indian talent, why are Chinese firms so hesitant to do so?

Innovative Chinese Business Model Market trends in India often lag behind those in China. This gives Chinese firms an advantage in predicting market reactions and latent demands. Chinese entertainment apps had the advantage of predicting trends for first-time Internet users. In the coming years, Indian consumers are likely to witness momentous evolutions in the content industry. ď ą Divay Pranav works at Investment Promotion and Facilitation vertical at Invest India, Government of Indiaâ&#x20AC;&#x2122;s investment promotion agency. He is responsible for hand-holding Chinese firms through their market entry process in India across the entire process chain spanned across the pre-investment phase, execution and after-care phases.

DATANG ENVIRONMENTAL INDUSTRY GROUP “Time for India to move towards “zero-defect and zero-effect” “Zero defect in production with Zero effect on the environment” “We serve in protecting the environment for future generation Join hands with us for better living world”

Only by observing the laws of nature can mankind avoid costly blunders in its exploitation. Any harm we inflict on nature will eventually return to haunt us. This is a reality we have to face.

“We, the present generation, have the responsibilities to act as a trustee of the rich natural wealth for the future generations. The issue is not merely about climate change it is about climate justice.”

President of China Mr. Xi Jinping

Prime Minister of India Sh. Narandra Modi

China Datang Corporation (CDT) is an extra-large scaled power generation enterprise group and is a solely state-owned corporation directly managed by the CPC Central Committee with the registered capital of USD 2.9 billion. By the end of 2014, CDT’s assets both in operation and construction are distributed in 31 provinces, municipalities and autonomous regions national wide with the total installed capacity of 140 GW, surpassing the threshold of 100,000MW to become an extra-large scaled power generation enterprise in the world. In 2015, CDT is listed as No.392 in Fortune Top 500 companies. Datang Environmental Industry Group (DTEG) is specialized in FGD for DeSOx, SCR/SNCR & DeNOx technology and are in this business for last more than 10 years. DTEG entered in Indian market with its subsidiary company Datang Technology & Engineering India Ltd, registered in December 2013.

Businesses:

 DTEG – Specilized in Environmental Protection Services.  CDTE – CDT’s Overseas/Domestic project entity to provide comprehensive One-stop BOT/EPC (+F) services.  DTEI – CDTE’s Indian subsidiary to provide Environmental solution services in the areas of FGD, DeNOx & dust removal.

Datang Environmental Industry Group’s Major Achievements

• Completed installation of FGD for 183 units of Power plants of total 140 GW. • Completed installation of Denox for 153 units of Power plants of total 56900 MW. • DTEG has commissioned 1st FGD system in India of 600 MW unit of ILFS Power project of 2X600 MW at Cuddalore Tamilnadu. • DTEG also has vast experience of operation and Maintenance of FGD system for many power plants in China.

“Committed to efficient generation of Power with sustainable form on Pollution Control” Datang Environmental Industry Group, China

Datang Technologies & Engineering India Pvt Ltd, India

No. 120 Zizhuyuan Road, Haidian District, Beijing 10097, P.R. (+86)10-58389999 (+86)10-58389810 www.cdte.com.cn

Room No. 2, 2nd Floor, Shreeram Bhuvan 772, Mumbai – 400014, Mb. +91 9910072333

TRADE CODES FOR SUCCESS

Chinese firms must adopt practices essential for success in Indian market 40

â&#x2013;ª July-Aug 2018

Lack of proper planning, refusal to engage local consultants for market understanding, lack of trust, slow decision-making and short-term goals are some of the major factors responsible for the inability of many Chinese manufacturers to make a mark in India

Chinese companies are slow in decisionmaking. They miss out on opportunities that come through big government initiatives in India, like Smart City, Housing for All, Digital India, Delhi Mumbai Industrial Corridor among others. Whenever a new initiative/project is announced, other foreign companies always try to reach out to the concerned department at the earliest and get the first moverâ&#x20AC;&#x2122;s advantage. The Chinese rarely do this, and hence miss the opportunity

Irfan Alam is Member Secretary of India China Economic and Cultural Council (ICEC). With his project coordination and management skills, he is a key resource person to ICEC. Irfan has extensively worked on India-China trade-related issues.

ď Ž Irfan Alam

nvestments by Chinese companies in India have been on the rise in the last three to four years. But a disproportionately large number of Chinese firms continue to see their attempts to make a niche in the Indian market fail. Some of the biggest and most successful Chinese companies have not been able to replicate their success in India.

During my last ten years of working with India China Economic and Cultural Council (ICEC), I have interacted with many Chinese companies. Some of them were already doing business in India. Others were planning to enter the Indian market. The fundamental flaws in their approach are apparent. Chinese companies follow the economy-pricing strategy with minimum marketing expense. I have come across many companies who ask us to generate business for them. They suggest that after

July-Aug 2018 â&#x2013;Ş

TRADE CODES FOR SUCCESS

A large majority of Chinese firms don’t have any concept of hiring consultants. They want to do everything on their own. This is doable in China, because they understand the local market and systems. But to expect that you will accomplish everything on your own in a different country is an illusion

we get them some good order, they will give us commission. Maybe that is how they work in China and have been successful. I have had to repeatedly tell them that in India, this model doesn’t work. This is the wrong mindset to enter a new and complex market. Surprisingly, barring some exceptions like Vivo and Oppo, Chinese companies continue to follow the same model in India. Recently, I was talking to someone in the top management of a Chinese water purifier company, which entered the Indian market a few months ago. I was surprised to learn that they have not allocated any budget for marketing. I told the gentleman that water purifier is a very competitive market, and you need to smartly market your product. His response was, “We didn’t market our product in China. Still we are among the top five companies.” He was convinced that India is similar to China, and that

▪ July-Aug 2018

he does not need to change his business model. He was reluctant to hire the services of a digital marketing agency for promotions. He will realize its value in terms of sales soon enough. There are other reasons too, for the failure of most Chinese companies in India. The significant factors here are lack of proper planning, refusal to engage local consultants, lack of trust, slow decisionmaking and short-term goals. Chinese companies looking for a foothold in the Indian market must inform themselves about the business opportunities for their products/service, market size, government policies and relevant procedures for their business. At ground level, the practice is to the contrary. Many Chinese companies come to India without having a clear plan and focus in place. Local competition is plenty, savvy, and often ruthless. There are also other foreign competitors, trying

to get a share of the pie. If you’re not on top of your game, it will show much faster in India than anywhere else. One of the reasons for the failure of Chinese companies in India is that they don’t have the concept of hiring consultants. They want to do everything on their own. This is doable in China, because they understand the local market and systems. But to expect that you will accomplish everything on your own in a different country is an illusion. Such an attitude is perhaps because the Chinese have very low trust in Indians. If a consultant advises them on something, they don’t trust him. They don’t realize that India is a big and complex country. They need support and guidance of people who have the local knowledge, expertise and the networks to help them in establishing their business. Succeeding in the Indian market requires patience – perhaps much

Many Chinese companies come to India without having a clear plan and focus in place. Local competition is plenty, savvy, and often ruthless. There are also other foreign competitors, trying to get a share of the pie. If you’re not on top of your game, it will show much faster in India than anywhere else

more than anywhere else. Most Chinese companies assume that India is waiting for them and their products, and that they will make big bucks overnight. This is the wrong mindset to enter India. The corporate sector must have the wisdom to recognize that what makes sense in one country may not make sense in another. Localizing your product is very important. Another major factor for the failure of some Chinese companies is that they have short-term goals. Chinese companies fail to realize that it will take time to make an impact in the Indian market. They are unwilling to spend the time and the money necessary to stay on. They want to make quick money and leave. Other foreign companies develop their business with long term goals. You need to be patient in India to get good returns. The business will not come through quick returns, but through building relationships. Narrow

and short-term business plans don’t work in India. The famous international brands in India didn’t become household names overnight. It took them decades to establish their name and credibility. Chinese companies also fail to understand that no matter how successful you have been in China, your brand or name means nothing in India. Many Chinese companies that have tasted success in other countries expect that they can launch their product/services without any adaption to the Indian market, and people will buy their stuff in droves. On the contrary, in India, China has become synonymous with cheap and substandard goods. Chinese companies are slow in decision-making. They miss out on opportunities that come through big government initiatives in India, like Smart City, Housing for All, Digital India, Delhi Mumbai Industrial Corridor among

others. Whenever a new initiative/project is announced, other foreign companies always try to reach out to the concerned department at the earliest and get the first mover’s advantage. The Chinese rarely do this, and hence miss the opportunity. Cultural differences are a challenge too. Chinese companies should find a way to comprehensively integrate into the local environment, and learn Indian culture and customs. If we have failure stories among Chinese companies, we have success stories as well. Chinese brands like Huawei, ZTE, Vivo, Oppo, Xiaomi are now very popular in India. Over the years, they have established themselves, and enjoy a good market share in their sector. This proves that despite the challenges, there is hope for Chinese companies to succeed in India. It’s all about learning from mistakes and moving on, in business and life both. 

July-Aug 2018 ▪

YOUTH CHINA LOVE

I am an

Indian

but my heart lives in

China!

 Resham Bhambhani

y heart lives in China because I love Mandarin. Mandarin has opened my eyes to a whole new world – the world of China. This world captivates me. It charms me and inspires me to learn about it more and more. I have been learning Mandarin, and also about Chinese culture for about two years now. I have never been to China, but I feel China is no strange country for me. I have a successful blog in Mandarin. And this blog has played a major role in shaping my love for China. I remember how things changed for me soon after I started my blog! My first blog was a travelogue. I wrote about my travel stories in Thailand, where I met

▪ July-Aug 2018

many Chinese. My Chinese viewers and friends were literally blown away to see an Indian writing blogs in Mandarin! The responses on that blog were massive! The general impression among people is that the Chinese are very unfriendly, especially towards Indians. But I have found it to be a wrong impression. Culturally, I’ve found the Chinese to be very friendly. They feel happy when they see an Indian writing in fluent Mandarin. My posts were flooding with their Comments “加油” which means “Keep going” in English. I remember that some of my Chinese friends were so overwhelmed by my blog posts that they even sent me postcards and encouraged me. Without further ado, my second blog was on 排灯节（Diwali festival). I could feel how Chinese viewers connected my second blog with their 春节（Spring

Festival）This is because fireworks are common to both festivals. After my blog, the Chinese were very eager to know about Diwali, the most popular and biggest festival of the Hindus. They wanted to know in detail about how we Indians celebrate Diwali. The photographs of Rangoli which I posted on my blog were a huge hit! The Chinese asked me many questions regarding Rangoli. They regarded it as a kind of sand art and asked me if they could learn this art in China. I have noted that the Chinese are fascinated to see something related to Indian art. And my Indian viewers were happy to see how beautifully I used Chinese language to portray Indian culture on Chinese platforms. Chinese buddies wanted to make me their study partner. I was amused by their interest, and I knew this

was because of my blog in Mandarin. This journey has been wonderful for me, but it was never easy. I remember that I used to chat with the Chinese on HelloTalk (an application) and ask them to edit my writings, so that I could post them free of errors. Another big problem was to connect with more and more Chinese. I published posts on Chinese platforms so that I could reach out to them in large numbers. Many times, I have encountered the question that how difficult is it to learn Mandarin, as compared to Hindi and English. I must admit that I find Mandarin harder to learn as compared to Hindi and English, but manageably so. I feel that Mandarin is logical and consistent. I approached the learning of Mandarin through two methods. One method is called ‘study’, and the

other is called ‘immersion’. ‘Study’ means memorizing vocabularies, doing regular drills for familiarization with the language, practicing grammar and listening to Chinese podcasts. ‘Immersion’ means using Mandarin in our daily life and in real contexts. This means having conversations with the Chinese, or deciphering signs etc. My enthusiasm for learning Mandarin was so high that I started practicing both these methods at home. The ‘study’ method was no problem. My Mom found me diligently poring over ways to learn Mandarin. It was my ‘immersion’ method that led to funny scenes at my house. I used to give my mother headaches by talking to her in Mandarin after class. At first my mother was amused. But my ‘immersion’ method wouldn’t stop, and finally my mother could see nothing

funny about it. She used to get totally exasperated with me and tell me to stop. “I can’t understand a thing you say,” she would shout, every time I started using long sentences in Chinese to express what I wanted to say. Now I look back at those times and laugh. Happy times they were, and that is how I learned the world’s most difficult language. I relate to this Chinese quote- “世上无事，只怕有心人” Which means: Nothing in this world is difficult for one who sets his mind to it!  Resham Bhambhani is a second-year student of Chinese (Hons) at Doon University (Dehradun). She recently finished a two-month internship at India-China Economic and Cultural Council. She owns a Chinese blog website-www.giveyourselfaholiday.com

July-Aug 2018 ▪

TRAVEL INDIA CHINA

Ought to know each other better: India and China

Posing while playing Holi at friend's place in Chandigarh. L to R : Lovely, Lawrence, Raining, Jaspreet.

 Jaspreet Kaur

y first direct experience with Chinese people was in 2008, when I met a Chinese student of architecture in a Buddhist monastery in Bir, a picturesque village in the mountain state of Himachal Pradesh. Yes, we all read about Fa-hein in school – the Chinese monk who travelled to India, mostly on foot in the early 5th century. But I had never met a Chinese. Pleased to meet this young gentleman

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from China at Bir, I couldn’t help asking him a naïve, yet politically expected question – why had he chosen India for his travels? I was pleasantly surprised by his response. His name has faded from memory, but I distinctly remember his reply. “We, China and India, are neighbours and we ought to know each other better. This may not happen if we depend too much on newspapers and TV. But meeting each other will help.” I was impressed by the insightfulness of this man, about half my age. I asked him about his experience with Indians. He said he felt welcomed and was treated kindly wherever he went. He

had observed that he attracted more curiosity than a tourist from the West. Not surprising. We get far more Western than Chinese tourists. My second experience with the Chinese was seeing smartly dressed soldiers at Nathu-la border in Sikkim. A young friendly playful soldier had not allowed the cold to dampen his spirit and wanted to see all things Indian, especially the currency. I cannot be sure what made him walk away with one currency note a fellow traveller showed to him on his request. Perhaps curiosity about the neighbour that was at one step distance from him – so close and yet so far!

Confucius standing tall in Quingdao

Contact with the Chinese remained limited to these two instances for long. Then a couple of years ago, I came across hordes of Chinese tourists during my travels to Europe, especially Italy. Communication with them was difficult due to language barriers, and their preoccupation with taking selfies (not that the Indians lag behind in this new self-obsession!) Other than the little we were taught in middle school about China’s history and its trade, art and culture, the mighty dynasties, architecture, silks, pottery, terracotta, paintings etc, my other source of knowledge about the China and its

A ride in the tractor after Holi. Raining and Jaspreet

people was limited to reading Pearl S Buck! But now I started feeling an urge to go see this big country which is playing such a significant role in world economy and politics today. Most importantly, I felt that I was travelling to far off countries without having seen the exotic land which is our neighbour. So a trip to China was planned. I took off for Beijing soon after my return from Europe in 2016. Undeterred by ‘Beijing cough’ and asthma attacks that hit me soon upon landing, I spent about a week in the capital city. Then I moved on to Tianjin, Taishan, Quingdao, Rizhao, Huangshan and finally flew back home

from Shanghai. In Beijing I visited the Summer Palace, the Forbidden City, Tiananmen Square, 798 Art Zone, and the grandest of the grand – the Great Wall of China. The Great Wall filled me with more awe than any other monument I had set my eyes upon. Beijing is etched in my memory not only because of these architectural and artistic wonders, but because of the warm and kind hospitality of the people I met there, especially my friend Kerry and her friends who then became my friends also – Raining and Lawrence. My first hosts were a smart and educated couple who felt that my visit to

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TRAVEL INDIA CHINA

Sightseeing in Beijing

Preparing Chinese meals from fresh vegetables. Jaspreet, Lawrence and Raining

The Chinese put in almost the same time and effort into cooking as the Indians, and love their meals

the Great Wall could land them in trouble. They didn’t explain to me the reason behind such a thought. Strangely, they felt they had to accompany me whenever I went out for sight-seeing. Leaving their comfortable home was my way to defend my freedom. But it turned out to be not a very good decision initially. My next host was a party person and that didn’t suit me either. I found myself locked out one night when I returned from my day visit to the Great wall.

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Unable to find a hostel, I sought Kerry’s help. Kerry, a lovely 23-yearold woman from Beijing, had stayed in my house in Chandigarh some months ago, after establishing contact with me through a hospitality website. Even though Kerry was travelling in Russia at that point of time, her help was prompt and quick. Soon after I contacted her to help me find a hostel in Beijing, she called her friend Raining, who also lived in Beijing, and requested her to guide me.

From her call, a beautiful story of trust and friendship began between Raining and me. True to her name, Raining rained kindness! After she heard from Kerry that I was in trouble, Raining ordered a cab for me and welcomed me into her home with open arms. For the next few days that I stayed with her, she guided me, cooked for me and was an extremely thoughtful host. I am allergic to gluten. Raining recorded my gluten allergy in Mandarin on my phone, so that I could play the audio in the restaurants at the time of ordering food. Another disaster occurred when my debit card stopped working. Raining’s boyfriend Lawrence offered and lent me money, without my asking for it. Had Lawrence not done this, I might have had to cancel the rest of my visit and return home early. Returning their money online was a task that I could not handle it on my own.

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Raining ordered cabs for me whenever they were needed, guided me about places to visit, offered me unlimited stay in her home, shared food and cooked Chinese dishes for me. She was so thoughtful that she even recorded my food allergies in Mandarin on my phone, so that I could play the audio in the restaurants at the time of ordering food I sought help from my best friend Ian, who lives in Scotland, for transferring the money. The process took almost a month. Not once in this long period did Raining and Lawrence get impatient. When I left Beijing, I wished that one day I could return the kindness and hospitality Raining and Lawrence had extended to me. I got lucky the very next year. In 2017, Raining and Lawrence visited India. Lawrence had apprehensions about their safety. Actually he worried more for Raining than for himself. But dear Raining had watched too many Bollywood films, and had decided she wanted to play Holi in India. She was also bent upon buying the lovely dresses and jewellery like the ones she saw in the films. I hosted Raining and Lawrence in Chandigarh upon their visit to India, before they left for Amritsar, Agra and Jaipur. They were very happy that so many of my friends invited them to their

Highlight of the trip - visit to the Great Wall

homes, during their stay in Chandigarh. It gave them a feel of Indian homes, and they loved it. One of the most interesting times for Raining and Lawrence in India was during a random walk in a village close to my home. An elderly farmer and his family, who lived in the village, invited us to their home. A ride in the tractor on their farm was followed by a lavish tea and great conversations. Raining and Lawrence loved it that the farmer insisted that they have fresh cow milk, and not tea. Almost half the village gathered at the farmer’s house to interact with them. There was a long session of questions and answers about India and China. When we sought leave, the farmer wanted to give us money to go eat some mithai (sweets). This was as per the Indian custom where elders give money to children or younger ones to treat themselves. This loving gesture was so touching that it brought tears to Lawrence’s eyes.

He later told us that it was difficult for him to imagine such hospitality being offered to strangers in any other part of the world, including China. Lawrence is a fine man and I hold a lot of respect and affection for him. But on this point, I disagree with him. My travels have shown me that threads of kindness and trust run in people all over the world – whatever be their nationality, colour, religion, ethnicity, language. My contact with people like Lawrence, Raining, Kerry and the strangers who showed me the way in the streets of China, and experiences in other parts of the world form the basis of this statement. I feel sure that the experiences of Lawrence and Raining would validate it.  Jaspreet Kaur is a globe-trotter, and has visited about 35 countries in Europe, North America, South America, Africa and Asia. Travelling enriches her and nourishes her soul, says this Gypsy Queen.

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INDIA-CHINA MIGRATION LINKS

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KOZHIKODE TO CHINA

IIT Prof Unearths 700-Year-Old Link That Will Blow Your Mind! Dr Joe Thomas Karackattu is an assistant professor at IIT Madras, whose interest in the historic connections between Kerala and China began from ‘Cheena Vala’ and ‘Cheena Chatti’.  Lekshmi Priya S

how about we reduce it down to a single Malayali? The very first Malayali to ever visit China! he distance between This amazing discovery was made Kerala and China is roughly courtesy the relentless pursuits of one over 4,000 km. But if you Indian academician, who based his chase entered many a home in coastal Kerala—with their on the idea that such migrations must have occurred – even all those many Cheena Vala (Chinese fishing net), or even an average Malayali kitchen – with its centuries ago. And guess what? His idea found vindication indeed! Cheena Chatti (Chinese frying pan), you Dr Joe Thomas Karackattu is an might imagine the two civilizations really assistant professor in the Humanities and have no distance at all. Social Sciences department of the Indian And while certainly, Chinese made Institute of Technology (IIT) Madras. products are all the rage in our modern His interest in the historic connections world of planes and diesel-powered between Kerala and China began (where container ships, the connection I am else?) from the earlier mentioned Cheena referring to here is quite ancient— Vala and Cheena Chatti. from centuries and centuries ago. It is After studying various travel accounts incredible to consider—especially since of diplomats who traveled between while nowadays you can fly to Beijing Kozhikode and China during the 14th in a day, hundreds of years ago a trip like and 15th century, Dr Karackattu started this would be an adventure of a lifetime— nursing the idea that some sort of assuming that you reached there migration of normal people must have alive, of course. occurred between the two regions during And if the scope of the civilisational this time. connections feel too vast to absorb—

The iconic Cheena Vala. Credits: Tim Moffatt/Flickr

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INDIA-CHINA MIGRATION LINKS

Dr Joe Thomas Karackattu

“Because of such well-documented accounts of diplomatic and cultural exchanges between the port cities of Kozhikode, Kochi and Kollam and China, the idea of migration between these regions seemed to me as something that could have happened. I could say this thought had been the trigger to embark on a journey that would take me all the way to China and uncover some fascinating links and connections that somehow failed to make it to the annals of recorded human history,” says Dr Karackattu, speaking to The Better India. ‘Guli’s Children‘ is a 43-minute documentary shot and edited by Dr Karackattu, which sheds light on cultural-historical ties, physical artefacts and, most importantly, traces of human genealogy that survived between Kerala and China. “Throughout the time I spent researching for the film, I’d come across quite a few accounts of migration from Kerala to China. Also, local people I interviewed casually mentioned the occurrence of the same. What had fuelled my fascination even further was the idea of tracing these migrants and what must have happened to their descendants. This thought never left my mind,” says

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Following two years of research and nearly 20,000 kilometres of fieldwork across India and China, Dr Karackattu put together all his findings as a film with the intention of presenting a research-infused visual learning material for students and researchers studying ancient IndoChina relations Dr Karackattu. And perhaps nothing could have been a more gratifying moment for Dr Karackattu, when he finally managed to trace the 14th generation descendant of the first Malayali who travelled to China from Guli (as Kozhikode was documented by the Chinese travellers in

their records). “The family had been extremely forthcoming about my research. Ma, who is the elder in the family, showcased their family’s Jiapu, which is a carefully collated record of ancestral history containing extensive records on interfamily marriages and likewise. Looking

Ma’s family Jiapu, a carefully collated record of ancestral history containing extensive records on inter-family marriages and likewise. Courtesy: Dr Karackattu

Stills from the film. Courtesy: Dr Karackattu

at the both of us, Ma’s wife said, ‘You both are Lao Xiang‘, which meant fellow home-towners in Chinese. That had been an endearing experience I would always hold close to my heart,” reminisces Dr Karackattu. ‘Guli’s Children’ recounts this reconciliation of individuals from two

entirely different worlds who incredibly happen to share a common lineage – forgotten over time and distance. The film was conceived as a work of non-fiction and has been screened previously, on invitation, in the United States (at Yale University, NYU, DUKE University, SUNY Binghamton & the

Settled in the province of Guangxi in Southern China, ‘Ma’ and his family were as fascinated to meet Dr Karackattu as the professor was to find them New School), Singapore (NUS), Denmark (University of Copenhagen) and in France (University of Sorbonne Nouvelle), apart from screenings across India and China (in Beijing and Shanghai). Besides teaching at IIT (M), Dr Karackattu also holds the distinction of being a ‘Fox Fellow (2008-09)’ at Yale University and was recently selected as one of the ‘India-China Scholar Leaders’ by the India China Institute at the New School, New York. His latest work on the history of boundary-making between India and China was published in the Journal of the Royal Asiatic Society (Cambridge University Press, 2018). You can follow the film’s screening updates on Facebook here. To know more, you can write to Dr Joe Thomas Karackattu at joethomask@aya.yale.edu. (Edited By Vinayak Hegde)  This article was first carried on the link, https://www.thebetterindia. com/152778/news-kerala-china-iitprof-gulis-children. The Better India is a website featuring all positive news about India, including the areas of social development, art, travel, environment, women empowerment, NGOs, education & much more.

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MOVIE REVIEW

‘Dying to Survive’

How a Leukemia Patient & an Indian Cancer Drug Rocked China A movie that is receiving standing ovations in China, ‘Dying to Survive’ is based on the true story of Lu Yong who was arrested for selling ‘illegal’ Indian drugs.

Movie: Dying To Survive (2018) Genres: Drama Release: 2018-07-05 (China) Director: Muye Wen Writers: Muye Wen Language: Chinese | English Stars: Beibi Gong, Yiwei Zhou, Zheng Xu, Chuan-jun Wang

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 Rinchen Norbu Wangchuk

ave you watched the famous Oscar-winning movie, Dallas Buyers Club? It is the story of Ron Woodroof, an AIDS patient diagnosed in the mid1980s. Unable to buy exorbitantly-priced US government FDA-approved drugs, Ron Woodroof (played by Matthew McConaughey) smuggled cheaper, yet effective, generic drugs from outside the country to assist other AIDS patients. Last month, popular Chinese actor and director, Xu Zheng, released Dying to Survive—a movie which follows a similar plot. It chronicles the life of businessman Lu Yong, who was arrested for selling cheaper, ‘illegal,’ yet highly popular, Indian cancer drugs in China to patients who couldn’t afford the prohibitively priced Western-approved drugs. The movie is a smash hit, amassing nearly $200 million on the opening weekend. Indian generic drugs are not yet approved for sale in China, although that may change soon. The story of Lu Yong is remarkable. In 2002, he was diagnosed with leukaemia and was prescribed Novartis-manufactured Gleevec, which costs approximately 25,000 Yuan (Rs 2.5 lakh) a bottle. After nearly spending nearly Rs 70 lakh of his own money, Lu switched to Veenat, an Indian cancer drug which is not only as effective as Gleevec but is also sold at one-tenth of the price. Besides treating himself, Lu also made it his mission to assist hundreds of other cancer patients by selling them Veenat.

In 2014, the Chinese authorities arrested him. According to China Daily, however, the Chinese Supreme Court took a lenient view of Lu’s case considering his health and the fact that he had helped hundreds of other patients. The court went on to pronounce that selling a small amount of unlicensed foreign drugs that don’t hurt patients isn’t a crime. Many scenes of the movie were shot in Mumbai, from where the drugs are smuggled in ships to Shanghai. Pharma major Novartis is subject to some heavy criticism in the film, showing how their prohibitively-priced drugs have a debilitating effect on the Chinese healthcare system. In fact, there is one scene where an executive from the Pharma major is seen sitting in meetings of the Shanghai police, looking into how to crackdown on the sale of Veenat in China. In another scene, Xu reprimands a police officer for misbehaving with a protestor/cancer patient outside Novartis’ office. “What is his crime? He was only struggling to survive,” he says. Earlier in May, the Chinese government announced that it had removed import duties on 28 medicines, including critical cancer and cancer alkaloid-based drugs, from India. “We believe the expansion of imports and slashing of tariffs on anti-cancer medicines will usher in great opportunities for India and other countries in the region,” said Hua Chunying, the Chinese foreign ministry spokesperson.  Credit: THE BETTER INDIA

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GUPSHUP

Indian Bheja, Bollywood Fry Full-on Bollywood entertainment PLUS Bollywood craze PLUS madcap comedy. This is Happy Phirr Bhag Jayegi, a Bollywood release with Chinese characters and locations. It takes pizzazz to take a grip on China’s new-found craze for Bollywood movies, and spin a comedy around it. Add Chinese actors for tadka. In Happy Phirr Bhag Jayegi, Sonakshi Sinha is abducted by Chinese agents, and taken to China. The agents are not convinced about her real identity, so they abduct Jimmy Shergill, Piyush Mishra and Jassi Gill too. All are in China now. Jimmy Shergill’s glowering ‘Maka Chu!’ to a Chinese agent is a riot. Chinese who have lived in India for some years and learnt about our culture will know why. Shergill’s Punjabi reference to the Chinese agent, ‘Tera Bhai’, is priceless. Again, very cultural context. There are other gems from Shergill. “You affair my wife... You make her Libran, Labrador…You have Labradog affair with her!” he tells a Chinese woman cop. And then the hilarious “Bhein de Cheene!” Let us see if the movie makes millions in India and China. The trailor was side-splitting fun.

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GUPSHUP

Cheeni come

The posts on icecindia, the Instagram handle of India China Economic and Cultural Council (ICEC) gained much in popularity over the last two months. Witness the creativity of Aishita Shukla, an Associate at ICEC, and Resham Bhambhani, an intern from Dehradun â&#x20AC;&#x201C; both in love with Mandarin and Chinese culture. Resham, barely out of her teens, made the funny toons with the PicsArt app. The series focused on Chinese quote of the week, Chinese character (alphabet) of the week, similarities between Indian and Chinese culture, and fun facts about both countries. The posts got a good response from China, and were much appreciated.

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We’re On The Ball

India’s senior national football team will play China in an international friendly match in October, as part of preparation for the 2019 Asian Cup. The Indian team, ranked 97, will travel to Beijing to play the Chinese national team, ranked 75. The last time Indian and Chinese footballers faced each other was 21 years ago, during the Nehru Cup in Kochi in 1997. China and India are among the fastest emerging football markets globally.

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RECENT ICEC EVENTS

Yunnan to Explore Business and Trade Opportunities in India

ndia China Economic and Cultural Council (ICEC Council) organized “India-Yunnan Business Promotion Seminar” on July 23, 2018, in New Delhi to promote economic, trade, cultural and academic exchanges and cooperation between Yunnan and India. The event was organized in association with the Department of Commerce of Yunnan Province and China International Fair for Investment and Trade. The distinguished guests who participated in the seminar included Mr Kou Jie, Deputy Director General, Department of commerce of Yunnan province; Ms Deng Xiaoli, Director of Foreign Investment Management; Madam Feng Yan, First Secretary, Economic & Commercial Counsellor’s Office from the Embassy of the People’s Republic of China and Mr Wang Jupeng, Representative Assistant, China Council for the Promotion of International Trade Representative Office in India. In her welcome address, Ms Feng Yan from Embassy of People’s Republic of China thanked the media, delegates and other official dignitaries present. She said that the upcoming exhibition is an excellent opportunity to extend business cooperation between Yunnan province and India. The governments of both the countries are keen to facilitate more trade and investments. In recent years, with the joint efforts of the leaders and peoples of two countries, China-India relations are developing in an all-around manner. The upcoming 20th session of China International Fair for Investment & Trade (CIFIT), will further enhance international trade between China and India, she said.

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Enhancing Cultural Exchange between India and China

Mr Kou Jie said that in the last decade, Yunnan has further enhanced the friendly exchanges with South Asian countries, with improved bilateral relations and remarkable economic and trade achievements. He invited the doyens of the Indian industry to explore Yunnan as an investment destination. He gave an elaborate presentation on the prominent industries in Yunnan like Green Energy, Logistics, IT, New Material Industry and Advanced Equipment Manufacturing. Ms Cai Weihua shared detailed information about the CIFIT Expo which is going to take place in Xiamen (Yunnan) in September 2018. “I sincerely hope that relevant authorities of India would render their strong support to the next session of CIFIT, which will be crucial for the success of this event,” she urged. In his concluding remarks, Mr Saqib, Secretary General of ICEC Council, said that the seminar has greatly helped in getting to know more about Yunnan, and more specifically about the business opportunities that exist in Yunnan. Such interactions should take place more frequently, which will help in bridging the gap between the two nations, said Mr Saqib. He further added that CIFIT Committee should do more focused seminars such as this one, and collaborate with more institutions towards inviting Indian business enterprises. He ended the seminar by thanking the participants, the CIFTI Committee, Department of Commerce of Yunnan and Indian Importers Association for their invaluable support in organizing the seminar.

n June 27-28, 2018, ICEC hosted delegates from Hubei and Sichuan province respectively. Both the delegations highlighted cultural exchanges between India and China. On June 27, Ms Ding Manluo, Vice Chief, Xiangyang Municipal Committee of the Chinese people’s Consultative Conference and her colleagues Mr Liang Youzheng, Committee Chairman of Social and Legal affairs Division, Xiangyang Municipal Committee of the Chinese people’s Consultative Conference, Mr HU Zeng, Chief, Xiangcheng District of Xiangyang Municipal Committee of the Chinese people’s Consultative Conference, Mr Wang Ziliang, Chief, Fancheng District Xiangyang Municipal Committee of the Chinese people’s Consultative Conference, Mr Zhu Huawei, Deputy Director General , Xiangyang Environmental Protection Bureau and Ms Du Xiaoxi, Deputy Secretary , Xiangyang Municipal

Committee joined ICEC for a small talk on India-China culture. On June 28, 2018, Mr Wang Chao, Leading role of Departments, Chongqing Federation of Literary and Art Leading Role of Circles and his team of artists met with ICEC and promoted their calligraphy paintings. Calligraphy and painting are regarded as two treasures in China. The delegation was acquainted with the rich Indian heritage of art and culture. Discussions on promoting arts from both the countries were made.

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Meeting with The Delegation From The Suining City

n June 22, 2018, ICEC India hosted delegates from the Suining City (a prefecturelevel city of eastern Sichuan province in Southwest China). The delegation was led by Mr Zhou Hong, Suining Municipal Committee of the CPC along with his colleagues Mr Huo Daojun Director, Suining finance Bureau, Mr Luo Qinglun, Director, Suining Municipal Foreign &Overseas Chinese Affairs Office, Ms Xiang Li, Director,

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Suining Land and Resources bureau, Mr Hu Mingchao, Mayor, Daying County Government and Mr Du Sheng, Member of Standing committee, Shehong County Committee of the CPC. ICEC introduced the strategies and the working of ICEC to Mr Zhou Hong, Suining Municipal Committee of the CPC. The discussion was based on hightech personal training, modern electronic information technology, modern agriculture and land management.

The delegates from Suining government introduced the development plans of Suiningâ&#x20AC;&#x2122;s electronic information, machinery and equipment, new materials and other traditional industries such as the food and textile industries of Suining. The meeting concluded when the Suining delegates inviting ICEC to encourage participation by bringing delegates to the Western China International Fair, which will be held in Chengdu City, Sichuan from September 20-24, 2018.

Sharing Ideas on Yunnan-India Cooperation

n July 3, 2018, ICEC hosted delegates from Yunnan Province, China. The head of the delegation Ms. Zhang Hongxia, Deputy Counsel, Yunnan Department of Commerce and her other colleagues from the departments of commerce and agriculture were part of the delegation. They came with the intent to gain knowledge about the three major industries of India â&#x20AC;&#x201C; tourism, agriculture and food processing. Companies from the Animal husbandry sectors were also a part of the delegation. They were very keen to know about the Indian meat market. ICEC shared a brief introduction of the market size of these industries with them. The delegation was then introduced with the top companies which are in this business. They were also told about the future prospects and the current government

policies. They were informed that India is the largest beef exporter in the world, followed by Australia and the US. India has generated 931 million USD from its meat export market during the first quarter of 2017. In terms of agriculture, the huge potential for technology transfer and increased participation in agricultural fairs was discussed. The Yunnan Delegation came with the motive of increasing the existing YunnanIndia trade of 40 million USD. ICEC suggested that there should be increased investment in the tourism industry, so that more and more people from India visit China and vice-versa. For this, a joint cooperation between the Buddhist tourism landmarks in China and India to increase pilgrim exchange was proposed. Both sides were hopeful that after the Wuhan summit, trade relations between India and China will gradually increase.

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Special Screening of a Documentary Film on India-China Relations

n July 4, 2018, ICEC organized a special screening of a documentary film “Guli’s Children” in New Delhi. His Excellency Zhang Jianxin, Cultural & Educational Counsellor, was the chief guest of the evening. At the beginning of the event, filmmaker Dr Joe Thomas Karackattu gave the audience a brief introduction about his research and experiences during the making of this documentary film. The movie screening was followed by a warm speech given by the Cultural & Educational Counselor. He encouraged cultural exchanges between the two countries through initiatives like these. The event was followed by a question-answer session, in which scholars and diplomats participated. Spanning over two years of research, and nearly 20,000 kilometers of fieldwork across India and China, the film is a work of non-fiction. The film has been screened previously, on invitation, in the United States (at Yale University, NYU, DUKE University, SUNY Binghamton & the New School), Singapore (NUS), Denmark (University of Copenhagen) and in France (University of Sorbonne Nouvelle), apart from screenings across India and China (in Beijing and Shanghai).

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