INFOCUS | INTERVIEW | NAVEEN SRIVASTAVA
What kind of change have you witnessed in East China’s business environment? The East China Region or the Yangtze Delta River region that our consulate covers, comprising Shanghai and provinces of Zhejiang and Jiangsu, remains one of the major economic powerhouses in China. The region, which has both excellent infrastructure connectivity, and is home to some of the largest sea-ports in China, is one of the most favored entry-points for foreign companies who come to China. The local governments have made investments in the development of regional infrastructure to connect and integrate the region. This has had a multiplier effect on economic growth. The region is also trying to evolve its economic structure and gradually move up the value chain, thus moving away from traditional manufacturing. This is also happening partly due to rise in labor costs. I see this trend continuing over the next several years. Take Shanghai, for example, which has been working to develop into an international economic, financial, trade and shipping centre as well as a base for advanced manufacturing such as electronics, automotive industry and shipbuilding. The recent announcement that Shanghai will set up a Free Trade Zone – in fact the first on mainland China – further shows that the region will continue to further open up. How do you ensure promotion of trade between India and the provinces your consulate covers? One of the main areas for us here at the consulate is to promote trade, economic and people to people exchanges. The East China Region accounted for almost 40% of the overall India-China bilateral trade in 2012. In terms of trade and economic relationship, our efforts have been to not only promote two-way trade but also two-way investments. The consulate in cooperation with local chambers of commerce in various cities in our region organizes regular seminar/workshops to disseminate information about investment
opportunities in India for Chinese companies as also the regulatory frame work for FDI in India. Apart from Shanghai we have also been organizing such seminars in tier II and III cities in this region. Have these efforts borne fruit? We are seeing signs of increasing number of Chinese companies planning to invest in India. The reasons are several in my view. Some of these companies already have business relations with Indian companies, for example, as a supplier for many years and are now looking to build on that
FOR INDIAN COMPANIES THAT PLAN TO ENTER IN CHINA, THE CONSULATE PROVIDES ASSISTANCE IN TERMS OF BRIEFING THEM ABOUT THE GENERAL INVESTMENT CLIMATE, RULES AND REGULATIONS. WE REGULARLY ORGANIZE PROGRAMS AND INTERACTIONS FOR VISITING DELEGATIONS FROM VARIOUS INDUSTRIES AND ORGANIZATIONS IN INDIA relationship by investing in India. In other cases it is the attraction of the huge market potential that India offers. Our focus is to encourage such Chinese companies and facilitate them in their plans to invest in India. What about Indian companies planning to have a presence in China? We also help Indian companies who already have a presence in China as well as those that are considering entering in China. Shanghai and the Yangtze River Delta region is already home to a large number of Indian companies, whose numbers now are about 150. These cover an entire spectrum – from IT companies,
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to those engaged in manufacturing here, to others who are mostly doing sourcing from China. The consulate works closely with Indian companies in our region and has regular interaction with them. Many companies also join us in our outreach activities in the region which provides not only an opportunity for our businesses and industries to explore opportunities but also to meet the local leadership and network. For Indian companies which plan to e nter in China, the consulate provides assistance in terms of briefing them about the general investment climate, rules and regulations. We regularly organize programs and interactions for visiting delegations from various industries and organizations in India. Trade apart, how do you ensure promotion of tourism and cultural exchanges? Enhancing people-to-people exchanges including tourism and cultural exchanges is an important part of our work. We have been organizing cultural events regularly not just in Shanghai but also in the cities in the neighboring provinces. For example, a few weeks back, we had organized an Indian food festival in cooperation with several Indian restaurants in Shanghai. Similar festivals are also organized in other cities and we also participate in the tourism related exhibitions in the region. We recently worked with the Shanghai International film festival to showcase several Indian films to commemorate 100 years of Indian cinema. This was the first time that such a large number of Indian films (18) were shown in the Film Festival in Shanghai. In addition we do regular screenings of Indian films at our consulate which attracts the young Chinese population. We now are planning to do such events with local universities too. Another aspect that we have focused on is organizing visits to India by Chinese print and audio-visual media. In the last year alone, there have been three visits by the two main media groups in Shanghai.
Mr Naveen Srivastava, Consul General of India, Shanghai along with Mr M P Bhardwaj, Deputy Consul General interacting with the exhibitors at India Pavilion.
Your consulate has posed trade dispute advisories on your websites… Trade advisories have been put up as a sort of cautionary advice for Indian companies when they trade with Chinese companies. The backdrop was an increase in the number of cases of trade disputes that we saw in 2009-10. The idea behind such advisories is to ensure that Indian businesses are fully aware of the picture and do their due diligence. It is certainly not to deter Indian companies from doing business with Chinese companies. We assist Indian businesses by responding to their trade queries, requests for verification of credentials of Chinese companies with whom they might want to do business and we also provide assistance in cases of trade disputes. For example, in 2012 alone we have responded to more than 250 trade queries from Indian businessmen. What would be your tips to Indian companies that are willing to trade with companies in East China? The most important thing for
Indian companies would be to do their homework in terms of verifying the background of the Chinese company with whom they wish to have a trading relationship. Our consulate can help Indian businessmen in this regard by verifying the credentials of local companies through the local authorities and Chambers of Commerce. They should also, if possible, visit the company to see firsthand and have a face to face interaction. Only when they are satisfied they should move ahead. There are companies that wish WR RSHQ DQ RIÀFH WRR« As regards establishing offices here, we would certainly encourage that. There is no better way to get a feel of the country and the potential that it offers. We have been and would be happy to provide advice to Indian companies who plan to enter China. I would also suggest to our companies/ businesses to participate in trade fairs that are held in China. There are a variety of such fairs and exhibitions which take place throughout the year. Participation in such fairs will not
only allow our business to build up networks but also help to promote India’s trade and expose Chinese consumers to Indian products. How, in your view, can both the countries come together as strong friends to serve an example to the region? Over the years our bilateral relations have become more mature and multi-faceted. While we have made good progress in strengthening our economic relations and people-topeople exchanges, I feel that there is still a lot of scope of further boosting these ties. Our Prime Minister has often said that there is enough space for both India and Chine to develop. Indian entrepreneurs and businesses should think seriously about expanding their presence in China and should be ready to seize the opportunity. Greater exchanges between peoples of our two countries – be it in trade and economic field, culture or tourism – will contribute to better understanding and will in the long run be beneficial to the overall development of a stable relationship.
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INFOCUS | INTERVIEW | YANG LING LING
NEW FLAVOURS OF FRIENDSHIP Chinese Chef Yang Ling Ling, 35, has been rustling up delicious dishes for over 10 years now. He worked in the different cities of Dragon Land before making an adventurous move to Ceylon in 2006. Since then he has been on a journey to explore and understand South Asia with an aim of building relations through his mouth-watering Chinese food recipes. The chef is presently working at Claridges Hotel, New Delhi, after a four-year stint in Bangalore. Garima Arora met Ling to understand how cuisine popularity can mark a new beginning for India-China relations and much more... For how long have you been in India? It’s been 6 years that I have come to India. Earlier I was working in The Oberoi Hotel, Bangalore for a few years before I moved to The Claridges in Delhi two years back. Why did you decide on moving to another country? I was given an opportunity to go to Sri Lanka and work as a senior
chef in a very well-known domestic restaurant. At that time I was young and ambitious, and wanted to see the world, meet different people, and explore new opportunities. My parents and other family members also supported me as they do even now. Hence I made the move. Have you got used to Indian lifestyle which is very different from China? Yes, I love India and everything about it. It’s so colorful and the lifestyle here is much relaxed as compared to China. I love Indian cuisine. In fact I have become so used to eating daal, roti, and sabzi that if I don’t eat it for three-four days, it feels as if something is missing. I like this “different” feeling. To what extent has the authenticity of Chinese cuisine been diluted in India? The Chinese food that I make has 30% Indian flavor and retains 70% authentic mainland flavor. Most of the ingredients are from China but still many ingredients like oil, chilli etc. are from India. In China we use different kinds of oils for different dishes such as sesame oil, chilli oil, fish oil, corn oil, sunflower oil, etc. Here in India we have to use some local ingredients which are liked by the Indian taste buds. Do you feel that Indians are depriving themselves of good Chinese food by compromising on the original taste? Indians like to have gravy and most of the Chinese dishes are dry. So I have to make the dishes in curry forms in order to set the taste and make the dish acceptable. Many times people ask for an additional bowl of gravy to eat with fried rice. Besides, a lot of oil is used in Chinese cooking and it is often visible on the top.
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For example, if you eat dishes like Gongbao Jiding or shredded chicken in China you will find a lot of oil in them. Here in India I cannot serve food with oil because 9 out of 10 people will complain if they see any trace of oil in their dish. Share your process of learning to cook ‘Indian style Chinese’. The most important thing is to study the local taste of the place. On and off I go to other Chinese restaurants in the city to see how they prepare and cook. I also ask local people about their liking of taste, and read cookery books to see what ingredients Indians use while cooking. Which food do you think is more nutritious, Chinese or Indian? What is your aim regarding food, do you want it to be tasty or healthy? For me food, irrespective of its form, should taste good. It’s not right to say that one food is more nutritious than another as the recipes that we use today are age old ones with a bit of alterations. Both Indian and Chinese cuisines have not been invented yesterday or today. They carry a history and the person who first made it according to the availability of vegetables and ingredients must have given it a thought and our bodies are already used to it. It’s mainly the eating habits which get reflected in a person’s health. Chinese are usually slim as their eating timings are different from Indians. In China, people usually take breakfast at 7 or 8 am, lunch at 12 noon and dinner around 5:30pm-6:00pm. After that they go out for long walks or different kinds of exercises such as group dancing, taiji practicing, kite flying or playing badminton etc. In India, people usually eat late and then go to bed straight away and hence they sport big bellies.
Which Chinese dessert is popular? Chinese cuisine doesn’t really have a wide variety of desserts. Chinese people usually prefer eating fresh seasonal fruits after dinner. In Chinese restaurants you can find some sweet porridge or Hong Kong desserts like Durian cake or mango custard. Do you think food brings Indian and Chinese people closer no matter how politically hostile we are at the borders? Food brings people closer. Chinese food is famous in India and is available at affordable prices. Many Indian restaurants have opened up in China in recent years and Indian cuisine is slowly becoming famous among Chinese people. “Curry” is the most popular among Chinese people and it represents India! According to you what are the differences between Indian and Chinese food culture? Dining out in China is more of a celebration where food is taken with drinks, usually beer or bai jiu. People are loud and it’s normal to get drunk, as it is believed that the more you drink the more gratitude you show towards your host. India on the other hand follows the British way of dining and eating, especially in restaurants. Where do you shop for vegetables and meat? I usually go to INA market to buy most of the stuff including vegetables, meats, spices and other ingredients. Which is one health tip that you would recommend? Enjoy your food, eat at a proper time, and drink hot water or green tea to wash away the fatty acids. Do not mix hot and cold food, i.e. avoid icy cold water with hot food. September 2013 India-China Chronicle |45|
INFOCUS|CHINA|BUSINESS
What kind of analysis did your organization do before setting up DQ RIÀFH LQ (DVW &KLQD" Initially we were acting as an agent/ middleman and helping overseas importers to source and buy from China. We came to know that there is a tax refund on each export from China and that Chinese exporters only pass on a part of it to the buyers. The key idea to establish a company in China was to target this profit and start to source from factories who normally do not export. This way we could make profit and still keep the same (or some times better) pricing for our clients. Additionally it helped in keeping our trade secret and encouraged product developments as well. :KDW W\SH RI RIÀFH GR \RX KDYH" We now have two companies in China. One is WOFE trading and the other is manufacturing.
Sudhir Wadhawa, director, Skyblue International 6KDQJKDL &R /WG ÂżQGV VHWWLQJ XS RIÂżFH LQ (DVW &KLQD HDV\ +H VD\V WKDW WKRXJK WKH ODQJXDJH LV D URDGEORFN RQH UHFHLYHV RI ZKDW RQH JLYHV LQ WHUPV RI DWWLWXGH Âľ&KLQD LV QRW UXQ OLNH WKH UHVW RI WKH ZRUOG 7KDW GRHVQ W PDNH LW JRRG RU EDGÂś KH RSLQHV ,Q DQ LQWHUYLHZ ZLWK ,&(& KH VD\V EXVLQHVV ZLWK &KLQD PHDQV EHLQJ UHDG\ IRU VXUSULVHV DYRLGLQJ ZRUNLQJ LQ ORZ PDUJLQ KLJK ULVN HQYLURQPHQW DQG NHHSLQJ SURYLVLRQV KDQG\ 5HDG RQ
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,V REWDLQLQJ EXVLQHVV OLFHQVH GLIÀFXOW" Contrary to what most people think, setting up a business in China is very easy and doesn’t require either a lot of money or time. We set up a free trade zone in Waigaoqiao in 2005. At that time, the free trade zone registration office helped us with everything and it cost a total of US$4000 approx. to make all docs, notarization etc. A formal office was required in the free zone and the rental was about 24000 RMB per year. Therefore, the initial capital required was US$ 60,000 only. You just need to find the area or city where you want to set up and then apply in that area’s company registration office. We never employed an agent but for one thing for which we did get a liaison office involved was for the environment protection certificate for our textile factory in Jiangsu. The reason was that the government wanted an independent company to give their report as we were using a new technology for textile lamination in that area. As our processing didn’t involve any pollution so it was easy for us. 6R WKHUH ZHUH QR KXUGOHV DW DOO" The only hurdle was choosing a name in Chinese that sounded good
East China calling entrepreneurs in English. Skyblue International Shanghai Co Ltd. was our final choice after atleast 10 attempts. Chinese law prohibits company names that sound same or similar in Chinese language.  $Q\ VXUSULVHV RQ WD[ IURQW" China is a surprise everyday. While some of them are pleasant ones, there are some, which shake your planning badly. Taxes for the first six monthsare not high but a new company is supposed to report taxes more frequently. It is a way of training a new company. Fortunately, for me, our accountant had an experience of 30 years in China and she steered us out of any trouble well in time. Some setbacks are normal in such a long-term business but most of them were not because of anything else except our ignorance of the law or system. However, we were always
given smaller fines and longer period to sort out issues.   &DQ \RX JLYH D EULHI ORZGRZQ RQ FRUSRUDWH WD[HV VHUYLFH FKDUJHV" Corporate taxes are about 30% of the income. Companies need to pay and report the taxes of all employees. A very generous expense allowance and nontaxable income level is provided. Though you might find small speed bumps there are no roadblocks.  :K\ GLG \RX FKRRVH ORFDWLQJ LQ (DVW &KLQD" Shanghai was the ideal choice for setting up a trading company. We got the benefit of the best financial system along with usage of international accounting methods, and trained work force. The wages were a little high but
The Indian embassy took out a note stating dos and donâ&#x20AC;&#x2122;ts of ,QGLDQ FRPSDQLHV ZRUNLQJ ZLWK &KLQD <RXU WDNH" Exaggeration and a negative approach. Where a detailed study and support system is required, the Indian embassyâ&#x20AC;&#x2122;s budget and man power constrains make them project a view of negativity. I would prefer a cell in Indian embassy with lawyers and accountant referral system. They could charge for introduction of the right people to newcomers in China. Be it for trade or investment, we have to teach new comers the ways and systems of China. Recently a lot of small traders of India are having payment problems in China. With no written contracts it's difficult to settle such issues. Indian businesses feel comfortable in verbal commitments and thus they sometimes become prey of some bad Chinese businesses. But since locals know the law and system better they have an upper hand in negotiations. Sometimes they even use illegal ways, as they know exactly what they can get away with.  ,Q \RXU RSLQLRQ ZKDW FDQ WKH ,QGLDQ DQG &KLQHVH JRYW GR WR IDFLOLWDWH D FRQGXFLYH EXVLQHVV HQYLURQPHQW EHWZHHQ WKH WZR" All invoices and contracts are required to be attested at special cells made by consulates in both the countries. It should be a paid service. This will deter frauds and tax evasions. There is a vast difference in the way business is done in India and China and so the government should act as a bridge for the two cultures and enable them to interact. Just giving out warnings to businesses of your own country doesn't help in solving the problem.Â
not so steep if you compared the efficiency of people and system in Shanghai. Besides, the public transport system is to fall in love with. Jiangsu was the ideal choice for our textile factory as we are in a cluster of processing factories. There is too much textile talent in this area. The tax system is a little rigid and you have to unlearn a few things about accounting. Here again, an experienced accountant helped us a lot.  'R \RX ZRUN ZLWK D ORFDO SDUWQHU" The textile area is completely open for foreign ownership.  'R \RX UHFRPPHQG ZRUNLQJ ZLWK D ORFDO SDUWQHU" I'm personally against partnership agreement with the intention of money making unless itâ&#x20AC;&#x2122;s a collaborative effort to develop something with very precise time frame and goals. A vague effort fails mostly for foreigners. If at all it is required, I project or order base partnership with short term accounting and no or fixed common expenses. Once the project is finished, we can split the spoils and be friends instead of turning rivals.  :LWK ZKLFK DXWKRULWLHV GR \RX LQWHUDFW WKH PD[LPXP" Income tax, Vat refund, export and import customs, labor department and environment.  +RZ KHOSIXO RU SURKLELWLYH DUH WKH UXOHV DQG SURFHGXUH IRU EXVLQHVV LQWHUHVWV" The Chinese system of law is not different from the Indian system. The only difference that I feel is that the Chinese system stresses on settlements out of court. In fact, they help in mediation. Thus, no matter what the result is, everyone goes back home with what he himself had agreed to during the negotiations. Â&#x2030;
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