India-china July 2012 pgs corrected by India China Chronicle

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Vol 1, Issue 3, July 2012

Round Table Discussion

On “Management Studies & Areas of Possible Cooperation between India & China” September 22, 2012 Chengdu City, Sichuan Province, P. R. China OBJECTIVE: China and India are sustaining a fairly remarkable growth rate in development. Experts believe these two countries have the potential to play a leadership role in the economic and development issues not only in the Asian region but globally. Given China’s dominant position in the manufacturing sector and India’s in the information technology sector, there are significant opportunities for collaboration between the two countries. We believe education is one such area where China and India can and must collaborate to nurture talent and build human resources in their respective countries. Any initiative in this regard would be beneficial for the growth of both nations. With this perspective, the India China Economic and Cultural Council (ICEC) is organizing a round table discussion on “Management Studies & Areas of Possible Cooperation between India & China” during the 2012 Education Forum for Asia Annual Conference, which will be held from September 21-23, 2012 in Chengdu city of China. This conference is being hosted by Boao Forum for Asia, UNESCO and the Government of Sichuan Province. The roundtable discussion will be attended by policy makers from the field of education, academicians, representatives of educational institutions and business leaders from both China and India. The event will be a great platform to brainstorm and discuss necessary policy actions required to foster educational collaborations between the two countries, especially in management studies, including liberal studies. It will also provide an excellent opportunity for the Indian management institutes to connect and share knowledge with their counterparts in other Asian countries as well as seek opportunities for long term educational collaboration.

UNIQUE OPPORTUNITY

5 REASONS TO NOT MISS EDUCATION FORUM FOR ASIA 2012 • EXCLUSIVE participation in roundtable discussion on “Management Studies and Opportunities for Collaboration between India and China in Education Sector” • NETWORKING with top universities, academicians and policy makers from China and other Asian countries • LEARNING opportunity by attending various thought provoking concurrent sessions and talks on several aspects of education sector • CHINA EXPOSURE through networking, learning and local travel, cultural events and face-to-face interactions with the Chinese • GREAT 3-IN-1 DEAL which includes local hospitality, conference registration fees and annual benefits of ICEC membership

PARTICIPATION FEE:

FREE – For ICEC Member Institutions USD 500 – For NON-ICEC Member Institutions (Participation fee will cover Registration Charges, Accommodation (3 Nights), Chinese Meals, Local Transportation, Sightseeing etc.) *All delegates have to bear the cost of international air travel and visa If you are interested to be part of this event as a participant, speaker or networker, please contact: Mr. Irfan Alam (Member Secretary) India China Economic and Cultural Council Telefax: +91-11-46550348 Email: irfan@icec-council.org info@icec-council.org

Mr. Jagat Shah (Chairman – Gujarat Chapter) India China Economic and Cultural Council Tel : +91-79-40324827, 40324928 Fax: +91-79-40321620 Email: icecahmd@icec-council.org icecahmd@hotmail.com

Mr. Dushyanth Damodaran Associate Director – Beijing Office Tel: 0086-10-52866697, 57038585 Email: dushyanth.damodaran@icec-council.org

Editor-in-ChiEf Mohammed Saqib Editor Prashun Bhaumik Editorial Board Abid Hussain Mani Shankar Aiyar P.S. Deodhar Dilip Cherian Amir Ullah Khan Parama Sinha Palit Chen Si (China) Editorial tEam Anchit Goel Irfan Alam Manju Hara Sumelika Bhattacharyya Shawahiq Siddiqui 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 K-19 (GF), South Extension - II, New Delhi - 110049 Telefax: 011-46550348 PrintEd at Anne Print Solutions B-32, Okhla Industrial Area, Phase-I, New Delhi-110020 Tel. 011-40525878, 011-65690940 Email: info@anneprintsolutions.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 the magazine.

Dragon Ascendant Either space voyages don’t make news anymore or is it that China is not able to catch the necessary eyeballs. China may be still far from catching up with the US and Russia, but Shenzou IX in June this year marked the country’s fourth manned space mission since 2003. It also carried the first Chinese woman Liu Yang into space along with two other astronauts. They spent 13 historic days in space which made their country only the third nation ever to dock a manned spacecraft to another craft in orbit. Yet there seemed to be little song and dance about the achievement at a time when the US has held back its manned space launches even retiring its space shuttles. In fact these days the US depends on Russia to fly its astronauts. No wonder the silence. Two days after the Shenzou touchdown, a Russian Soyuz landed on the Kazakh Steppes with one Russian, one American and one European on board. Another quiet story from China is its multibillion-dollar success story which began when a former soldier founded a company in the 1980s to sell imported phone switches. As sales rose, Huawei Technologies Co. invested to develop its own products, a radical step for a private company in the first decade of China’s reforms to open its economy. But it paid off. Today, Huawei has grown into a major equipment supplier to phone carriers across Asia, Europe and Africa, with $28 billion in sales last year and 110,000 employees. Strangely the public has barely heard of this giant and yet it is ready to become a consumer and business brand, moving into markets dominated by Apple Inc. and Cisco Systems Inc. It is marketing its own mobile phones and tablet computer and is expanding in the United States, backed by a global network of 20 research and development labs. Huawei is a leader of an emerging group of Chinese companies that are creating brand-name technology in fields from telecoms to clean energy to medical equipment and starting to compete with Western industry leaders. Chinese companies are climbing the technology ladder faster than Japan and South Korea did in past decades. In 10 to 15 years, China could be where South Korea is now, as far as having a number of global champions. Rising Chinese competition could hamper hopes by the United States and other Western governments to spur growth and create jobs by boosting high-tech exports. Beijing urgently wants to nurture more such innovators to reduce reliance on foreign technology and create higher-paying jobs. It has promised grants, tax breaks and other support to promote “strategic industries,” including clean energy, environmental and information technology, biotech and high-end manufacturing. But business groups complain that Beijing’s efforts to nurture local suppliers by favoring them, violates the spirit of its free-trade commitments. While advanced industrial countries are still struggling with the structural consequences of China’s entry into the world market, the country has embarked on a far more ambitious trajectory aiming for technological leadership. The rapid development sends a clear signal that China is striving to be more than the world’s biggest socks and buttons producer. China, where gun powder, the compas and paper were invented, is steadily moving up the production chain, claiming a growing market share of global high valueadded products and preparing to reclaim its past technological supremacy.

CONTENTS

right-foCusiNg the skill poliCy iN iNdia

Feedback

New ChiNa fiNds feet iN Brave New world

In concert with India to give Asia new voice

ChiNa lights up with led

to begin than Chengdu in China’s sensual Sichuan province in the south; then onto Guilin and ending in paradise Yangshuo.

Battle of the Bulge

The urgency of focusing the skill policy is that it needs to be realized and implemented before the demographic dividend turns into a youth bulge.

remove NoN-tariff Barriers

India still a flicker in the dark

Open up Nathu La again

Even though India-China trade is on the upswing, many measures need to be taken to balance both sides.

In the next 10 years one might see LED prices as low as or cheaper than conventional light sources. revolutioN iN eNterprise solutioNs

China is an engine and has grown into the region’s new giant. It now uses win-win rhetoric to calm the fears of its East Asian neighbours, promoting cooperation as the new buzz word.

24 |2| India-China Chronicle  July 2012

the CivilizatioNal dialogue

The use of customized software is the next big step in the world of computing.

Cover story

China’s tech-tonic shift

Silver bullet in the Cloud

More exchanges needed to promote trade with China

The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) President JR Bangera speaks to ICC on a host of issues relating to trade with China. iNdia, ChiNa oNliNe

Spreading the Web

Both India and China are on the threshold of a Web revolution.

Let’s retrace our footsteps

Civilizational cross cultural currents between India and China went unhindered for two millennia. What went wrong and why we need to revive it.

Mind over matter ICEC’s China India Healthcare Conference and China India Yoga Summit in Guangzhou

Chengdu calling

The Indian government may be following an aggressive Look East Policy but what the people of India need to do is indulge in a visit east policy and there can be no place better

Exhibitions & Trade show

In India & In China missiNg pieCes

Lessons to learn

iNdia must ready for the leap

Tiger, tiger burning bright

India’s economic journey over the last 20 years has seen it metamorphose from an ambling elephant into a hungry tiger: Today India’s GDP is the third largest in the world, with a total GDP of 2 trillion dollars. July 2012  India-China Chronicle |3|

f e e d b a c k and to embark on the path of steady growth and sustainable development. Of late, bilateral relations between the two countries have experienced a new height exemplified by deepening political and economic engagement of leadership of the two countries and initiation of an economic dialogue. However, there are some persistent political gaps between the two countries which are creating roadblocks. The author plausibly suggested a road map in the form of food for thought to overcome those gaps therefore making the article a must read for academicians, policy makers, political leaders as well as Chindia focused scholars. Last but not the least; I would like to thank the editorial team of the magazine for identifying Mr Zhang Yan who has shared his useful views which can be used as policy inputs. Aditya Dhumma, Mumbai Food for Thought The article titled ‘No forces in the World can Stop China, India from rising together,’ authored by Zhang Yan which appeared in the India-China Chronicle, April 2012 issue, provides a very comprehensive account of India-China relations and the issues involved. The observation drawn in the article that ‘no force in the world can stop China, India from rising together may sound prophetic to others but it is a well taken fact among scholars of South and South East Asia. There are several reasons to substantiate the fact like the two countries have been experiencing double digit GDP growth from more than two decades; the two countries have attracted a major chunk of global FDI flows, the economies of two countries have perceived complementarities vis-à-vis western capital abundant economies. More so, the two countries have huge domestic demand and visible slack for rapid industrial expansion. Furthermore, the increasing presence of the two countries in various international and multilateral forums has already been felt by hegemonic powers across the globe. India, China poses all the necessary features which require them to become important players |4| India-China Chronicle  July 2012

Wings of a Bird The last issue of India-China Chronicle carried an article titled ‘Linked like two wings of a bird’ which provided a strategic update of India-China relations. In fact, the growing interest of the two Asian giants in each others’ economy and increasing multi-level political cooperation in the backdrop of the changing geopolitics in the Southeast Asian region can be deciphered through their trade statistics and cooperation at multilateral forums. However, there are unresolved territorial issues between the two countries but such issue can be resolved in the long run on a mutually agreed scaffold. The key to peaceful coexistence for the two countries lies in their strategic and cooperative relationship based on mutual respect of sovereignty, territorial integrity and cooperation. The article is informative in nature and provided a snapshot of unresolved issues and means to resolve those issues. The write up will be useful to scholars and observers interested in India-China strategic relations. Ranjana Das, New Delhi Doing Business With reference to the article on “Doing business in China – the first

step” by Anchit Goel in the last issue of the India-China Chronicle gives an insight of how to enter into China for doing business. Talking about various ways of entering the Chinese market and proceeding with business in China. In this abstract, one can find a lot of relevant information about progressing towards China, unlocking many business opportunities. From the information point of view, this piece provides useful information for a giant leap in business. Madhura Patankar, Mumbai Cash Cow I recently came across an article in the India-China Chronicle on technology merged with creativity in the advertisement world. How creativity with advanced technology has added advantage in advertisement, from television to mobile platform. It seems pretty interesting how creativity has overridden the traditional ways of advertisement, and taking advantage from this many firms have come into existence leaving behind the traditional ways bringing tough competition into this sector. The change in the advertisement world is about orientation in branding and bringing it on the mobile platform. Added to this, there is a product perception of consumers on “Made in China products”, which clearly demarks the major distinction in product categorization. From the business point of view, it seems “The Chinese market is not a cash cow.” Supriya Pathak, New Delhi Changing China The article titled Doing business in China–the first step is a good guide for the requirements of setting up business in China. Yes, it is true that China is not the easiest place to do business but since China adopted its open door policy (1979) which marked China’s economic opening up to rest of the world, lots of changes have taken place. Despite its changing business milieu China still remains a promising place for doing business for many global direct investors. In the article, the author plausibly provided a snapshot of the requirements for doing business in China; the article could have been more informative and given more details. Sangita Bansal, New Delhi

INFOCUS | INDIA-CHINA | CIVIL SOCIETY

New ChiNa fiNds feet iN Brave New world

In concert with India to give Asia new voice

You Jianhua

he year 2011 was observed as the year of China-India Exchanges. Exchanges are indeed important for our two nations who need to better understand each other and to build greater trust. In this regard civil societies can play a big role. Working together, we can build a bridge between China and India to bring the two peoples and the two states closer toward each other. First, how should we understand China? Since the founding of New China in 1949, especially in the past 30 years after the country adopted the reform and opening up policy, under the leadership of the Communist Party of China (CPC), the Chinese people have embarked onto a unique path of development that conforms with China’s realities, scoring remarkable achievements in all courses with sustained and rapid economic development and with people’s livelihood uplifted from bare subsistence to a well-off level. In recent years, with the aim of realizing peopleoriented, comprehensive, co-ordinated and sustainable development, China has endeavored to transform the mode of economic development while main-

there have been some twists and turns between us, but just as Chinese Premier wen Put it, China and india have been friends for 99.9% of the time over the last 2000 years. that’s the best summary of sinoindian relations

Jawaharlal Nehru with former Chinese Premier Zhou enlai (l) in China

Chinese Premier wen Jiabao visited india in 2005

indian Prime Minister Manmohan singh with Chinese President hu Jintao |6| India-China Chronicle  July 2012

July 2012  India-China Chronicle |7|

INFOCUS | INDIA-CHINA | CIVIL SOCIETY

taining steady and rapid growth. Efforts have been made to create more jobs, deepen the redistribution reform and to build a safety net that covers both urban and rural residents. Great attention has been paid to energy and resource conservation and environment protection with a view to enhancing development sustainability. Indigenous innovation was encouraged and stressed as critical impetus to drive the nation forward. Meanwhile, China also worked to strengthen the role of agriculture as development foundation of the economy, ensure food security, tackle devastating natural disasters and public health emergencies, and to secure the safety of lives and property of the people in the course of development. We pursue a scientific way of development which aims at achieving expansion of production, affluence of life and a favourable eco-system through a holistic, open and win-win approach, by adapting ourselves to the changing world situation with the increased momentum of economic globalization.

own development. We will continue to implement the policy of “building friendship and partnership with our neighbouring countries” and enhance cooperation with our neighbouring countries, including India, to create peace and prosperity together.

“

I do not know why but as soon as I alighted on the land of China, I felt that I have come home. I have come to China not to observe the sceneries as a tourist, nor to bring some gospel as a missionary, but to seek the way as a pilgrim and pay homage to China’s cultural community. I have come to China for some invisible emotion: to be general, my mission is to repair the bridge between China and India which was broken more than a thousand years ago

|8| India-China Chronicle  July 2012

“

Given the large population, weak economic foundation, imbalanced development level between rural and urban areas and between regions, intensifying constraints from resources and environment, growing employment pressure and daunting task of poverty elimination, China is still a developing country, and we have a long way to go to realize modernization and to achieve common prosperity of the entire population of 1.3 billion. A blueprint has been drawn for social and economic development in the next

five years, according to which, China will be committed to scientific development, focus on accelerated transformation of economic development mode, deepen reform and opening up, secure and improve people’s well-being in order to promote sustained, steady and fast economic growth and social harmony and stability. China is willing to learn from others’ strong points and cooperate with other countries as equals for common development. China will continue to follow the opening-up strategy of mutual benefit,

rabindranath tagore in China

and follow a good-neighbourly policy towards countries in the region. China will also be active in international and regional cooperation and make efforts with other countries to create an international environment of peace and stability, equality and mutual trust, winwin cooperation, thus making active contribution to a harmonious world of enduring peace and common prosperity. China’s achievements have been possible due to our choice of the peaceful development road. In order to achieve better development in the future, we need to firmly adhere to this road. China’s development will not harm or threaten anyone. We will, as ever, be committed to safeguarding world peace and seeking peaceful international environment to develop ourselves, and at the same time, better promote world peace by means of our

Second, how should we view China-India relations? The friendship between China and India has a long history. Buddhism was introduced to China as early as in the Han dynasty. In the Jin and Tang dynasties, Fa Hsien and Xuanzang went on a pilgrimage to India respectively for Buddhist scriptures, which became a much told story spreading up to now. Thus Buddhism became an important part of the Chinese civilization. In modern times, China and India sympathized with and supported each other in the fight for independence and liberation. The Indian National Congress Party sent medical teams to assist the Chinese people in the War of Resistance against Japan and Doctor Dwarkanath S Kotnis even rendered his life for China’s cause of liberation, which we will never forget. China and India established diplomatic relations in 1950. India was the first non-socialist country to start diplomatic ties with China. In 1954, then Premier

Zhou Enlai visited India, and then Prime Minister Jawaharlal Nehru visited China. The two leaders jointly advocated the five principles of peaceful coexistence (Panchsheel) that remain important in dealing with international relations. An upsurge of friendly cooperation between China and India was forged in those years. “Hindi-Chini Bhai Bhai” became a popular saying in both countries. As the late master of Sinology and Indology Ji Xianlin put it, China and India are made for each

China has reCeived more visitors from india than india has from China. we should visit eaCh other more often beCause faCe-to-faCe interaCtion is the best way to enhanCe mutual understanding

other as neighbours. Since the beginning of the new century, Sino-Indian political relations have also achieved laudable progress. Chinese Premier Wen Jiabao visited India in 2005, during which the two countries established a strategic cooperative partnership. When Chinese President Hu Jintao visited India in 2006, the two sides formulated the Ten Strategies for Sino-Indian Common Development. In 2008, Indian Prime Minister Manmohan Singh visited China, and the two sides reached a document entitled “A Shared Vision for the 21st Century of the People’s Republic of China and the Republic of India”, bringing Sino-Indian relations to a new level. April 1, 2010 marked the 60th anniversary of China-India diplomatic relations. In the past six decades our relations have scored significant development. The two states have established strategic cooperative partnership and have carried out practical cooperation in various fields. The two countries have also kept close coordination and cooperation on international and regional issues. At present, Sino-Indian relations have become one of the most important bilateral relations in the world

July 2012  India-China Chronicle |9|

INFOCUS | INDIA-CHINA | CIVIL SOCIETY

and are bearing increasingly global and strategic significance. Sure there have been some twists and turns between us, but just as Chinese Premier Wen put it, China and India have been friends for 99.9% of the time over the last 2000 years. That’s the best summary of SinoIndian relations. In 2010, Indian Foreign Minister SM Krishna was invited to deliver a speech with the theme “China, India and the World in the 21st Century” during his official visit to China. Minister Krishna, a 78-year-old veteran of the Indian National Congress, was awarded one of the most outstanding

younger generation may not be familiar with that part of the history, so it’s necessary for us to remind them for a stronger cooperation spirit. Minister Krishna also said China and India are both developing countries, being confronted with common challenges such as urbanization, resource consumption, as well as food and energy security for all-round development and technological progress. The two countries’ economic modes are different, but sharing experience on economic issues is beneficial for our common development. He deemed that currently, the two countries’ cooperation in this

Xuan Zang Memorial hall in Nalanda

chief ministers in recent years by the Indian media. He said, after winning their national independence respectively in the late 1940s, the two nations enjoyed their decade-long honeymoon throughout the 1950s. India was one of the 19 countries that recognized New China at that time, and actively supported China’s restoration of UN membership. The two states firmly stood on the same side in the Indochina Wars, the Suez Canal Crisis, the Taiwan Strait Crisis and the Korean War. He said passionately that the |10| India-China Chronicle  July 2012

field is insufficient. In the future, India can absorb China’s advanced experience and technology in infrastructure construction, while China can cooperate more with India’s IT industry. Krishna expressed that common development of the two countries is not only beneficial for us, but also for the whole world. We should remember we are neighbouring countries. Stability and prosperity of each of us also serves the interests of the other. Meanwhile, both countries are so populous that our development

has improved the living standard of 1/3 of the world population, thus increasing global per capita income, life expectancy and Human Development Index over the past 20 years. When you ask what China and India can do to the world, please remember that the realization of development in these two countries alone is of great global effect. He also said we have to admit that there are some disputes between us but we needn’t be frustrated because this is what happens in international politics. Our ability to deal with these issues is a test to the maturity of our relationship. If China and India can cooperate in more and more fields, the whole world will benefit from it. Stable and positive Sino-Indian relations must be based on both political mutual trust and common economic interests. Reviewing the past, we could see that our relations have not been all smooth sailing. There were sunny days as well as cloudy seasons, or even stormy moments. In the process of the economic globalization and the world multi-polarization, China and India, the two big developing countries, represent the emerging forces that are catching world attention. Cooperation between the two countries not only serves the interests of the two peoples, but also contributes to peace and prosperity of Asia and even of the world. Both as major developing countries, China and India are confronted with the common tasks of developing their economies and improving the people’s livelihood. Both shoulder the responsibility of safeguarding regional peace and stability and realizing development and prosperity in Asia. The two countries share extensive common interests in promoting world multi-polarization and democratization of international relations. Developing friendly relations with India is a consistent policy of the CPC and the Chinese government. We sincerely welcome a peaceful and prosperous India. As developing countries, we both need development. We are happy to see India’s rise and I think the Indian people would also be happy to see China develop. We should develop together, so that our people will enjoy a better life. Since the 1990s, there have been

more gratifying signs in bilateral relations such as growing exchanges of high level visits and strengthened cooperation in all fields, business and trade in particular. There will be better development in various fields in the future because both countries have great room for growth in such areas as economy, science and technology, culture, including media. Minor issues, if there are any, can be well solved through discussion and consultation. What the two sides need urgently to do is to build up mutual trust, especially political trust, by increasing communication and enhancing understanding. The two countries share plenty of common interests, so it should not be difficult for us to work together. In fact, we can do much better. What we need is cooperation rather than competition. Through cooperation we can learn from each other’s strong points and share experience for common development. There are indeed some issues that both sides find rather knotty. But I hope these issues won’t become barriers. The two sides need to enhance communication and mutual understanding so as to solve these issues as soon as possible. China and India have their own priorities at home, and it would be best for the two to acknowledge each other’s strong points, advantages and goodwill, and improve mutual trust through communication. For example, India has good agricultural experience, enabling it to feed its vast population. India’s world-renowned software industry is also worth learning. Both countries have strong and weak points. Therefore, we can share experience and learn from each other. The two countries should make joint efforts for this purpose, not keeping a wary eye on each other or being affected by third-party instigation. China is keen to develop friendship and strengthen cooperation with India, which we hope could be truly appreciated by the Indian people. Cultural exchanges have been the mainstay in the 2000 years of interaction between the two countries. It is through mutual exchanges and learning that the two peoples have developed and enriched their respective civilizations. The Ganges Civilization

of India made creative contribution in literature, philosophy and natural science. The immortal epics of Mahabharata and Ramayana, the sophisticated philosophical and logical theory of Hetuvidya, the decimal numeration based on ten numeric symbols including “0” used worldwide, Buddhism, which was born in India in the 6th century BC, and later introduced to China, Korea and Japan, and the great works of Rabindranath Tagore, all had strong impact on and left footprints in the development of the Chinese civilization. Similarly, China’s paper-making techniques as well as silk, ceramics,

are few such cases in the world where two large neighbouring countries enjoy such a long history of interaction and strong mutual impact but seldom come into conflicts or wars. However, in modern history, due to various reasons, especially the invasion of India and China by imperialist powers in the 19th century, relations between the two countries hit rock bottom. During the Second World War, both China and India, as part of the Allies, made huge sacrifice and great contribution to the final victory against Fascist invaders. The two governments both pay great attention to the role of culture.

indian style Buddhist temple in the west side of the white horse temple in luoyang

tea and music were also introduced to India, adding splendour to Indian culture. The Chinese Twenty Four Dynastic Histories and the travelogues of holy monks are also good sources of reference for the study of Indian ancient history. Thanks to sages like Bodhidharma and Xuanzang, exchanges between the two peoples were able to continue uninterrupted for over a thousand years. These are chronicled in great details in the History of SinoIndian Cultural Exchanges by the famous Chinese scholar Ji Xianlin. There

Our cultural exchanges and cooperation are very close, reaching another peak after the Tang Dynasty and becoming an important foundation underpinning our bilateral relations. Even at the time when the two countries were at odds, Ji Xianlin, together with his students, stayed on his project and accomplished the translation of Mahabharata and Ramayana into Chinese. The 1980s saw the rapid recovery of relations between the two countries. In 1988, Indian Prime Minister Rajiv Gandhi visited China, during which July 2012  India-China Chronicle |11|

INFOCUS | INDIA-CHINA | CIVIL SOCIETY

the two countries signed the Sino-Indian Cultural Cooperation Agreement. In 2003, during the visit of then Prime Minister Vajpayee to China, the two sides signed the cultural agreement -Implementation Plan for 2003-2005. In November 2006, the two sides issued a Joint Declaration, by which cultural exchanges are highlighted as one of the “Ten Strategies” to deepen Sino-India strategic cooperative partnership. In January 2008, the two sides signed “A Shared Vision for the 21st Century”, bringing Sino-Indian relations to a higher level. In 2009, a Confucius Institute was set up in India, and the Indian Culture Centre was opened in China, both giving new impetus to cultural exchanges. In recent years, economic and trade cooperation has been a highlight of the two countries’ relations. Trade volume between China and India grew from US $2.9 billion in 2000 to US $51.78 billion in 2008, with an average annual growth of 43%. In 2009, trade between the two countries was somewhat affected by the financial crisis, but it still remained at a high level, reaching US $44.38 billion. In 2010, with concerted efforts by the two sides, trade volume reached the pre-set objective of 60 billion US dollars. China is now India’s largest trading partner; India comes first among China’s trading partners in South Asia, and 10th in the world. Besides, mutual investment has seen a steady increase. India’s accumulative direct investment in China has surpassed US $300 million, and China’s investment in India has reached US $250 million. At present, there are over 100 Indian companies operating in China, and over 60 Chinese companies are conducting R&D and contracting business in India. With a joint population of 2.5 billion, China and India represent a huge potential market and are quite complementary in economic terms. Closer economic and business cooperation serves the interests of the two countries and has brought tangible benefits to its peoples. In December 2010 during his visit to India, Premier Wen Jiabao reached an agreement with Prime Minister Manmohan Singh to establish a Sino-Indian Strategic and Economic |12| India-China Chronicle  July 2012

Dialogue Mechanism, and set a new target of increasing bilateral trade to 100 billion US dollars by 2015, stressing that the two countries should complement each other in various fields. It is worth mentioning that China appreciates India’s concern over its enlarging trade deficit and its raw material-based export structure, and has shown good gesture by encouraging Indian businesses to explore the Chinese domestic market. As developing countries, both China and India hold similar or even identical positions on many major international issues. The two countries enjoyed good collaboration in the Doha

what the two sides need urgently to do is to build uP mutual trust, esPeCially PolitiCal trust, by inCreasing CommuniCation and enhanCing understanding. the two Countries share Plenty of Common interests, so it should not be diffiCult for us to work together. Round negotiations, and on such matters as climate change, energy and food security and international financial crisis, jointly safeguarding the interests of the developing world. China and India have also played active roles in the more recent multilateral mechanisms, such as China-Russia-India trilateral cooperation, BRIC (China, Russia, India and Brazil), BASIC (Brazil, South Africa, India and China) and the Developing-Five (China, India, Brazil, South Africa, and Mexico). China and India will undoubtedly be important forces in the future political landscape

of Asia, and will play a more active role in regional affairs. I believe that Sino-Indian relations are more than a bilateral framework, that of global and strategic significance. As two emerging powers, China and India have seen their international standing elevated and influence increased in recent years. With intensified cooperation, the two countries have played a constructive role in many international affairs and have gained more attention from the world. For instance, China and India have taken the lead in tiding over the international financial crisis by taking proactive counter measures, contributing greatly to world economic recovery. Meanwhile, the two countries strengthened communication and coordination in the G20 Summits in London and Pittsburgh, ensuring that positive results were achieved. Compared to the sound development of our political relations, peopleto-people exchanges between the two countries are apparently not sufficient. With a total population of 2.5 billion between the two countries, the number of mutual visits in 2010 was only 530,000 person-times, far lower than the 6 million between China and RoK. Lack of interaction has directly caused estrangement and misunderstanding between the two peoples. While political mutual trust is essential, amity among the peoples is just as important for a healthy bilateral relationship. China has received more visitors from India than India has from China. We should visit each other more often because face-to-face interaction is the best way to enhance mutual understanding. Like in inter-personal relationship, the better we know about each other, the better we feel about each other, and there will be fewer disputes and misunderstanding but more business links. When you feel good about someone, you are more willing to buy his products. Similarly, if you understand a people very well, you are more likely to invest in their country, or invite them to invest in yours. What we need to do is to bring Chinese and Indian civil societies together so that people can meet and get to know each other. I attended a reception for a

500-person youth delegation from India in September 2011 and was deeply impressed. That was one of the major events in the “Year of Sino-India Exchanges” programme, which set a record in the two countries’ youth exchanges in terms of the number of people involved in one single visit. Mutual visits by young people will sow the seeds of friendship for our future relations. Third, things to be clarified In recent years, China-India relations have generally enjoyed sound development. However, like any other bilateral relations, it is inevitable to have some friction or disputes from time to time. At present, the deep-seated problems in the bilateral relations lie in the lack of necessary understanding and trust between the two countries and the two peoples despite the fact that we share the same border. This has restricted the development of bilateral relations. Secondly, there are still some pending historical issues between us that remain to be solved, such as the border issue. We must first and foremost make joint efforts and try all possible means to enhance trust and mu-

tual understanding, thus creating an amicable atmosphere for the advancement of bilateral relations and a favourable condition for the settlement of historical and current issues. We need to better understand each other from political, historical and cultural dimensions, and also from regional and international perspectives. 1. Political mutual trust and economic mutual benefit are two indispensable wheels to carry China-India relations forward. On the one hand, we need to strengthen political mutual trust. Strategically, both the Chinese and the Indian governments attach great importance to their bilateral ties, and set this relationship as one of their diplomatic priorities, which provides paramount guarantee for plans to get carried out. Over the past few years, the two countries have been seen as the most dynamic emerging economies in the world. We are also key members of BRICS, calling out loud for the transformation of the international systems and for the protection of the interests of developing nations. With the in-

ternational financial crisis, the heated climate change issues, and the standoff at the Doha round negotiations, the two emerging powers are showing increasingly greater strength. Both Premier Wen Jiabao and Prime Minister Manmohan Singh put China-India relationship high on their diplomatic agenda, seeking stable, positive and pragmatic bilateral cooperation. They stressed more than once that there is plenty of room in Asia and the world for China and India to develop together and that it takes greater efforts to build a relationship than to ruin it. These are clear messages about the political will to promote friendship and stabilize their relations. China and India should be cooperative partners, rather than competitive rivals. Only the common development of the two countries can bring real development to the whole region and the world. Our population together, which accounts for 40% of the world total, means enormous development room and market potential. The media should look more into the broad prospects of Sino-Indian cooperation. However, despite the consensus reached by our leaders that China and India do not constitute a threat to each other, frankly speaking, the China Threat Theory still sells in India. Even some China-friendly people are worried about a potential conflict between the two nations in the future. To ease that, the civil societies of the two countries should enhance exchanges and mitigate the gap of understanding. NGOs play a very important role and shoulder unshakable responsibilities in promoting friendship and mutual trust between the two peoples. Each of our organizations should do more in this regard and serve as a window, a bridge, or a bond through which the two peoples will know each other better. On the other hand, we need to expand mutually beneficial economic cooperation. As big emerging developing economies, China and India, which have successively embarked on the road of reform and opening up, have similar national conditions, and are in basically the same stage of development. The two countries face common tasks of developing economy, eliminating poverty July 2012  India-China Chronicle |13|

INFOCUS | INDIA-CHINA | CIVIL SOCIETY

and raising people’s living standard. In the context of economic globalization, we face common or similar opportunities and challenges. With strong economic complementarities, there is a huge potential to be tapped in our economic and trade cooperation, which require more consideration and effort from the two sides. 2. China’s peaceful development poses no threat to India China released the Whitepaper on China’s Peaceful Development in September, 2011, once again, solemnly announcing to the whole world that peaceful development is a strategic choice it has made to realize modernization, rejuvenate the nation, enrich the people and make greater contribution to the progress of world civilization. China will stick to this road unswervingly. Our peaceful rise is a breach from the classic pattern that a rising power is bound to seek hegemony. Decades of practice has proven that China has chosen the right path and has no reason to steer away from it. We are committed to peaceful development and do not believe that hegemony is the only destination of a rising power. China cares more about the environment it is rising from and concerns itself with the challenges facing the whole world. We believe that hegemony or bullying or use of force can only make things worse. They may help to settle one problem or another, but will meanwhile produce more grievances and risks. It is for sure that China will encounter many difficulties on its way to development, but difficulties must be resolved through peaceful dialogue and diplomatic approach. Global issues, be it climate change, or trade negotiations, or UN reform, as well as territorial disputes, cannot be settled simply by showing the fist or talking rough, nor by the use of brutal force. It is these beliefs that will guide China in dealing with other countries over disputes. China is willing to work with the Indian side to strengthen mutual trust, promote cooperation, and contribute to peace and stability in the region and the world at large. China |14| India-China Chronicle  July 2012

does not jeopardize other countries, and has the ability to safeguard its own security and development. China and India are close neighbours linked by the same mountains and rivers. A sound partnership serves the interests of both sides. Although there are still problems about security concepts of the two countries, China and India, as two emerging powers, from a strategic height and the fundamental interests of both peoples, must properly handle the pressure and challenges in military security, abandon the stereotype thinking of the past and look far into the same direction. In the field of mili-

deng Xiaoping

tary security, we should try to enhance trust, strengthen cooperation, reduce friction and avoid conflict. On the national emblem of India there is a motto in Sanskrit: “Satyameva Jayate” (Truth Alone Triumphs). When talking about Sino-Indian relations, Premier Wen Jiabao once quoted from the Upanishads to express the strong desires of China to realize good neighbourly relations with India: “Om. May Brahman protect us both! May Brahman bestow upon us both the fruit of Knowledge! May we both obtain the energy to acquire Knowledge! May what we both study reveal the Truth! May we cherish no ill feeling toward each other! Om. Peace! Peace! Peace!”

3. There is no clash of civilizations between China and India China and India are among the world’s four ancient civilizations. Throughout 2,000 years of exchanges between the two countries, the two great civilizations have always been influencing each other and drawing on each other’s strengths. Such benign interactions have continued up to this day. With the attention from leaders of both countries, the years 2006 and 2007 were designated respectively as the China-India Friendship Year and the China-India Tourism Friendship Year, with ever expanding cooperation in culture, art and education and exchanges among the youth. In 2011, the India Festival and China Festival were organized respectively in China and India, highlighted by a series of brilliant art performances, exhibitions and film weeks, with a view to promoting mutual understanding and bringing the peoples closer together. Buddhism originated from India and flourished in China. The essence of Buddhism has penetrated the blood of the Chinese nation and become an important element of its culture, exerting profound influence on Chinese ancient philosophy, art, literature, architecture, and folk customs. It is fair to say that Buddhism has played an important role in exchanges between the two great civilizations. There is a “Xuan Zang Memorial Hall” in Nalanda, a famous Buddhist shrine in India, which is a Chinese-style Buddhist architecture built by China, and has undergone renovation in 2007. A few years ago India built an Indian style Buddhist Temple in the west side of the White Horse Temple in Luoyang, in China’s Henan Province. The two buildings have become testimony to the two countries’ cultural exchanges. The Buddhist communities of the two countries have also exchanged many visits in recent years. The year 2011 marks the 150th anniversary of the birth of Rabindranath Tagore (1861–1941), the famous Indian writer, artist, philosopher and social activist. In 1913 Tagore won the Nobel

Prize in Literature as the first laureate from the Oriental for his anthology of poems – Gitanjali. During those days under Britain’s colonial rule, he was the pride of India, and a hero in the Oriental world that was suffering from humiliation by western powers. Tagore is a big name in China. During China’s New Culture Movement, he and many of his works were introduced to China, influencing generations of Chinese readers. Tagore had always been very friendly with the Chinese people. In 1881, a young 20-year-old Tagore harshly condemned British imperialists for dumping opium on China and forcing the Qing government to cede territory and pay indemnities. In his famous article China Maraner Elyabasay (The Death Trade in China) in the Bengali Magazine Bharati, he wrote: “Britain sits on the chest of the biggest Asian civilization, dripping poison into her healthy body and soul, driving her to death. One makes a killing while the other suffers tremendous loses. Such cruel robbery is indeed unprecedented.” Tagore made a speech in Japan in 1916, condemning the malefaction of Japan’s invasion of China’s Shandong Province. After China’s War of Resistance against Japan broke out, Tagore published letters and speeches several times to condemn Japan’s atrocity. He also took the lead in raising funds to support China in the war at his best. He once said with all emotion, “I believe I was a Chinese in my previous life!” In the International University of India, where Tagore served as the President, he established a China Institute for Chinese students. At the invitation of two great Chinese scholars, Liang Qichao and Cai Yuanpei, Tagore paid his first visit to China on March 21, 1924. While setting foot on China, he couldn’t help but say, “I do not know why but as soon as I alighted on the land of China, I felt that I have come home.” He added, “But I may put it this way, India feels that it bears an extremely close alliance with China. China and India are both very old and beloved brothers.” He also said, “I have come to China not to observe the sceneries as a tourist, nor to bring some gospel as a missionary, but to seek the way as a pilgrim and pay homage to China’s

cultural community. I have come to China for some invisible emotion: to be general, my mission is to repair the bridge between China and India which was broken more than a thousand years ago; to be more specific, I want to get sincere sympathy from you—the youth of China. Let us work together, Chinese and Indians. We shall not be afraid of difficulties for we have the hoes on our shoulders to root out misunderstanding, and we have fresh seeds in our pockets that will bear fruits of humanity. Sun or rain, let us clear the land and sow the seeds, while singing loud new songs to encourage sprouts to grow out of darkness.” His words are remembered even today.

more and more visionary indians have realized that China’s develoPment is more of a blessing than a Curse. 4. China and India will not fall into the so-called dragonelephant contention Dragon and elephant are often used to symbolize China and India. In some media reports, China and India are regarded as economic competitors, and the development of the two countries is referred to as a contest between the dragon and the elephant (The Dragon and the Elephant, by David Smith, economics editor of the Sunday Times). Some people in India believe that “China and India are rivals or competitors instead of partners in mutually beneficial cooperation.” Though it is not the mainstream opinion, its potential to mislead the public and its negative impacts on Sino-Indian relations cannot be overlooked. I would rather say that the dragon and the elephant can work together and develop side by side. China and India are the world’s two biggest developing countries with similar histories and common goal for development, and they are facing the same historical challenges and share the same or similar stands on major in-

ternational issues. Cooperation is beneficial to both countries, to Asia and the world. Both China and India must pay close attention to the development of each other. More and more Indians from different walks of life are beginning to follow China’s development and to appreciate and speak positively of China’s enormous progress in the past three decades. They also support the two countries for better cooperation for a win-win result. Of course there are a small number of people who fail to view China’s development in a just and objective way. Some of them do not know China’s reality, or have been misled by western media. But very few have a prejudice against China. But they do not represent the main stream. China pursues a peaceful way of development without jeopardizing any other country. More and more visionary Indians have realized that China’s development is more of a blessing than a curse. Actually, as early as in 1988 Deng Xiaoping made a far-sighted assertion that no genuine Asia-Pacific century or Asian century can come until China, India and other neighbouring countries are developed. Indian Prime Minister Manmohan Singh has also repeated on different occasions that, “The world is big enough for both India and China to develop” and that “The world is big enough for India and China’s ambitions.” Such strategic mainstream judgements have laid the foundation for the stable bilateral relationship between China and India. Lastly, I would like to conclude by quoting these lines from Tagore: The furthest distance in the world is not between life and death but when I stand in front of you yet you don’t know that I love you 

You Jianhua is the Secretary-General of China NGO Network for International Exchanges. This was his speech at the China-India People’s Dialogue in December, 2011

July 2012  India-China Chronicle |15|

INFOCUS | INDIA-CHINA | TECHNOLOGY

The latest range of ultra bright LEDs consume 11 per cent of the electrical power that an incandescent bulb does for same light output in Lumen. That means today’s 11W LED light will ideally give same light output in Lumen as 100W conventional filament bulb. Thus LED will reduce global power demand by 50 per cent if they replace all conventional lights used in the world. This will eliminate the need to turn to dangerous and expensive nuclear energy and enrich western multinationals like those in France or USA.

China lights up with lED

India still a flicker in the dark |16| India-China Chronicle  July 2012

In the next 10 years one might see LED prices as low as or cheaper than conventional light sources. PS Deodhar

ED or light-emitting diode turns electrical energy into luminous energy and emit visible light in various colours, such as yellow, green, blue, etc, as well as invisible light, such as infrared and ultraviolet. Compared with the small incandescent bulb and the CFL lamp, light-emitting diodes are specially characterized with low operating voltage and electric current, high reliability and long performance.

Global Industry Status While the Indian government is busy with non-issues, globally the LED industry is rapidly growing. The entry barriers of the light-emitting diode industry from the upstream to the downstream are getting cut down gradually. The upstream industry includes monocrystalline chip and the epitaxial wafer while the middle stream industry is mainly engaged in chip processing and the downstream industry handles packaging, testing and application. The upstream and middle stream industries, most competitive and risky fields on world market, have higher technical contents and require more investments. In the industrial chain of light-emitting diode, epitaxial wafer and chip account for about 70% of profits and the packaging accounts for 10 to 20 percent of profits, with 10 to 20 percent held by application field. Future of LED Under international energy crisis and the gradual improvement of the environmental protection requirements, the semi-conductor lightemitting diode lighting, with long performance, energy saving, safe, green and environmental protection, abundant colours and microminiaturization, has been recognized as the only one and the most important way of energy saving and environmental protection in the world. As said earlier, the semiconductor lights, adopting light-emitting diode as the new lighting source, only run up one tenth of the electricity compared with the ordinary white light lamps and the performance can be postponed 10 folds at the same

brightness. In 2007, the total amount of the global light-emitting diode market exceeded 6 billion USD, up by 13.7 per cent over the previous year. During 2006 to 2009, the annual compound growth rate of the global light-emitting diode market is 10 per cent, most of which will mainly be contributed by the ultra high and high brightness light-emitting diodes. This has grown significantly as prices are falling in 2011; thanks to China. LED light sources are most reliable since just a single chip converts electrical energy into light energy. If its conversion efficiency is the highest,

LED Light sourcEs arE most rELiabLE sincE just a singLE chip convErts ELEctricaL EnErgy into Light EnErgy. if its convErsion EfficiEncy is thE highEst, thE hEat Loss is smaLL anD is wELL managED to protEct thE chip. thE LifE of LED thErEforE is unLimitED anD usuaLLy cLaimED to bE 50,000 hours the heat loss is small and is well managed to protect the chip. The life of LED therefore is unlimited and usually claimed to be 50,000 hours. Against this, Compact Fluorescent Lamps or CFLs, have as many as 40 or more parts and therefore rarely meet its claimed life of 5000 hours. Cheap CFLs from China is indeed a waste of money. Global LED Industry The global light-emitting diode industry is mainly concentrated in Japan, Taiwan, Europe, America, South Korea, China, etc. Japan, the largest producer of the light-emitting diode industry in the world, holds 50 per July 2012  India-China Chronicle |17|

INFOCUS | INDIA-CHINA | TECHNOLOGY

|18| India-China Chronicle  July 2012

CHINA LED industry gallops to Rs 25000 crore in 2011 taking full advantage of government support, China's lED industry has logged over 25000 crore rupees in sale by offering a wide range of innovative products. this is 23% more than in 2010. (nYsE: ihs). they are poised to grow almost double to 46000 crores by 2015. the lED market covers lED bulbs, lED displays, traffic signals, automotive use, lCD backlighting, handset key pads, digital still camera flashlights, decorative lighting, street lighting and general illumination. a new demand driver for lEDs in the medium to the long term will be the general lighting market. given the global trend to reduce carbon emissions, China demand in the general lighting segment will be strong for lEDs, which offer lowpower consumption and are environmentally safe. Chinese however are not happy since most of lED wafers are to be imported which indeed have the largest value addition. China trails due to the lack of technological and R & D capabilities. China’s lED players enjoy ample funding from the government. it subsidizes at least 70 percent of the purchase price for metal organic chemical vapour deposition equipment employed in lED manufacturing. Furthermore, tax and utility payment benefits are offered to encourage investments in the domestic lED industry, proving to be an additional boon for local players.

China Light-Emitting Diode Revenue Forecast (Billions of US Dollars)

s12 s10 s8 s6 s4

2015

2014

2013

2012

2011

2010

s2 2009

packaging and middle stream chip production base. Research firm ‘LEDinside’ says that the industry made about 100 billion LED chips in 2011 for a market that needs only 89 billion. That 12 per cent “oversupply ratio” will worsen to 21 per cent in 2012 after LED makers add manufacturing capacity. This would mean further drop in LED bulbs and tubes. With more than 30-year development, Chinese light-emitting diode industry has formed the basically complete industrial chains, covering the LED inside, epitaxial wafer, chip package and application. At present, China has over 1100 LED enterprises specializing in downstream packaging and application. But the development of the epitaxial wafer and chip in China is comparatively backward. There are only about 10 enterprises engaged in the production of the

While Delhi sleeps Beijing helps the growth of LED industry in China

2008

cent of the market share. Nichia Corporation is the world’s largest provider of the high-brightness light-emitting diodes. Toyoda Gosei Co Ltd is the world’s fourth largest and Japanese is the second largest manufacturer of light-emitting diodes. Osram Opto, located in Europe and America, is the world’s second largest and European is the largest manufacturer of the highbrightness light-emitting diodes. Taiwan, the global production base of consumer electronic products, is mainly engaged in the production of the visible light-emitting diodes. Taiwan is also the world’s largest downstream

source: ihs isuppli Research, august 2011

LED light bridge

epitaxial wafer for LED, as well as few chip manufacturers. With the gradual enhancement of the luminous efficiency and application technologies, the application of the light-emitting diodes has been transferred from the initial indicator lights to screens, such as landscape lighting, backlight, automobile lights, traffic lights, lighting areas, etc. The application of the light-emitting diodes is now in diverse development. It was predicted that the average compound growth rate of sales of the display lightemitting diodes would be above 15 per cent between 2006 and 2010 and the annual average compound growth rate of sales of the landscape lighting will reach over 35 per cent, with the annual average compound growth rate of sales of the backlight light-emitting diodes at more than 30 per cent. In 2010, many patents in the lightemitting diode industry expired. Chinese enterprises took advantage and broke through the shackles of intel-

lectual property rights from European, American and Japanese giants. They will make good use of huge market bases and abundant labour resources in order to occupy a place in the global light-emitting diode market. Indian Scene In spite of the cheaper technical manpower than China, India has little manufacturing of LEDs; none at the mono-crystalline chip level, none at packaging chips into sources for lighting in various forms and very small application level, mostly from kits from China. India’s LED product sources are just traders of (mostly) Chinese end products. The government of India is too busy with politics of one-up-manship that it is not even thinking of any plan. Investor community have sheepherd mentality and that’s why we see so much unwise investment in downstream levels of PV Solar. There will soon be bankruptcy in that sector. Even

the PV cell manufacturers in India are today trading products from China and Taiwan. China too will see an even more serious crash. No one seems to look at the basics. Out of India’s total use of electrical power over 60 per cent in domestic and commercial area is for lighting. LEDs are basically just like sand so its prices will continue to fall as the high initial investments get depreciated and competition drives down prices. Notice that there is 70 per cent value addition today at the chip level in LEDs. In the next 10 years one might see LED prices as low as or cheaper than conventional light sources. 

PS Deodhar is President of India-China Economic and Cultural Council. He can be contacted at psdeodhar@icec-council.org

July 2012  India-China Chronicle |19|

INFOCUS | INDIA-CHINA | TECHNOLOGY

Wang Yang

Revolution in enteRpRise solutions

Silver bullet in the Cloud The use of customized software is the next big step in the world of computing.

|20| India-China Chronicle ď&#x201A;§ July 2012

nterprise solutions provide a scalable and easy to manage programming solutions for business management and information for industries, organizations and countries. With software and tools tailor made for businesses and governments alike, enterprise software creates an easier way to connect with audiences. These can be considered the final destination for building comprehensive networks as it deals with the problem of providing information to clients both externally and internally dealing with programming and databases for them. A combined study by FICCI and Price Water House in 2011 states that the Indian enterprise segment have been growing at a healthy pace of 20 to 25 per cent CAGR since 2008. With local businesses and a booming economy that is adopting IT and network technology to increase productivity there is no doubt that India too has been bitten by the enterprise solution bug. Enterprise software and its effects can be seen in every facet of our daily lives. Enterprise solutions today provide governments with intelligent transportation, railway monitoring systems and E-government affairs network solutions. Network architecture of data centres of e-government affairs network can realize virtualization of network and resource, convergence of heterogeneous network,

July 2012 ď&#x201A;§ India-China Chronicle |21|

INFOCUS | INDIA-CHINA | TECHNOLOGY

high-speed network connection and intelligent management of the network on the basis of cloud characteristics. By building unified data centers, data service ability and expansibility of the network can be enhanced while realizing the dispatch of resources as required. Enterprise software also helps organizations and governments in commodities traceability and anti-falsification enabling them to inspect the complete supply chain from production to the final stage of retail. The systems are integrated and built to help in tracking the information of the commodities in different stages in the supply chain as well as locate the problem commodities and find a timely solution. All this is done through the complex system of specially designed software and the concept of cloud computing. The concept of cloud computing is based on outsourcing of services, platforms, applications and infrastructure to enable the conversion of capex into opex costs. SaaS, broadband, Serviceoriented architectures (SOA) are some of the technologies that are enabling cloud computing. Cloud and managed

|22| India-China Chronicle  July 2012

storage services are proving to be a ‘silver bullet’ for corporations to increase efficiency while keeping their costs low. ZTE’s CoCloud total solution has been providing complete cloud computing solutions for quite a while now to large businesses. The advantages of cloud computing systems include low monthly costs, automatic software up-

An increAsing number of enTerprises Are AdopTing cloud compuTing And Are gAining greAT benefiTs from cosT reducTion, flexibiliTy, speed And AgiliTy. frosT & sullivAn hAve esTimATed This porTion of The cloud mArkeT To be in The $400 million rAnge AnnuAlly

dates, data back-up, least amount of infrastructural investment to name a few. An increasing number of enterprises are adopting cloud computing and are gaining great benefits from cost reduction, flexibility, speed and agility. Frost & Sullivan have estimated this portion of the cloud market to be in the $400 million range annually. Undoubtedly, cloud represents a huge potential worldwide and in India, and any global IT services leader, cannot afford to miss the opportunity. Even the education sector does not remain untouched and world over customized software specially cloud computing have made a significant change enabling students to learn from the periphery of their homes. From online counseling to classes, customized enterprise software help education centers reach out to a larger audience. This also helps in creating centralized national and international level databases of students and help education providers provide holistic education services. With the growing global population even the complex field of medicine is lending a helping hand. Software designed specifically for the field focuses on the growing demands of hospitals, universities and communities, integrating medical resources and help in downstream and upstream supply chains at vertical and horizontal direction to realize the target of digital hospitals, digital city and harmonious society. These intelligent medical solutions provide services such as hospital basic bearer network construction, medical data storage, wireless access, remote diagnosis, remote visiting, hospital security monitoring, medical assets management and family medical monitoring. The need for such enterprise solutions is becoming increasingly relevant in today’s day, especially as cities all over the country are becoming more modern in terms of technology. As modern cities develop rapidly, the cities are facing great challenges in management and planning, social stability and security as well as sustainable development while the city’s development space is enlarged. ZTE understands these

needs and has creatively put forward the I-City, a smart city solution which is based on hierarchical model of cloud architecture. This solution has helped in developing a city architecture targeting at integration, horizontality and openness by combining cloud computing technology and rapidly building abundant industry applications at a uniform business development platform. ZTE’s smart city system consists of social public security system, government emergency command system, urban intelligent traffic system, wireless city, smart-park and other systems. Social public security system adopts operating model of safe city video monitoring system subcontrolled by primary organizations, mainly controlled by relevant functional departments of individual district, county and municipal governments, and uniformly dispatched by municipal government (emergency response command center). This also includes police reporting sub-system, intelligent analysis sub-system, GIS, GPS, video meeting system, OA system, and multi-field advanced technologies, which improves comprehensive application of technologies related to site investigation and disposition, identification of physical evidence, detection and monitoring, playing the role of limited police force to the highest extent. This system is a powerful comprehensive management platform integrated with digitization, networking, intellectualization and integration. RFID-based city traffic management and service system put forward in smart city solution by ZTE builds comprehensive vehicle information platform with aim to improve platformization and servicisation of vehicle information between public security, traffic and other system, which can fundamentally share vehicle information resources and enhance in-

ZTe undersTAnds These needs And hAs creATively puT forwArd The i-ciTy, A smArT ciTy soluTion which is bAsed on hierArchicAl model of cloud ArchiTecTure. This soluTion hAs helped in developing A ciTy ArchiTecTure formatization of vehicle management by means of RFID-based information collection. In 2008, ZTE created an emergency response and monitoring system for the Ministry of Internal Affairs (public security and fire special police).They went further on to build a private network across the country, linking the departments of police, prison, fire protection, hospital, medical aid and customs and other relevant departments. They also provide users with a uniform

emergency command centre system, prison management system, VOIP phone, video monitoring system, video meeting system and supporting power supply system. For smart power distribution grid sector and under the premise of fully considering the diversity of businesses, safety and reliability, ZTE customizes an EPON-based comprehensive solution with fibrebroadband access for the power sector. These integrated technologies provide perfect, intelligent, strong, advanced and professional solutions, like ODN, business as well as operation and maintenance solution for power distribution automation, electricity utilization information collection currently implemented in power sector and PFTTH projects of smart communities. Power dispatch network solution is the successful practice of ZTE’s Smart IP convergence network and consists of five key elements, including reliability, real-time, safety, self-improvement and network management. ZTE boasts its sophisticated bearer network products in the industry, and can provide data equipment of networks at each level for power dispatch data network. Today it is enterprise software that enables handling everything from national security networking, power grid management, easy bill payment options to online banking, railway bookings to train scheduling. The use of customized software reduces the chances of errors and provides greater accuracy and precision and it is the next big step. 

Wang Yang is Director Enterprise ZTE India

July 2012  India-China Chronicle |23|

INFOCUS | INDIA-CHINA | ECONOMY

IndIa must ready for the leap

Tiger, tiger burning bright

hina continues its relentless pace of growth. It has been growing in double digit terms almost ever since Japan’s growth slowed down in the early nineties. China now is India’s biggest trading partner between the two, relegating the US to the second place after several years. While the West is important for India, it is also time we started looking at our relationship with China closely. The issues with China and Europe are quite different. While China has a huge labour force, Europe and Japan’s labour force is fast dwindling with an ageing population. The median age in Japan is now touching 50 and the problems of a large dependent population are seen everywhere. If the Japanese and the Europeans don’t stop their strict immigration policy, they will at least have to outsource most of their production. And it is India that is ideally suited to take on the manufacturing sector and the electronics sector that the western world might look at outsourcing. What is evident in China is the silent appreciation for India’s rapid strides in the services sector. The Chinese know that they need to move up the value chain and not remain large scale suppliers of manufactured goods. They also realize that India is way ahead on this and can sustain service sector growth for quite a while as its demographic dividend pays and the knowl-

edge economy continues to grow. There are a large number of Chinese delegations coming to India to learn what can be done to help China grow in the tertiary sector. In this it is important for India to continue to harness its strengths and ensure that enough investments are made in the education sector so that the human resource development goes on. It is important to make high school students who will graduate go to college and university so they can be part of the large knowledge economy that the world will have. The reforms in the higher education sector therefore are imperative now. Comparing two giants There are many similarities between China and India. Both have emerged out of a long history of colonialism, with the largest populations in the world. Both have aimed at developing the economy and improving living standards of a vast majority of the population. In the development process, China and India have shared similar experiences, and till recently, their development levels were indeed very close to each other. While China is clearly miles ahead by way of infrastructure growth, India’s capital market is clearly more robust and certain. Telecom infrastructure is comparable in both countries, the education sector is equally strong and technology is leveraged almost at the same levels in each country’s industry. Chinese products are imported for their

lower prices while Indian products are popular in Chinese markets. Evolving from a rural agricultural society, China has become an urban, industrial one. Its vast size and unprecedented speed of industrialisation has led to this. China’s transition from a closed economy to a market economy has also been unique with a combination of experimentation and incremental reforms leading to rapid progress. The result has been a quadrupling of GDP since the late 1970s. During the last two decades, China’s nominal GDP ranking is sixth in the world. With China’s accelerated global integration by intensifying international linkages in trade, investment and finance, the implications have been tremendous. Rapid growth in trade has resulted in high economic growth. In fact, it is predicted that by 2020, China will account for 40 per cent of the increase July 2012  India-China Chronicle |25|

INFOCUS | INDIA-CHINA | ECONOMY

in imports from developing countries, hence enhancing world trade. And foreign investment has encouraged faster specialisation in labour-intensive manufacturing and increased employment and incomes, while reducing poverty. To take forward the cooperation between India and China, it is important the two countries stick to some basic rules of the game in the international trade context. First is the need to firmly practice the simple principles under the WTO-MFN treatment. Both countries need to extend national treatment to goods and services traded and to investments from the other country. Second is the issue of mutual benefit. In the original Panchsheel agreement, one of the important principles was indeed mutual benefit. The anti-dumping cases launched recently against each other do take away from this principle, and there is an urgent need for the commerce ministries in each country to sort this out mutually without escalating the conflicts. Third is to focus on the comparative advantages enjoyed by each economy. The goods that are now being imported from China are chemical products, machinery, electronic goods, raw textiles, base metals and plants. China imports from India minerals, textiles, chemicals and jewellery. There is greater scope for complementarities in trade in goods and in services. The boom in the middle class Indian market provides a great opportunity for Chinese electronics and other fast moving consumer goods. China on the other hand is among the world’s biggest markets for processed food, natural fruits and vegetables, minerals and handicrafts. Technical books and journals constitute another potential area for Indian exporters. Medicinal plants, herbs and tropical products find a large market in China. Finally it is also important to take serious note of the large amounts of mutual investment that is increasing rapidly. The tourism sector has also started benefiting from visits to each other’s countries. India’s service sector is well positioned to avail the opportunities in software development and training work in China. China on the other hand has great expertise in engineering |26| India-China Chronicle  July 2012

and particularly in the construction sector, that in India is on a never before ascendance and mutual cooperation there would indeed be beneficial. The Indian capital market, banking sector and insurance sectors, with their credibility and experience will find it easy to exploit the Chinese markets while the nascent food processing sector in India can well learn from and attract investment from China with its long history in agricultural development. With both countries sitting on healthy foreign exchange reserves and no balance of payment issues in sight, it is the right time for mutual investments to take off. With better understanding of each

loving, lazy and laidback. The Indian economy through the decades of the fifties, sixties and seventies was seen as one that was ambling along languidly, content in its slow pace of growth and oblivious to anything that was happening in the neighborhood. It is only recently that the elephant analogy has been dispensed with. India’s economic growth is these days increasingly seen through the imagery of a tiger; hungry, competitive, combative and fast paced. In the last twenty years, this picture has changed dramatically. For instance, in 2009-10, India received 5.9 billion dollars of foreign aid. On the other hand

of which are the national rural employment guarantee programme, the Sarva Shiksha Abhiyan and the Bharat Nirman. In gross terms, India GDP now is the third largest in the world, with a total GDP of 2 trillion dollars and the country is getting to become a super power. What is remarkable about the 20 years of economic reform we have seen in India is that when the reform journey was started by Dr Manmohan Singh, there was great scepticism around the process. Everyone declared that these changes would land India in trouble, poverty would grow, Indian

Given india’s GrowinG trade diversity and the emerGence of some larGe Global players in the private sector, we will also soon see indian investment movinG eastwards. therefore the importance of movinG towards an asian economic Union for which some attempts have been made other’s societies, cultures and policies, aided with some robust research, this new friendship can take both countries a long way in their quest towards development and growth. A mature political leadership is already in place in both Beijing and Delhi. With a little more relaxation in norms, a little more certainty in policy and improvement in travel facilities by way of more frequent flights and easier visa regimes, this partnership contains the potential of transforming the way international trade happens today. India’s national animal is the tiger, but the animal that is most associated with us is the elephant. For long, India has been seen as a huge lumbering beast, patient, by and large peace

up 50 times and now is more than one lakh crore rupees a year. Also, such growth did not come to India by simply leveraging low labour costs. China and the other East Asian economies had grown fast as they all sold their low labour costs and produced cheap manufactured goods on low wage costs to make money in the export market. India instead chose to export brain intensive goods and not the labour intensive ones. Unlike China that became known for toys and machines that were mass produced using cheap labour, India became known for software exports. What is more is that software exports are actually a negligible portion of our total exports, it is the other intellectual areas that India’s exports have grown in. Exports of legal,

in the development process, china and india have shared similar experiences, and till recently, their development levels were indeed very close to each other.

51 billion dollars came through foreign investment and 54 billion dollar through non-resident remittances. India was a really poor economy then. Per capita income 20 years ago stood at 300 dollars per annum, meaning that the average income of an Indian was less than 400 rupees a month. Today the per capita income is at 1500 dollars, that is about 60000 rupees a year, or Rs 5000 per month. Such huge increases in income have resulted in tremendous increase in revenue income for the government, so much that there is ample money at hand to spend on schemes for the poor that are the biggest the world has ever seen, examples

companies would close down, everything would be imported and foreign firms would rule the market. None of this proved right. Poverty has come down significantly, though not fast enough. Some firms that could not compete closed down but a vast majority of Indian firms have held their own and grown to become some of the biggest companies in the world. In fact they are the ones that are now buying firms abroad. Foreign investment by India is now as much as foreign investment in India. Instead of the government reducing moneys spent on the poor, expenditure on welfare increased manifold. The food subsidy itself went

engineering and medical services, automobiles and pharmaceutical products have risen really fast. Contrary to all expectations, India became a hub of efficient and frugal engineering, of which the Nano car is a foremost example. The other notable examples are the telecom sector where our tariff is the lowest in the world, our eye care and heart care that is carried out at a fraction of the cost in similar facilities in the West and at comparable quality levels. Most Fortune 500 companies now have set up shop in India, and a large number of them have their R&D facilities in Hyderabad and Chennai. What is also remarkable and often ignored is the fact that our stock exchange was recreated after the Harshad Mehta scam and the electronic NSE that came up was computerized even before London and New York and

the capital market has become among the most efficient around the world. However there is much that remains to be done. If we have seen such laudable achievements on one hand, on the other hand growth seems to have bypassed poor regions where we have seen militancy grow. Dalits are still not well off, despite some phenomenal improvements since 2004 in the poorest of states. The fastest growth rates now are seen in Orissa, Jharkhand and Chattisgarh in terms of industrial growth. Inflation has been persistently high and agriculture reforms have not been carried out. The biggest problem however, is in terms of poor quality of government services. The police and the judiciary need to be augmented and modernized because in India there is no justice, and that is scary. True equality of opportunity will come only when we improve our governance, law and order. The next 20 years of reform must see improvements in these areas. Given India’s growing trade diversity and the emergence of some large global players in the private sector, we will also soon see Indian investment moving eastwards. Therefore the importance of moving towards an Asian Economic Union for which some attempts have been made. With India’s public sector also looking to move beyond India’s borders it will be critical for policy to make this transition possible. Also what business will have to watch for is the way in which the Chinese currency will move, the pace at which Japan will recover and the opening up of various sectors in ASEAN that will allow Indian forums to spread their wings. To be able to make a mark in these emerging areas, India’s business heads will have to counter challenges on various fronts and ensure they make use of the new opportunities that are being created. 

Amir Ullah Khan is Deputy Director of the Bill & Melinda Gates Foundation, New Delhi

July 2012  India-China Chronicle |27|

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Bittersweet story

Where is the industry that turned gur into chini? |28| India-China Chronicle  July 2012

The simple, sweet gur from India was transformed into shiny white crystals of sugar in China; thus the name chini for sugar: A wonderful little tale of sharing and innovation between the two countries of the East.

ince ages, the flow of technology from east to west traversed through the old silk route. In 2nd Century BC, four major technologies – paper making, printing, gunpowder, silk and compass – developed in China changed the world. It is a well-known story that a Han princess smuggled silkworms and mulberry seedlings to the West via the Silk Route. Thus, technological exchanges between east and west during the 2nd century have been well documented. It is also well documented that technologies from India moved to China and vice versa. Historians also confirm such exchanges took place during the same period when Chinese travellers were first introduced to the extract from sugarcane; molasses or what is known as gur in Indian homes. This home-based technology was adopted by Chinese travellers, which was then further developed and refined into sugar granules in China. Over a period of time, the refined sugar was introduced to Indians by subsequent Chinese travellers and thus the white crystals of sugar came to be known as chini in the Hindi heartland, a tribute to its origins. There are many such examples of scientific knowledge being shared between the two civilizations. In the eighth century, Gautam Siddha translated Aryabhata’s astronomical signs into Chinese in his most famous work known as KaiyuanZhanjing. Gautam Siddha was a Chinese of Indian descent and he also translated the Naba-

graha calendar into Chinese. With such a glorious past of scientific and technological cooperation between the two countries, due to known and unknown reasons such strong engagement later remained disconnected for almost four decades. Even though politically we looked at opposite directions, the Wing Sung pen was one of the most popular Chinese items available in most households in India. Likewise, Indian yoga had crossed the borders and gained acceptance in China long time ago. We may have looked away from each other for political reasons but economic and social ties remained intact overtly and covertly during this time. The West has always tried to pit the two neighbours against each other in almost all types of international discourse. For instance, the Rand Corporation, an influential US strategic think tank in its report said China and India will exercise increasing influence in international affairs in the coming decades and each country’s role on the world stage will be affected by the progress that it makes and by the competition and cooperation that develop between them. In other words, as late as 2005, the West was still pitting the neighbours against each other. Their reasons are understandable because the combined market of India and China comprise more than 30 per cent of the global market. Status of Science & Technology Scientific research, invention, and innovation are key drivers for development and growth. The S&T prowess of both countries are well recognised. China emerging as a superpower in manufacturing due to its concerted efforts in the building block of manufacturing technologies through transfers, development, adaptation

PD Kaushik

Adviser - Legal Affairs, ICEC

silk route

July 2012  India-China Chronicle |29|

INFOCUS | INDIA-CHINA | TECHNOLOGY | COVER STORY

BALCo Project and thermal power project in Andhra Pradesh by Chinese companies

and adoption, in the initial stages of military hardware and then subsequently diversifying into the manufacturing sector. Likewise, India adopted another route to emerge as the second largest pool of English speaking S&T personnel through its IITs and NITs, etc. Later, it focussed its abundant trained human resources on software and then diversifying into services. However, it is also true that both emerged as a science and technological super power independent of each other. Today, China has emerged as a major innovating country in this region. It is the third largest R&D spender in the world after the US and

|30| India-China Chronicle  July 2012

Japan. In 2009, China revised its national patent law to boost indigenous developers of technology and then went on to issue 580,000 patents in the same year. In 2011, China surpassed the US and Japan in the number of patents filed, experiencing a rise of 73 per cent in domestic patent applications over last year. In other words, domestic companies were overtaking overseas companies in filing patent applications. Despite lot of criticism, China is putting a lot of effort in initiating a transition from “Made in China” to “Designed in China.” On the other side of the border in India, the overseas companies continue to dominate in filing patent applications. In 2011, 37,000 applications were filed in the Indian Patent Office. But the figures of other forms of intellectual property experienced a quantum jump. For instance, almost 170,000 applications were filed for trademark alone. In other words, there is wide gap in the absolute numbers between the two countries. However, it is also true that almost 80 per cent IPR applications filed in India receive registration as compared to 68 per cent in China. On the policy front, both countries have adopted a more or less similar path with little divergence. For instance, the Gross Domestic Expenditure on R&D as a percentage of Gross Domestic Product or research intensity varied from 0.8 to 1.0 for both countries during 1995 to 2005 period. However, during the same period it was revealed that the share of government expenditure on R&D as a percentage of GDP was almost two times more in India than China. In other words, research intensity in India was more government driven than industry sector due to higher education funding. Conversely, the research intensity in China during the period was primarily driven by the industry than government spending. China has set its target in the recently announced 11th Plan document to raise its Gross Domestic Expenditure on R&D to at least 2.5 per cent of GDP, raising the total factor productivity to 60 per cent of GDP growth and number of internationally cited Chinese articles to rank in the world’s top five by 2020. On the other side, India’s 11th Five Year Plan (2008-2013) calls for tripling its investment in S&T, almost 2.5 per cent of GDP. Though both countries envisage increased investment on S&T, but in absolute terms China is way ahead of India. Both countries have emerged as a powerhouse of S&T manpower in the world. China graduates 600,000 engineers as compared to 350,000 engineering graduates from India every year. However, the quality aspect of engineers considerably influences their employability at

indian companies in China

international level. McKinsey Global Institute’s survey (2005) covering 83 MNCs revealed that 25 per cent of Indian engineers were employable as compared to 10 per cent of Chinese engineers. This figure dips sharply for both countries in PhDs and other higher education courses. The main reason for low employability was attributed to lack of hands-on experience despite solid theoretical training, overall communication and cultural style. On the other side, the employability of engineers and S&T personnels between India and China is much worse because of a variety of other reasons, besides language and work culture. For instance, a motor mechanic or a technician is considered as an engineer in China. In fact, any course with engineering in the title is regarded as engineer regardless of the number of years needed to obtain the degree. Undoubtedly, both governments have recognised such anomalies and are closely engaged to sort out such issues. India & China Exchange India-China ties have lately moved from strong to stronger in the new millennium. Bilateral trade continues to be the major success story of India-China relations. It is galloping for-

ward at a tremendous pace and recent estimates suggesting that India-China bilateral trade will touch the magical figure of US$ 100 billion by 2015. Both governments believe that bilateral trade is the most important factor to promote bilateral relations. Except border issues, both countries have made rapid progress in variety of areas like culture, society and science and technology. Does technology flow takes place between India and China? Technology flows not only from R&D institutions to industry, it also flows from people to people, industry to industry, country to country. In other words, technology is just a subset of knowledge, and essentially knowledge is the driver of growth. The transition from gur to chini is an apt example showcasing exchange of knowledge between India and China which led to further development of knowledge for sugar making. Growing trade between the two countries is an indication of growing exchange of knowledge. In the recent past, about US$ 231.4 million worth of Chinese investments were approved, of which only US$ 0.61 million has been the actual inflow. Major impediment in inflows from China is the Indian government’s certain re-

Chinese travellers were first introduCed to the extraCt from sugarCane; molasses or what is known as gur in indian homes. this home-based teChnology was adopted by Chinese travellers, whiCh was then further developed and refined into sugar granules in China. over a period of time, the refined sugar was introduCed to indians by subsequent Chinese travellers and thus the white Crystals of sugar Came to be known as chini in the hindi heartland

July 2012  India-China Chronicle |31|

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unshaCkled flow of knowledge between india and China is a reality and this flow is ever expanding. hardware knowledge is flowing from China to india and software knowledge is flowing from india to China

strictive policies to Chinese goods and services, especially services under Mode 4 – movement of natural persons. Chinese investment is quite significant in infrastructure projects. Chinese companies have taken up projects in India to the tune of US$ 1 billion, like thermal power project in Andhra Pradesh, BALCO Project, National Highway Projects, etc. Indian delegation comprising TATA Steel, Essar Steel, SAIL, and many others steel manufacturers, held talks with China Steel and Industry Association recently to explore possibilities of collaboration in areas like technology transfer, engineering design, operation, construction and R&D. The focus of discussions remained on shifting manufacturing base from China to India, especially in equipment manufacturing like pelatisation, blast furnace and coke oven. Both China and India showed interest in expanding their engagement through an investment of US$ 120 billion in the steel industry over the next 10 years. In the past, almost 250 major Indian companies have invested in China, as the against 60odd Chinese companies which have invested in India. But these numbers are likely to jump with the setting up of the Joint Study Group. India and China have stepped up functional cooperation in areas as diverse as culture, trade and economy, water resources, audit, personnel, mining, space, science and technology, etc. The two sides agreed to further promote cooperation in the spheres of education, science and technology, healthcare, information, tourism, youth exchange, agriculture, dairy development, sports and other fields on the basis of mutual benefit and reciprocity. Chinese investments in India have broadly followed the following trend: a) Going it Alone – Large sized Chinese companies, usually the State Owned Enterprises (SOEs) have sufficient resources and bandwidth to go it alone in any market. They prefer to set up wholly owned subsidiaries in India on their own for R&D, sales and marketing, sourcing raw materials and intermediate goods, etc. b) Trusted Joint Ventures – Few large Chinese companies with sufficient long term interests in India have chosen to partner with their most trusted local business partner. Such trust based relationship might not be synergistic in a

|32| India-China Chronicle  July 2012

conventional sense but certainly have illustrated the Chinese way of doing business. For example, one large Chinese listed company with subsidiaries in 18 countries has partnered with a small family-run business based in a small Indian town with a business presence nowhere else in India. Likewise, there are other examples where a large Chinese company has simply stuck with its first ever customer in India. Yet another large Chinese company has chosen to partner with an individual businessman who acts as their representative on the board of an Indian company. c) No Strings Attached, Only Some Contracts – Many Chinese companies daunted by the complex regulatory regime in India preferred to operate through purely contract arrangements without investing in long term assets. Such contractual arrangements include leasing capacity in an existing unit, hiring another as an exclusive distributor, and contract-

ing yet another to provide after sales support to its erstwhile customers, or any other similar combination of contracts. d) Goods in Exchange for Shares – As recently in July 2011, the RBI allowed Indian companies to issue shares to foreign companies in exchange of capital goods/machinery/ equipment or even second hand machinery but subject to certain conditions. In view of large imports of capital equipment from China, this move offered a simple and straight forward method for Chinese companies to capitalise on growth prospects of the Indian market, without having to set up their own operations or entering into JVs, etc. However, this form of entry is still in its infancy but definitely shows potential. China has emerged as the largest trading partner of India, but India is still its tenth largest trading partner. The trade basket is an indication of what flows from India to China and viceversa. For instance, Ores, slag and ash constitute 42 per cent of Indian exports to China, followed

by cotton, copper articles, etc. During the same period, electrical machinery constitutes 30 per cent of all imports from China to India, followed by mechanical and project equipment, boilers, etc. In other words, the trade basket reveals that there is a net flow of technology from China to India. However, the growing presence of Indian IT majors in China is also indicative of knowledge flow from India to China. For instance, Tata Consultancy Services, Tech Mahindra, Mahindra Satyam (formerly Satyam Computers), NIIT, 3i Infotech, Nucleus Software, Wipro, Mindtree Consulting, and Genpact have their presence in China for a long time. As recently as in late 2011, Infosys Technologies, HCL Technologies, Zansar Technologies, BirlaSoft, and KPIT Cummins have made additional investments in China. Thus, unshackled flow of knowledge between India and China is a reality and this flow is ever expanding.

Hardware knowledge is flowing from China to India and software knowledge is flowing from India to China. Face-2-Face: People’s Perception How do people living on both sides of the border feel about each other? The perception survey revealed that a large majority of Indians view the “Made in China” tag with suspoicion due to its unreliable quality and cheap pricing. Likewise, Chinese find socio-economic disparity in India a major weakness of the Indian market. The survey threw up a variety of issues which influence business decisions considerably on both sides. For instance, there was an overwhelmingly favourable response for freer trade between both countries. On this issue, more than 80 per cent respondents from both side favoured freer trade. However, the surprise result was that those who opposed the proposition were from Indian industry and were quite diffident on the issue of freer trade with China.

Indian Response on Rank Strength of Chinese Economy Fast paced economic development 1 Excellent infrastructure 2 Huge domestic market 3 Boom in the service sector 4 Compliant and cheap labour 5 Stable currency 6 Abundant natural resources 7 Indian Response on Weakness of Chinese Economy Socio-economic disparity State ownership Weak legal regime Corrupt bureaucracy Dependency on trade Slow market oriented reforms Thriving black economy

Rank 1 2 3 4 5 6 7

Chinese Response on Strength of Indian Economy Huge domestic market Compliant and cheap labour Booming service sector Abundant natural resources Planned economic development Good infrastructure Stable currency Chinese Response on Weakness of Indian Economy Socio-economic disparity Slow market oriented reforms Corrupt bureaucracy Weak legal regime Dependency on trade High transaction costs Thriving black economy

On the other side, the business community in India, largely comprising of retailers and wholesalers, was excited about liberalising trade between both countries. Intense competition and fear of dumping goods were the reasons for diffidence and others who were in favour of free trade gave low prices and good packaging as reasons for their response. On a broader canvas, the Chinese respondents ranked the strengths of Indian economy and likewise Indian respondents ranked the strengths of Chinese economy. It was interesting to note that though many respondents have not visited their neighbour but were quite informed. A large market is recognised as the strength of both countries. The Indians were quite influenced by the availability of a strong infrastructure in China, but the Chinese ranked Indian infrastructure facilities as low. Chinese respondents showed their interest in the booming service sector in India. It was understandable that both countries dealt with each other in terms of the US dollar and therefore the stability of each other’s currency was kept at a low priority. If these observations are further explored on the basis of occupation and region, it was quite surprising that the response did not exhibit any major variation in terms of ranking. Both occupation-wise and on regional basis, the response of ranking remained the same. However, ageApril 2012  India-China Chronicle |33|

INFOCUS | INDIA-CHINA | TECHNOLOGY | COVER STORY

group response showed considerable variation in terms of ranking. Responses from below 40 years, coincided with the general ranking trend, but all above 40 differed in their ranking by listing compliant and cheap labour as the strength of both economies. The respondents were also asked to rank the weaknesses of the respective economies. Once again the results were interesting for policy makers. Respondents from both sides opined that a growing socio-economic disparity is a major weakness of the respective economy. In other words, there is a large population existing in both countries who is deprived of the benefits of development and may become a major cause off unstability in the long run. Interestingly, respondents from both countries ranked a thriving black economy at the lowest. During interviews, it was revealed that the respondents have accepted counterfeits and

both Countries are Competitors in some areas but there are many other areas where they Can Complement eaCh other. though the story of hardware and software is old, but in reality not muCh progress has been made in this direCtion

The variations in certain cases were on account of poor understanding of the issues and their short and long term impact on the economy. For instance, the issue of black market was confused with underhand dealings in some cases. The respondents were also requested to identify areas which they felt could be possible areas of economic cooperation. The Indian respondents showed their interest in collaborating with Chinese companies in areas like electronics, services and textiles. However, during the interviews it was revealed further that under electronics, Indian respondents were interested to collaborate in areas like solar technology, embedded technology, control systems, etc. Likewise, textile equipment and machinery were the most preferred areas in the textile category and security and surveillance, in the service sector. Indian respondents also favoured collaborations in engineering, chemicals, instruments,

Indian Preference for Collaboration with Chinese Firms

technology, engineering, pharmaceuticals, etc. The Chinese response was largely influenced by the hype created by the western media on the software and biotechnology prowess of Indian companies. However, during interviews it was revealed that their response was driven by specific interest in software and bio-technology. The software prowess of India dominates the Chinese mind and hence such an overwhelming interest. However, diversified interests in engineering and chemicals also indicate towards some serious reasons. For instance, the Chinese entrepreneurs are interested to collaborate with auto-components OEM suppliers in India because of their domination at the international level. Likewise, their interest lies in heavy engineering equipment manufacturing and electrical machinery. One of the reasons cited during the interview was to gain access to Indian market as the competition was low in these sectors but

has been made in this direction. Likewise there are many other areas where both countries can partner with each other for mutual benefit. Performance in science, technology, and innovation has continued to strengthen in recent years worldwide, especially in India and China. India and China have become major destinations for foreign direct investment (FDI). They are increasing their share of high-technology products and services and also broad-basing their export structures. Both countries have realised that knowledge, more importantly science and technology, play a crucial role in achieving economic development and growth. Consequently, their respective five-year plans chalk the roadmap for the future which essentially rests on S&T development. Knowledge grows with exchange as the history of India-China suggests. Foreign direct investment is another way of accessing technology and both countries

Chinese Preference for Collaboration with Indian Firms 1%

32%

8% Software Engineering

Engineering

32%

Textiles 11% 14%

illegal copies as part of conventional business and therefore did not considered it as an important issue to determine it as a weakness of the economy. On the other hand, respondents on both sides of the border exhibited their wariness on the issue of corruption and weak legal regime. Understandably, one may have scores of laws but if the enforcement is weak then it adversely affects trust and confidence in the business environment. It was quite revealing that respondents from both sides of the border felt that each other economies were too dependent on trade and both sides ranked it at the same level. Slight variations were observed in the ranks on the basis of occupation, region and age group. However, a large majority in each category ranked the issues as per the general trend. |34| India-China Chronicle ď&#x201A;§ July 2012

Electronics

21%

58%

Biotechnology

Services

Chemicals

Services

Others

rubber, dies and tools. However, their requirements were quite specific. For example, a petrochemical plant requires bulk supply of certain essential chemicals and re-agents and the respondent felt that China can be the only source for uninterrupted supply for bulk consumption. Likewise, dies and tools in large quantities can be obtained from China at competitive prices. Thus, some of the responses were driven on account of accessing state of the art technology few were driven out of necessity for uninterrupted supply and fewer purely driven by competitive pricing. Chinese respondents also revealed their interest to collaborate with Indian firms. Some of the most favoured sector identified for collaboration with Indian firms included software, bio-

that the Indian market was too large. Besides, few Chinese respondents showed interest in the BPO and KPO revolution in India. The year 2012 has been declared as the India-China Year of Friendship and Cooperation at the BRIC Summit which was held in New Delhi. People on both sides of the border have shown deep interest and preference for closer ties. Trade volumes are growing between both countries. Now if political expediency is replaced by economic rationality, then both countries are looking at each other as partners for mutual benefits. Undoubtedly, both countries are competitors in some areas but there are many other areas where they can complement each other. Though the story of hardware and software is old, but in reality not much progress

have become the most favoured destination for the developed countries. However, both countries should now look at the future and move towards investments from a purely commodity trade perspective. Already growing trade deficit is causing a lot of heartburn, but investment flow will ease the pressure of deficit. On the other side, we must ease out restrictive policies to get the benefit of collaborative efforts. Both nations are standing at the cusp of development; a right turn together will push them both into a different orbit. Both sides will have to show maturity and understanding for building mutual trust and confidence. We have a glorious past of cooperation and collaboration; let us now paint a future which can give hope and prosperity to billions. ď ą July 2012 ď&#x201A;§ India-China Chronicle |35|

INFOCUS | INDIA-CHINA | INTERVIEW

More exchanges needed to promote trade with China The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) President JR Bangera speaks to ICC on a host of issues relating to trade with China.

What was the focus of this year’s Global Investors Meet (GIM) and how was it different from the meet in 2010? Enthused by the phenomenal success of the Global Investors Meet held in 2010, which attracted massive investments to the tune of over Rs 6 lakh crore, the present government headed by Chief Minister DV Sadananda Gowda hosted the Global Investors Meet 2012 from June 7 to 8. The event aimed to bring together business leaders, investors, corporations, thought leaders, policy and opinion makers under one roof. Apart from exhibitions and sectoral seminars, one-to-one meetings, B2B meetings and B2G meetings were also organised as part of the global summit. Some of the large corporates whose projects have been approved are Ultratech Cement, GMR, Grasim, NMDC, Luxor Energy, Hindustan Coca Cola, Lanco and KNR Constructions among others, while GVK is now on controlling the stake in the Bangalore International Airport Ltd (BIAL). |36| India-China Chronicle  July 2012

Which countries participated in the GIM? The government conducted road shows in Singapore, South Africa, Japan and Taiwan and all these countries along with Germany and the US participated in various fields of the global investors meet. What efforts are being made to make Karnataka a global destination for investment? The Karnataka government’s ongoing efforts to highlight investment and growth opportunities throughout the state are getting healthy media coverage. Efforts to promote investment beyond Bangalore are also producing good feedback from the industries. What are the challenges that investors face in Karnataka? The atmosphere is conducive to make investments in Karnataka right now, but the state government needs to keep its promises and deliver them on a time-bound manner. Poor availability of quality power may hamper the implementation of projects if the

state fails to take some remedial measures immediately. GIM in Bangalore also raises doubts over the implementation of these big-ticket investment proposals due to various bottlenecks and lack of infrastructure. The government can do a lot by ensuring the supply of quality power to industries. The proposed industrial corridor between Chennai and Mumbai via Bangalore should be taken up on a priority basis to realise investments into the state. How is China looked at as a potential investor? China can contribute greatly in multiple sectors like automotive, manufacturing, food processing, pharma, telecom and largely the agro sectors. Have there been any initiatives taken to promote GIM in China? I don’t think the government of Karnataka has seriously tried to promote GIM in China maybe due to the lack of networking with Chinese bureaucrats and trade bodies! What is the status of the IT industry in GIM? Karnataka is the leading IT hub of the country and Bangalore is the

fourth largest technological cluster in the world after Silicon Valley, Boston and London. With a third of India’s software technology park units, the state is the country’s largest software technology hub. Over 2100 IT companies constitute over 20% of the IT companies in the country India’s largest software exporter. What is the scope of other technology sectors like biotechnology/green technology in India and more specifically Karnataka? Karnataka is a leader in the biotechnology, information technology, aviation, machine tools, textiles, floriculture, coffee, horticulture, fisheries and silk sectors. Karnataka is the base for 87 Fortune 500 companies and 700 multi-nationals. Karnataka was the first to have an industrial policy, tourism policy and state facilitation policy. The progressive initiatives of IT Policy, BPO Policy, and Biotech Policy have attracted many organizations to set up office in the state and hence it has become a major Hub. What are the trade relations with China regarding the IT industry? Trade relations with China are always driven by the Union government and the same policies are applicable in Karnataka state too. India has a lot of scope when it comes to exporting IT industry products to China. What has been done to tap the Chinese market? Indian exports to China are an integral part of the bilateral trade relations between the two Asian countries. Indian exports to China focus on mainly primary products. In 1984, India and China signed a trade agreement, providing for the Most Favoured Nation treatment to foster greater cooperation between each other. There exists a steady demand for IT products in the Chinese market. In order to increase the level of Indian exports to China, there should be a continuous interaction through exchange of delegations, enhancing participation in each other’s trade fairs

and seminars and facilitating trade through positive initiatives. Is there any government policy that helps in trade between India and China specific to the IT industry? As I said earlier that trade policies of Karnataka is no different from Union government policies and always driven by the policies of Union government. What do you think is the feasibility of having an FTA with China in regard to trade in software? It’s a very difficult question to answer as these FTA is between two nations and not between a nation and a province. What are the challenges that IT co’s face when trading with China and how can these be overcome? India now stands out as a globally recognizable brand in the IT business sector. However, in the cloud of current global economic crisis the sea is not yet calm. In the wake of another recession winding down in global markets, Indian IT service providers are now cautiously optimistic as they take on the challenges the Indian IT industry is presently confronted with. However, identifying and addressing the challenges at the right moment can reduce its impact significantly. IT experts are analysing the impending challenges for the Indian IT sector as another recession is now looming

around the global economy. Combined efforts from IT top-level management, government, educational institutions etc can help India sail safely to a position of being the world’s leading IT destination. How, do you think trade can be promoted with China? There should be continuous interaction through exchange of business and cultural delegations, enhancing participation in each other’s trade fairs and seminars and facilitating trade through positive initiatives. What are the other potential industrial sectors in which Karnataka can collaborate with China? Karnataka can collaborate in many areas, particularly in steel, engineering, agriculture and bio–similar; Areas like automotive, electronics, processed food are also equally important. ICEC is an organization that helps in bridging the gap between India and China. How according to you can this organization help to promote trade between the two economic giants, specifically in terms of technology. We are already in the process of taking a business delegation to China. We are very sure that the government of Karnataka will extend political clearance. FKCCI will be glad to sign MoUs with various trade bodies of China. There is great opportunity to improve bilateral trade and cultural relations.  July 2012  India-China Chronicle |37|

INFOCUS | INDIA-CHINA | TECHNOLOGY

IndIa, ChIna onlIne

Spreading the Web Both India and China are on the threshold of a Web revolution.

|38| India-China Chronicle  July 2012

Shwetank Dixit

he World Wide Web has brought people together like never before. It has been used to exchange valuable information, fuel industry, and foster a sense of connectedness amongst each other. The use of the Web is rising, and with it, becoming more influential in all our lives. In what ways is this growth happening in India and China, and what promise does it hold in the future? Why the Web matters in India and China? The Web matters everywhere. However, in India and China, it’s becoming a great tool for the masses and in the coming future would be increasing in importance every year. The reason is that India and China combined are about one-third of entire humanity. If the web is to continue to succeed, it needs to cater to this significant portion of human population. There are plenty of problems being faced by the people of both countries and the World Wide Web can help in improving at least some of these in a significant way. One of the primary ways in which the Web matters to both countries is the exchange of valuable information. In such huge populations, traditional education needs a supplement by which students can learn on their own. India has been working on the ‘Aakash’ Tablet, which it plans to give to every government college student eventually. One of the main aims of the tablet project is for students to use information technology and the internet in general to find additional resources and communicate with other fellow students. China is known for its large and skilled manufacturing base. However, it is aiming at being a globally known power in Information Technology in the same way (if not better) than its neighbour India. For that to happen, the role of the Web would be crucial to disseminate knowledge and increase the right kind of communication amongst students. Being two of the most dynamic economies of the world, the time is right for e-commerce to pick up too.

Taobao.com is already huge in China and is overall the 14th most visited site in the world. In India, E-commerce is finally taking off too, with sites like Flipkart.com receiving a billion dollar valuation, and other competitor sites doing promisingly well too. The sheer size of the growing middle class combined with the growing internet penetration in both the countries make them ripe for investment in online commerce. These are likely to provide more avenues for manufacturers to sell goods, and that too to an audience, a size never seen before. One other promising avenue fueling commerce and industry is the large migrant populations in both countries. There is a large portion of people who are still unbanked in both countries, especially in India. The way in which they send and receive money is through physical transfer of cash. Experiments in other developing countries, especially in countries like Kenya and Tanzania have proved that mobile banking can be a success. These types of money transferring services usually have better potential among economically weaker sections of society. If such mobile banking initiatives become popular in India and China, and online services start to support transaction using this system it will open up commerce to huge sections of society which till now thought that online services were just

something for the rich and the middle class. Other innovative strategies for transactions such as ‘Cash-on-delivery’ have been crucial to the success of many popular online services in the region and will continue to be so in the foreseeable future. A large migrant population also strains the transport systems during peak seasons. China and India are already investing in the transport systems of their respective nations, with China being particularly aggressive in building high speed train networks, and laying down highways (its highway network is the second largest in the world). Despite all this, there is heavy strain on the transport infrastructure during peak seasons, and the Web can help with bringing people together online without actually being physically close. As broadband and 3G internet grow, the popularity of video chat and conferencing services will increase, thereby reducing the need to frequently travel from one place to another unless really necessary. However, this is significantly dependent on the respective nation’s willingness to invest in faster internet access for people. Commonalities and contrasts in web usage India and China are both fast growing, dynamic, developing economies. Yet the challenges we face are still great, and there is still a long way to go. There are a few commonalities that almost all developing economies face and this translates to the World Wide Web too. July 2012  India-China Chronicle |39|

INFOCUS | INDIA-CHINA | TECHNOLOGY

One of the key commonalities shared between the two countries is the rise of the mobile web. Mobiles have exploded in both countries, with China having around 79% mobile penetration and in India it has reached more than 75%. It is obvious that in a country with so many mobiles, and relatively less desktop computers, the primary mode that people will use to access the World Wide Web will be on mobiles. According to research by mobile-specialist firm OnDevice, 38% of web users in China use only mobiles. According to the same firm, 90% of Indian mobile internet users browse at home. This points to a peculiar but important point -- the majority of mobile web users in India and a significant portion of web users in China are using the mobile devices as their primary means of accessing online content, which is unlike the West where it is used as a secondary means, the primary ones being their laptops or desktops. It is clear that when it comes to the web industry in these countries, the mobile is the new frontier. However, what kind of mobile phones do the majority of the people use to access the web? In China and India, the answer is similar. According to the Opera Software’s State of the Mobile Web Reports, the majority of handsets being used to access mobile content are low-end feature phones. This co-relates well with the situation on the ground too, as the majority of the mobile phones used are indeed at the low end. In the coming years, the percolation of smartphones will increase as the costs go down.

|40| India-China Chronicle  July 2012

However, for now, the majority is still using low end devices and thus accesses the web on those devices. However, the same reports point to an interesting contrast as well. When it comes to the most popular sites in China, they are all in local languages. Websites in English rarely, if ever, do well in China. On the other hand, India has so far adopted English language sites and the most popular sites there almost all in English. These points to the absolute importance of localization in a country like China, and how important it is. In India, you can get away with an English site with no support for local languages. However, the importance of regional and localized content even in India will be taking new heights as more and more people from economically

Taobao.com is already huge in china and is overall The 14Th mosT visiTed siTe in The world. in india, e-commerce is finally Taking off Too, wiTh siTes like flipkarT. com receiving a billion dollar valuaTion, and oTher compeTiTor siTes doing promisingly well Too.

backward backgrounds start to access the web on mobiles. A lot of the poor in India do not have the resources to send their children to an English medium school, and thus are not comfortable with that language. As more and more of them get access to mobile phones, and more and more public services get online, the demand for catering to this portion of the population will also increase, which means increased web content in localized languages. We are already seeing a reflection of this trend in other forms of media in India, such as TV where a majority of prime time content features tie-in with rural or small town india, and the increase in ad spending by industry in regional language newspapers. Another interesting contrast is the nature of the most popular sites in both India and China. Due to the fact that English websites can be largely understood by the majority of Indian web users (though the situation may change a bit in the coming future), global properties have had more success in India than in China. That is why local variants of globally successful sites have done so well in the Chinese market. An example of this would be Weibo, which is a slick, well executed micro-blogging service quite similar to Twitter. A lot of popular sites in China are also portallike, with lots of text heavy areas and some images in between. In India, this portal like preference is not seen, with the home pages of most popular sites like google.com, facebook.com having less of a text-heavy approach.

The future The future holds a lot of promise when it comes to the Web in India and China. The great thing about the Web is that it is the World Wide Web\ and there are some developments which will affect everyone online all around the world; India and China being no exception. However, the way in which India and China adopt new developments will lead to different outcomes. One of the biggest things to affect the Web in the coming future will be the rise of HTML5 and related technologies. HTML5 is the latest version of HTML, the markup language used to write web pages. HTML5 and its related technologies enable browsers to render webpages capable of much more than before. Examples include offline applications, access to device capabilities (like the camera, gyroscope, accelerometer etc), dynamic graphics running natively inside the browser without plugins, 3D content, faster real-time communication, more efficient processing of data in web applications and much more. This along with it’s sister technology CSS3 promises web developers capabilities to make applications much better looking without resorting to inefficient methods. Some exciting work is already being done in China to bring HTML5 based gaming in browsers, and in India people are particularly interested in offline applications and dynamic graphics. When we look into the future, we should also look at the devices being used to access the Web. Initially, we had desktops, then laptops, and now mobile phones and tablet devices. The next wave of devices to hit the Web would likely be televisions. Major television

manufacturers are moving to have browsers in their TV sets, and having HTML5 based TV Apps supported in their products. This is lucrative to media companies too, as it provides a more direct connection to the end-user. With the rising economy in India and China, there is a significant portion of the population buying a TV either for the first time, or replacing their old TV sets. The new ones would likely be higher-end ones, which support more than just basic television. Web on TV could very well be the next big thing, especially for markets like India and China. The introduction of 3G/4G services by network operators is a real wild card. Mass adoption of 3G/4G services would likely result in more usage by consumers and more revenue for operators as well as e-commerce. However, it all depends on the availability and affordability of 3G capable devices, quality of service and perceived value for money by customers for 3G/4G data plans and the quality and quantity of relevant value added services and online content. China and India have had hiccups with this, especially the latter, and it remains to be seen whether the nations will fully embrace the technologies or not. If so, it will mean a huge step in a region where a significant portion of the online population do not use wired connections, but still need fast internet access. The Web is already very significant today in India and China, and in the coming years will be even more so. It is up to the policy makers and industry of the respective nations to ensure that a faster, healthy and more vibrant Web keeps growing, so that it leads to

better sharing of knowledge, useful communication and increased spending online. New exciting technologies are coming up promising to revolutionize web applications, and might lead to a new class of web applications being used by all. In the end, the Web is bringing us all together, and with China and India being such a significant portion of world population, this can only mean a good thing. 

Shwetank Dixit works a Web Evangelist for Opera Software in India

July 2012  India-China Chronicle |41|

INFOCUS | INDIA-CHINA | SKILLS

Right-focusing the skill policy in india

Battle of the Bulge The urgency of focusing the skill policy is that it needs to be realized and implemented before the demographic dividend turns into a youth bulge. Shweta Sharma and Navneet Sharma

mongst the sources of competitiveness, skills have now assumed primary importance. The primacy of skills is embedded in a call for policy shift to achieve not just economic growth but attain socio-economic objectives through economic growth. Skill creation can be divided into four levels: minimally educated, vocationally skilled, college educated and highly skilled. It is important to recognize that, (a) all the four levels have different levels of populations in each strata and contributions to the economy, and (b) all the four together create a skillecosystem, which supports development and growth of a sector. |42| India-China Chronicle  July 2012

The magnitude of the challenge can be gauged from the fact that India will need to have 500 million skilled persons by 2020 and the total number will comprise of the following components of the skill pyramid: level one – 50 percent (minimally educated); level two – 25 percent (vocationally skilled); level three – 20 percent (college educated) and level four – 5 percent (highly skilled) [As per a report by IMaCS]. During the last five years, there has been sufficient debate and action on the need for skill building, however, its future direction requires some finetuning. A major policy response to address skill issues has been the creation of a three-tier institutional structure consisting of the Prime Minister’s National Council on Skill Develop-

ment, National Skill Development Coordination Board (NCDCB) and National Skill Development Corporation (NSDC) in 2008. The Prime Minister’s council has set a target to create 500 million skilled people by 2022 through skill systems. NSDC has already partnered with a large number of sectoral skill councils to encourage skill development on PPP basis. The policy response so far has attended the level 2 to a good extent, but there remain two principal aspects, which require urgent and careful consideration in order to achieve the overall policy objectives. Let us first highlight, through some statistics, an indicative status of jobreadiness of college graduates (level 3). As per Knowledge Commission of India & Nasscom, only 10% of graduates are employable. Similar survey indicates that about 20 to 23 percent engineering graduates and MBAs are fit for jobs as per the present education

system. Another report by Nasscom and McKinsey predicts that India will confront a huge shortage of skilled workers in the next decade, particularly in the BPO industry. According to the Nasscom-McKinsey report, only 25 percent of our engineering graduates, 15 percent of our finance and accounting professionals and 10 percent of professionals with any kind of degrees, in India, are suitable for working in multinational companies. A recent study conducted by the Confederation of Indian Industry (CII) has revealed that human resource is the biggest challenge faced by India especially at the managerial, production and marketing levels due to the widening demand-supply gap. Corporate India is creating around 10 lakh new jobs each year. If that is the demand over the next few years for job-ready graduates, one can imagine the humungous demand at middle and lower levels. In the current policy priorities, including the proposed approach in the 12th Five Year Plan, while levels 1 (minimally educated), 2 (vocational) and 4 (highly skilled) are receiving the required attention but level 3 remains hugely neglected. Importantly, level 3, which include graduates and post-graduates across all professional/ academic disciplines, are adequately

regulated by 17 regulatory authorities. However, the regulation has not yielded evenly high standards across the country, which is aptly reflected by various reports in terms of lack of employability of graduates as mentioned above. In view of the macro-economic challenges, presence of islands of excellence along with poorly performing institutions suggests that the policy challenge is to generally improve the standards of skill creation in 634 universities and 33,023 colleges of India (as per the latest statistics released by UGC: “Higher Education in India at a Glance, 2012”). It is worth clarifying that the case here is about striking a balance in the policy focus, and not neglecting the current policy focus on the minimally educated, vocational skills and highly skilled. Attention to all the four levels of skill chain is akin to coordination in an orchestra to create symphony. The second leg of the policy priorities relates with how to create skills at the third level of the skill pyramid. The Government of India has increased the number of institutions of national importance such as the IITs, IIMs, etc, which are perceived as islands of excellence, as a policy response. While increasing the number of IITs and IIMs is a welcome step, considering it a suffi-

cient step is grossly misplaced. In order to improve the general skill creation standards at college/ university level, a major initiative is needed in terms of (a) defining the target skills and embedding them in the curricula of a course, and (b) equipping the teachers in 634 universities and the 33,023 colleges to deliver the target skills. Primary research by the authors has revealed that most tertiary educational institutions have no express idea of the skills to be generated in a university level course, which corroborates with the above findings where one sees MBAs without the required management skills and engineers without the desired technical skills. Graduates are being produced with standard academic curricula with little or no regard to the skills desired by a market. This situation results in an additional burden either on the individual or the employer to become job-ready. Once the target skills are articulated, a policy initiative is needed to enable university/ college teachers to achieve the target of creating skills, which are demanded by a market. Here arises the question of training teachers in skill creation methodologies and pedagogies. In this context, the institutions of national importance such as the IITs and IIMs have a greater role to play as “catalysts” – i.e. producing good teachers who can create skills in their respective institutions. Graduates produced by institutions of national importance are nowhere close to the required numbers. Therefore, asking them to be catalysts will deliver much better outcomes than merely allowing them to produce a few hundred graduates each year. The urgency of rightfocusing the skill policy is that it needs to be realized and implemented before the demographic dividend turns into a youth bulge. 

Dr Shweta Sharma is UGC Post-doctoral Fellow. Dr Navneet Sharma is a policy researcher. Views are personal. Comments are welcome at: shwetansharma@gmail.com

July 2012  India-China Chronicle |43|

INFOCUS | INDIA-CHINA | CIVILISATION

The civilizaTional dialogue

Civilizational cross cultural currents between India and China went unhindered for two millennia. What went wrong and why we need to revive it. BR Deepak

n the repository of world civilizations, India and China are the two oldest and living civilizations, having carried out an intimate uninterrupted civilizational dialogue for over 2000 years. Both are neighbours having strikingly similar experiences, vast commonalities and complementarities. In such a long history of civilizational dialogue, the 1962 conflict could be termed as an aberration, yet it has cast a dark shadow on our relations for nearly half a century. The shadow of this ghost lingers on till date, as if the history of civilizational dialogue and the amalgamation of two cultures of India and China never existed! If we scan our micro and macro surroundings, can we find a match to such a civilizational interface in Asia, Europe or America whether in the antiquity or present? There is none for sure. Therefore, the history of civilizational dialogue between India and China is indeed unique in the comity of nations. So much so, the very names of these two nations, India and China known to the

|44| India-China Chronicle ď&#x201A;§ July 2012

Letâ&#x20AC;&#x2122;s retrace our footsteps

world today have their origin in Sanskrit, albeit in their own land they are known as Bharat and Zhongguo. This speaks volumes about the linkages between the two, and could be authenticated by going through the historical records of both the countries. Unfortunately, the civilizational discourse has lost its credence to the geopolitical paradigm, even if the latter has created wedges between the nations, unfolded many bloody wars, which have maimed, killed and rendered millions of people homeless, and even stateless! In view of this, it is pertinent that the civilizational dialogue between India and China is revisited, emulated and factored in while developing bilateral or multilateral relations. Leaders from both India and China have been emphasizing on India-China civilizational interactions every now and then during their state visits. However, not many people in India and China are familiar with the contents of such a dialogue besides a few academics on either side of the Himalayas. The geopolitics once again is the culprit to overshadow or throw the classical studies in India and China to oblivion. I believe this is the opportune time when both the countries are progressing well and could pool in resources for furthering the classical studies, and apply this civilizational dimension while seeking solution to many of its problems. It is in this context that this article reconstructs the endless flow of cross cultural currents between India and China. The great Chinese historian Si Maqian (BC 145-BC 90) records in his masterpiece Records of a Historianthat when he was in Bactria (around 123BC) he came to know from local merchants that they were procuring Chinese products such as Sichuan silk and bamboo walking sticks from Indian markets, thus establishing the fact that India and China were already having trade relations in the second century BC. This is also an indication of the existence of a trade route linking southwest China to the northeast of India, the route is sometimes also known as the Southern Silk Route. The famous Stillwell Road o the World War II vintage is part of this route and there are negotiations between our governments

that the route be revived and restored for better economic development of the region. Following Si Maqian, Ban Gu (32 AD-92 AD), another Chinese historian writes in his book Early Han Annals about the state of affairs in Jibin (Kashmir) state of India and its products like pearls, corals and lapis lazuli. The same book mentions about a sea route connecting southern India and China. Cultural and trade relations between India and China further developed during Tang (618-907), Song (960-1279) and Yuan (1279-1368) dynasties. By this time maritime activities were intense and it is reported in

local merchants were procuring chinese products such as sichuan silk and bamboo walking sticks from indian markets, thus establishing the fact that india and china were already having trade relations in the second century bc various sources that in Canton there were ships of Indians, Persians and Sri Lankan merchants. During the Ming Dynasty (1368-1644), Calicut and Cochin in India rose to prominence as new ports. References of other sea ports such as Mahabalipuram, Goa, Nagapattam, Quilon, Nicobar, Mumbai, Malabar, Calcutta and many more could be found in various Chinese literary sources. It was perhaps the spiritual linkage that transformed the relationship between India and China completely and took it to a new high. The earliest wave of scholar monks going from India to China perhaps started with Kashyapa Matanga and Dharamraksha reaching Luoyang in the first century AD, and continued till the end of the 3rd century. A monastery called the White Horse Monastery was built to accommodate them in Luoyang. In

May 2010 during her visit to China, Indian President Pratibha Patil inaugurated a Buddhist complex built with an Indian investment of 4 million US dollars next to this monastery. The second wave stretched between the 4th and the 5th century and the third between the 6th and 7th centuries. Of all the Indian scholar monks in China, Kumarajiva and Bodhidharma undoubtedly were the brightest of all. The former apart from being reduced as war booty for his brilliance and impeccable memory by the Chinese monarchs was also accorded the highest honor of >Rajyaguru< by emperor Yao Xing of the later Qin dynasty. Between the 2nd century and 13th century some 6000-7000 fascicles of Buddhist sutras were disseminated into China and translated into Chinese; Kumarajiva alone translated 74 scriptures in 384 fascicles. Bodhidharma, who went to China in 6th century, though not a great translator of sutras, is believed to be the founder of the Shaolin martial art in China. Shaolin monastery in Luoyang still reminds us of this great Indian cultural ambassador to China. On the other hand, Faxian (342424), Xuanzang (600-664) and Yijing (635-713) shine bright amongst the Chinese cultural ambassadors to India. Faxian was the first Chinese to travel to India in search of Buddhist sutras according to the records. His monumental work Accounts of a Buddhist Country narrates his experiences in India. Xuanzang and Yijing had certain advantages over Faxian, as both were patronized by Tang Emperor Taizong (626-649) and Empress Wu Zetian (690-704) respectively. Xuanzang and Yi Jing both studied at Nalanda and became proficient in Sanskrit. It is indeed heartening that the university where Chinese monks once studied is being rebuilt jointly by India, China, Japan and Singapore, and will offer courses in Buddhist studies besides other disciplines. The most remarkable section in >The Records of the Western Regions during Great Tang< by Xuanzang is in fascicle five of the book that narrates his encounter with Harshvardhana. Xuanzang narrated the state of affairs of China to the Indian King Harshavardhana. Harsha was so impressed that he sent an envoy July 2012 ď&#x201A;§ India-China Chronicle |45|

INFOCUS | INDIA-CHINA | CIVILISATION

to the Chinese capital Chang’an that reached the Tang court in 641 AD. The Chinese emperor Taizong responded positively and sent his envoy Wang Xuance to India. Xuanzang reached back in Chang’an in 645 at the age of 46 carrying 657 Buddhist Sutras from India. For the next 19 years, Xuanzang and his assistants systematically translated 73 Buddhist scriptures, 1335 fascicles in all, from Sanskrit to Chinese. Faxian on the other hand with the help of an Indian scholar monk Budhhabhdra translated 6 sutras with 63 fascicles including the Mahasangha Vinaya, for which he had carried out his journey to India. Owing to the material and spiritual linkages, India and China benefited immensely in the field of literature as also in science and technology. Indian stories, fables, art, drama and medicine reached China. During the Tang Dynasty, Chinese literary forms like Chuanqiwen (short stories or poetic drama) and bianwen (narrative literature with alternate prose and rhymed parts for recitation and singing) were greatly influenced by the Indian literary style manifested in Panchtantra and Jataka stories. Sugar manufacturing technology and its dissemination from India to China and vice versa is another example of the two-way traffic. Xin Tangshu (The New Tang Annals), Juan 221, part I, account on ‘Mojietuo’ (Magadha) tells us that in the 21st year of Zhenguan Era (647 AD), Emperor Taizong sent a mission to acquire the recipe of (crude) sugar-making from India. Afterwards, the recipe was followed in the Yangzhou workshop. The experiment came out successfully. The colour and taste of the sugar were much superior to the produce of India. Almost a thousand years later it disseminated back to India in the form of white granulated sugar (Cheeni) from China during the Ming dynasty. From Yuan and Ming dynasties onward until India and China launched their freedom struggles, cross cultural currents between them virtually went unnoticed. The interactions were interrupted by the drastic domestic changes and more importantly by the gradual eastward expansion of western colonialism. It is unfortunate that very few |46| India-China Chronicle  July 2012

people are aware of the mutual support and sympathy of the Indian and Chinese people during the colonial era. In this regard, I requested the Chinese Premier in person that in order to enhance mutual understanding between our two people, the civilizational interactions along with our glorious antiimperialist struggle must be included in the school text books of both countries. The anti-imperialist efflorescence of the Indian and Chinese people manifested in a major way as a challenge to the colonial order for the first time during the First War of Indian Independence (1857-59) in India and the Taiping Uprising (1850-1864) in China, as for the first time Indian sol-

general chiang kaishek

diers stationed in China switched over to the Taipings and fought shoulder to shoulder against the imperialists and the Qing government. Reports of Indian soldiers joining the Taiping fighters can be found in the memorials of the Qing dynasty army generals and other officials, and in the works of foreigners who were directly involved in this uprising. The memorials of Zeng Guofan (1811-72) and Li Hongzhang (18231901) are important. The documents compiled by the Nanjing Museum of the Heavenly Kingdom such as Taiping Tianguo Wenshu Huibian (Documents on the Taiping Heavenly Kingdom), Taiping Tianguo Shiliao Yicong (Materials on the Taiping Heavenly King-

dom—Translation Series), and Wu Xu dangan (Wu Xu’s Records), reveal enormous data on this heroic peasant movement, while also touching on the Indian involvement. Yet another invaluable source is Augustus Lindley’s book Ti-ping Tian-kwoh written in 1866 after his return to England from China. More details could be found in this authors article in Madhavi Thampi ed. (2005: 139-149) India and China in the Colonial World, Social Science Press, New Delhi. It was due to the synergy between the cultures and the plight of India and China that the nationalists and revolutionaries of India and China developed deep mutual contacts and friendship

amidst their anti-imperialist struggle. Indian nationalists such as Surendermohan Bose, Rash Behari Bose, MN Roy, Barakatullah, and Lala Lajpat Rai had forged very close association with Chinese nationalists such as Sun Yat-Sen and Zhang Taiyan, and had their active support whether in Japan or China. In China, the activities were mostly carried out by members of the Ghadr Party. The hubs of their activities were Hankou, Shanghai and Hong Kong. Their post Siam-Burma Plan activities find a link with the Kuomintang (KMT) and the Communist Party of China (CPC) alike. Ghadr support to the Chinese nationalist government and in turn enlisting latter’s support was the

direct outcome of the formation of First United Front in China between the KMT and CPC. Details could be found in this author’s article entitled “Revolutionary activities of Ghadr Party in China” in China Report 35 (4), pp439-456. This was also the time when Tagore visited China (1924). It undoubtedly was a great event in the history of China-India cultural relations. He rose to instant glory in China after winning the Nobel Prize for Literature in 1913. His advent and his lectures delivered in China impressed the Chinese people so much that his visit has been discussed time and again in the past 88 years. Tagore was showered with encomiums as well as criticism during his China visit. Chen Duxiu who first translated poems from Gitanjali was on the forefront of such attack and criticism. Notwithstanding the criticism Tagore left an indelible impression on some of the most prominent Chinese writers including Xu Zhimo, Bing Xin and Guo Moruo. His success in China could also be gauged through the translation of 189 collections of his poetry, drama, novels, and other works between 1921 and 1948, least to talk about research on Tagore after 1949. During the same period organizational links between the Indian National Congress and KMT were strengthened. The Brussels Congress against imperialism in February 1927 is the testimony, when Nehru had extensive exchange with the 16 member strong Chinese delegation led by Liao Huanxing. Some of the points which were negotiated and agreed upon include: China should open an Information Bureau in India in order to organize an efficient and regular service of information between the two countries. Till its establishment the information on China may flow through China’s London Bureau to be passed on to the Indian media and nationalist organizations operating there; a Chinese representative to be stationed in India; mutual visits of the representatives to be arranged. Some Chinese representatives may attend the annual session of the Indian National Congress on invitation; the exchange programme also included visits of trade unions from both sides. The Chinese delegates were July 2012  India-China Chronicle |47|

INFOCUS | INDIA-CHINA | CIVILISATION

keen on some Indian students coming to China for studies, develop, and establish contacts with the Chinese people and their national movement. It was also agreed that India would continue to press the British to withdraw Indian forces from China and not to use them against the Chinese people. Taking these agreements as foundations, the Indian and Chinese delegates issued a joint manifesto and emphasized the resolve of India and China in their anti-imperialist struggle. It is unfortunate that the flow of information between the two nations even today is not to the expected levels, we may know a lot about our western counterparts but very little about ours neighbours including China. During the War of Resistance and the Second World War, so long as China suffered at the hands of the Japanese, the reverberations were felt in India too. India dispatched a medical mission to China in 1938 to help them in their War of Resistance. Dr Kotnis, one of the doctors of this mission died in China while serving the wounded soldiers of the Eighth Route Army and other Chinese people. Nehru made the bonds of friendship even stronger when he visited China in 1939. The fruits of the 1927 interaction were further consolidated. President Chiang Kai-Shek visited India in 1940 specially to break the deadlock between the British and the Congress, and met Gandhi. This was also the period when China studies gathered momentum at Tagore’s Shantiniketan under the stewardship of Prof Tan Yunshan. China and Sino-Indian studies in India took a shape and flight only after Tan joined forces with Tagore and especially after the establishment of Cheena Bhavan (1937), Tan left no stone unturned, collected huge amount of funds and bibliographical sources in China and Southeast Asian countries through his personal connections. In order to strengthen the India-China studies, he also invited many Chinese scholars and teachers to Shantiniketan, who dedicated themselves to teaching and research on Sino-Indian cultural studies, and also published a periodical, Sino-Indian Studies to disseminate the research work of the scholars. Tan acted as a bridge between the Chinese |48| India-China Chronicle  July 2012

HEALTH | INDIA-CHINA | INFOCUS

and Indian scholarship as he wrote prolifically not only in Indian newspapers, journals and media but also in leading research journals of China that time including the Eastern Miscellany (Dongfang Zazhi), thus introducing the Indian freedom movement and its leadership to the Chinese people, and at the same time sensitizing the Indian mind about the situation in China, particularly the War of Resistance against Japan (1937-45) and influencing Indian thinking of many leading personalities about China. In retrospect, the civilizational cross cultural currents between India and China went unhindered for two mil-

various historic personages including kumarajiva, Xuanzang, tagore, tan yunshan, ji Xianlin and many others that facilitated such a dialogue between india and china, had tremendous faith in the indian and chinese civilizations and had visualized the vitality of the oriental culture lennia. Especially the colonial period was the period when both the people of India and China rendered support and sympathy to each other in their common struggle. It was Nehru’s vision that in future India and China would necessarily come nearer to each other for the vast and tremendous potentials of economic cooperation in a New World after the War. India was the first country in non-communist block to recognize China and establish diplomatic relations. It is unfortunate that both India and China did not handle their relations well in the 1950s due to various misconceptions and misunderstandings. We cannot blame geopolitics and the Cold War, which itself was the product of the former. Miscon-

ceptions have bred mistrust, rivalry; destabilized the nations, and pushed them into deeper economic crisis. The military retaliations by the US and the subsequent war on terror, far from solving the problem has aggravated it, and sowed the seeds for even greater calamities. The US invasion of Iraq and Afghanistan rendered a million people dead. Even though Osama bin Laden has been killed, the war on terrorism is far from over; Muslim countries in the Middle East and Asia have been radicalized or Talibanized and the forces of Islamic fundamentalism strengthened in these countries. The only way out in conflict resolution perhaps is dialogue rather civilizational, not the military solution that originates from the dangerous thesis of the clash of civilizations. Therefore, rather than geo-politics, the need of the hour is geo-civilizational dialogue and discourse that would help us to understand the people of other nations in a better way and sensitize ourselves towards others’ sensitivities. This is the only way through which trust can be built. Various historic personages including Kumarajiva, Xuanzang, Tagore, Tan Yunshan, Ji Xianlin and many others that facilitated such a dialogue between India and China, had tremendous faith in the Indian and Chinese civilizations and had visualized the vitality of the Oriental culture. Prof Ji Xianlin, doyen of Indian studies in China, has even prophesied that the twenty-first century would be the century of the Oriental culture. According to Ji Xianlin, it would become the world’s leading culture and would take human and cultural development to a higher level. Obviously, India and China has to work together to turn the vision of these personages into reality. Can they do it, and thus pave the way for a firmer hand shake across the Himalayas? 

icec’s china india healThcare conference and china india Yoga summiT in guangzhou

Mind over matter

ast year, in June 2011, the China India Yoga Summit was held in Guangzhou with the lead taken by India’s Consul General’s Office and was directed by Mr Zhiyong Chen. ICEC Council’s representatives in Guangzhou and Shenzhen joined the event as observers. Significantly it was graced by the 93-year-old yoga guru Yogacharya BKS Aiyangar and a 117-year-old Shaolin master Lu Zijian. Both renowned masters practice their art for hours even at this age. After a lifetime exploring links between body, mind and spirit, they are sharp and agile enough to teach youngsters one-third their age lessons on how to stay not just fit but keep their equipoise. In June 2011, both came together at an ambitious China-India Yoga Summit held in Guangzhou. The agenda was a dialogue on the traditional fitness regimens of the two countries. Iyengar led a packed, three-

day programme of guiding thousands of yoga enthusiasts from China and abroad on the many inter-connecting layers of the system along with senior Iyengar teacher Birju Mehta. Before leaving for China, Yogacharya, who has always been generously allowing beginners and veterans to attend his classes, said, ‘‘I will go from the scratch to the ultimate.’’ Yoga reached China around 40 years ago and caught on like wild fire despite the fact that the country has its own indigenous systems of mind-body regimens. There are about 15 million

yoga practitioners in China today. Chen observed that “Tai Chi is now not as popular as yoga in China. Yoga is definitely more popular among the educated youth, especially women—95% of learners are women.” Ayush Department of the Ministry of Health of India supported the event. Master Lu Zijian, who is fondly referred to as the Yangtze River’s Great Chivalrous Man, lives in Chongqin and practices the evolved Tao-based martial art and healing system, bagua zhang. With help from interpreters, the two masters compared Tai Chi and yoga, its principles and similarities, how they look at the human body, mind and spirit, and how they work to improve them. ICEC Council will join the Consul General’s Office and Ayush for the China India Yoga Summit and further co-sponsor a similar event in Guangzhou and follow it up with the China India Healthcare Conference, CIHC 2012. 

Dr BR Deepak is Associate Professor of Chinese at Jawaharlal Nehru University in Delhi

July 2012  India-China Chronicle |49|

INDIA-CHINA IT | TOURISM INFOCUS | CHINA-INDIA SECTOR | REPORT

Text and Photos: Prashun Bhaumik

CHENGDU CALLING

The Indian government may be following an aggressive Look East Policy but what the people of India need to do is indulge in a visit east policy and there can be no place better to begin than Chengdu in China’s sensual Sichuan province in the south; then onto Guilin and ending in paradise Yangshuo.

ir China connects Mumbai and Bangalore to Chengdu, capital of Sichuan. The flight from Mumbai takes four-and-a-half hours and lands you in time for a sumptuous Chinese meal to begin your day. On a recent FAM tour organised by CNTO, we were however driven straight to Chengdu’s only Indian restaurant, Tandoor, much to the delight of my cotravellers. But for those adventurous travellers Sichuan offers a cuisine very different from your idea of Chinese, except for the popular Kung Pao chicken. It is simply great food with an amazing variety– and a blend of the delicate and hot spices! Shaolin Monastry

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INFOCUS | INDIA-CHINA | TOURISM

Meishan and take a break before you ascend Mount Emei the next morning. At night take a stroll down and you will come across lively eating places and pubs well into the night, with young boys and girls crooning at tables, families having fun, young men playing cards or a father and daughter sharing a drink over a full steamed cod fish. It’s simply brilliant – the unending assortement of foods, some queer some audacious, a general air of fun and frolic. I’ve never had so many people come up and pose with me for photographs. Mothers brought their little kids to pose with me – I’m sure I didn’t look like an alien. It was a warm feeling. And I never had so many women – both young and old – surrounding my table while I downed a bottle of beer. This mini carnival of lights, song and cheer is a regular night. I could go on all night and feast (already had dinner at the hotel before venturing) on some Ox tripe, frogs or maybe pig’s tongue. Ah! Next time. Next morning was the drive up to Mount Emei through wooded forests and bending roads till you reached the Leshan Buddha

In Prayer |52| India-China Chronicle  July 2012

On way to Longji (top); Eating houses in Longji Terrace (bottom)

Once in Chengdu head straight for the majestic Emei Mountain after having parked yourself at a traveller’s lodge in a forested surrounding. On way to Emei a detour will take you to Leshan where stands the tallest Buddha in the world carved out of a mountain, the only of its kind after the destruction of the Bamiyan Buddhas in Afghanistan. You could climb to the head of the Buddha or marvel at its giant toes where according to our young guide Alex you could host a party. The Giant Buddha of Leshan, carved out of a hillside in the 8th century looks down on the confluence of three rivers. A ferry ride down the river gives you breathtaking views of the Buddha, sitting in a rather pensive mood. At 71m high, the Leshan Buddha is just a metre short of the Qutb Minar in Delhi and can be seen for miles. In fact legend has it that the confluence of the three rivers was a danger for early sailors but after the Buddha was built in the 8th century it has given safe passage to sailors. After the Leshan Buddha reach July 2012  India-China Chronicle |53|

INFOCUS | INDIA-CHINA | TOURISM

Playful Pandas

Titanic on Li River

Looking for tribes

|54| India-China Chronicle  July 2012

cable car to take you to the summit. As you climb up the more than 3000 mhigh-mountain, the air gets nippy; but you can rent jackets at the cable car station if the weather gets nasty. Where the cable car drops you, you suddenly find yourself placed over a bed of clouds swirling the mountains from which rises the majestic and beautiful golden statue of the Bodhisattva or Samantabhadra also known as the Lord of the Truth. Known in Chinese as Puxian ( ) he is the patron Bodhisattva of Mount Emei and represents the practice and meditation of all Buddhas. Samantabhadra forms the

Elephant Trunk Hill

Shakyamuni trinity in Mahayana Buddhism together with Shakyamuni and fellow disciple Manjusri. Mt Emei is one of four sacred Buddhist mountains in China and the highest. Cloaked in cloud, mist and chants of Buddhist shlokas, it is an unforgettable spiritual experience. Despite the hundreds of tourists, mainly Chinese, who go about offering prayers, burning incense, completing parikramas or simply gawking, one can lose onself in some strange solitude. Before heading back to Chengdu and taking off for

gorgeous Guilin, don’t forget to head for the Panda Reserve. Especially if you’re with kids, it could be the time of their lives watching the cuddly soft animals feed on bamboo and play with one another. The Giant Panda, or the panda bear, is a creature so mysterious that its reputation is beginning to take on a mythical status. One of the few large animals that do not fall anywhere in the normal food chain, the Giant Panda is neither a predator nor a prey. Surviving solely on the swift growing bamboo, a self-generating plant, the Giant

Panda has no ecological influence on the habitat it thrives in, making its value to the world somewhat dubious. Complicating this is the fact that the Panda is one of the most endangered large animals out there, and the protection and upkeep of this unique creature is an expensive and exhausting process. On our visit to the Chengdu

Li River Cruise July 2012  India-China Chronicle |55|

INFOCUS | INDIA-CHINA | TOURISM

Panda Reserve we were able to see a rare glimpse of the Giant Panda. The Chengdu Panda Center is, quite literally, the world’s largest giant and red panda reserve. The center’s main purpose is to educate visitors as well as breed, raise, and protect the endangered and huggable Giant Panda. If any place deserves the distinction as a national treasure, the breeding center would be it. In fact, the entry ticket goes on to say that it is the “Charm of China, Cradle of Pandas.” After a hike around the park, it is easy to see why. Hunted historically for its pelt, and with its natural habitat of bamboo forests declining swiftly, there are only about a 1000 Pandas left in the wild. While there has been a great support for the preservation of the Panda, both in China and internationally, the valiant efforts are not seeing enough results in an increase in the Panda population. With support and more research, it is hoped that the steady decline in Pandas |56| India-China Chronicle  July 2012

will slowly reverse itself, for it would be a terrible shame to lose these striking and gentle bears. There are some small shops in the reserve selling a whole host of Panda souvenirs. But then anywhere you go in Chengdu there is no dearth of Pandas (soft toys that is).

The flight to Guilin from Chengdu is less than two hours, much like DelhiMumbai. If you take an evening flight you can check into a hotel and prepare yourself for a hike up to the Longji terraced hills the next morning. A two-hour drive from Guilin, takes you to the Longsheng region, home to some of China’s many ethnic minorities. The terraced hillsides offer an amazing sight because for centuries local communities have grown rice on these hillsides with a simple yet efficient terracing and watering system. Another attraction is the people who you keep bumping on your climb up and down. The area is home to a large number of minorities such as the Dong, Zhuang, Yao and Miao who still preserve their way of life. The climb can be steep but it’s worth it. Else you can avail ‘human’ taxis that will cart you up if you’re okay with the idea

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INFOCUS | INDIA-CHINA | TOURISM

A Lasting Impression

The light drizzle did not dampen or distract. The crowd was a swathe of shimmering opaqueness huddled and hooded in polythene raincoats handed out at the entrance. The stage was the magnificent Li River and its surrounding mountains lit up mysteriously with white light against the black waters of the Li in the night. A shaft of yellow light cuts through the dark and reveals a boat even as the night air is filled

with a strong resonant voice of the singer as a speck on the gliding boat. Welcome to Impression Liu Sanjie, an amazing 70 minutes of song, lights, music and choreography that leaves a lasting impression. And the master behind the magic is Zhang Yimou, the man who impressed the world with his first cinematic offering, Red Sorgum and went on to enthrall the world with the dazzling shows that opened and

much like the service offered in most of our places of pilgrimage that sit on mountain tops. On the way down you can stop at the excellent Meiyou restaurant which literally means “This is no restaurant.” The food is excellent and don’t forget to try the chicken in a bamboo. Running for over 30 years the place proudly proclaims that it does not serve warm beer, rip-offs or offer bad service. On the way down, one ran into an Indian couple with two kids from Pune – one 12, the girl 9: An unusual sight; goes to show that more and more Indains are venturing out to discover gems closer home. All along the climb are numerous stalls selling all kinds of curios, jewellery, ethnic wear. Be ready for some aggressive selling and heavy bargaining. You’ll be lucky if you can catch some glimpse of the tribe whose women don’t cut their hair; some growing long enough to sweep the floor. Back to Guilin catch the Mirage Guilin show in the city which will transport you to an hour of lights, music and acrobatic delight – little wonder this country leads world gymnastics. Get ready for the most unforget-

closed the Beijing Olympics in 2008. A cinematographer by training Zhang Yimou’s films are a visual treat and the offering in China’s southern and charming town of Guilin only reaffirms his power over his medium. To borrow Steven Spielberg’s words used to describe Zhang Yimou’s Olympic ceremonies in 2008 – “In one evening of visual and emotional splendor, he educated, enlightened, and entertained

us all.” Yes even at Yangshuo he does. Designed three years before he went on to direct the Beijing Olympics opening and closing ceremonies, Zhang Yimou in Impressions uses a lot of folk idiom and a riots of colours and music to tell the simple story of peoples daily lives enmeshed with the love story of a local minority Zhuang girl and her lover. Broken into four segments according to the over-riding colours used, Zhang Yimou creates a visual effect on a scale few can imagine. Six hundred performers which include buffaloes,

cormorants, local fishermen gliding across the river seamlessly creating blazing sunrises, burning ripples of the sun rays kissing the water with the use of long sheaths of red cloth that are used beautifully by actors floating on bamboo rafts. Simply a visual delight, difficult to put into words! The other favourite was at the very end where all these Zhuang girls dressed up in traditional silver costumes that light up. They all (over 200) string together on water and the silver on their costumes reflect all the light to

make each person sparkle... and they use the lights to create a light show. It’s really neat and nicely choreographed. The entire show was very “Opening Ceremonyish.” Lots of synchronized simple movements but all climaxing together to create an impressive and unforgettable show! Guess that’s why Zhang Yimou was put in charge of the Olympics. I would highly recommend this show if you are in Yangshuo. In fact it is good reason to visit Guilin. Prashun Bhaumik

table day of your life – beginning with the amazing cruise down the impressionable Li River, spending the day in charming Yangshuo and ending it with the greatest show choreographed by one of the greatest directors of our time – Zhang Yimou. The day cruise flags off at 8 in the morning and takes about four hours to reach Yangshuo, twisiting and turning thorugh lush fields and a crazy array of mountains with crazy shapes. You can spend your hours in the comforts of the main AC cabin, drinking beer or sipping the exotic snake wine (on your expense) but you will prefer to enjoy the open-air viewing platform as the scenery takes your breath away. There is an interesting buffet lunch served which is cooked on the boat with local favourites and fresh catches from the Li River. This cruise along the Li River is a photographer’s dream and you’ll want to capture the dramatic landscapes that Chinese artists have been painting for centuries. Your destination is the village of Yangshuo, where you’ll disembark and stroll amid the colourful, bustling marketplace of local street vendors.

Popularly known as the West Street, it offers all kinds of interesting stuff at a bargain. But keep off the men who persist on slipping you some fake Rolex watches which our effervescent tour guide Liu warned would stop before you reached the airport. But later that night was reason enough to brave the drizzle and watch one of the most magnificent spectacles in light and sound unfold over the Li River with the brooding mountains as a backdrop. Impression Liu Sanjie shows the mastery of Zhang Yimou on his medium and flashes of his cinematic brilliance as 600 performers glide in and out of the frame which is ON the river and propped by many karst mountains which are lit up. Thanks to the Chinese master of film arts Zhang Yimou skillfully combines Guangxi minority customs and the legends of Sanjie Liu with Guilin’s charming landscapes. Impression Sanjie Liu (produced 2005) quickly swept the world and has become the most successful and influential tourism performance at home and abroad. Hungover by Impression the day after, it took the fascinating Karst

caves of Reed Flute Cave to shake it off. Karst caves are limestone caves formed over millions of years and a walk through the caves transports you to another world. No wonder Guilin is known as one of the most beautiful places under heaven for its dramatic Karst hills, fantastic caves and limpid waters. It inspired a famous Chinese writer to pen – “The river winds like a green silk ribbon, while the hills rise like jade hairpins. It is time to say goodbye to gorgeous Guilin and head back to Chengdu for a final day of shopping and catching up on some street life. But before you take the flight back be adventurous and take a shot at Chengdu’s famous Hot Pot – a dish where you sit across a pot of boiling soup in the middle of your table and pick your raw ingredients (meats, veggies etc) to throw into the boil and relish a great dish. Not to be missed even though the locals warn you that the spices will make your eyes water. But what the hell we’re Indians! As you take the flight out of Chengdu, Guilin and Yangshuo will tug at your heart strings for a long, long time. Till you return. 

Karst Caves |58| India-China Chronicle  July 2012

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INFOCUS | INDIA-CHINA | TRADE

Remove NoN-TaRiff BaRRieRs

Open up Nathu La again Even though India-China trade is on the upswing, many measures need to be taken to balance both sides. M Absar Alam

he Shanghai Cooperation Organization (SCO) annual summit was held in the first week of June 2012 in Beijing. During this meeting, External Affairs Minister SM Krishna reasserted India’s willingness to engage closely with China. The SCO is an inter-governmental security organisation with six members – China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan set up with the objective to facilitate security and military collaboration as well as economic cooperation with member countries. The minister during the summit stated that “India attaches the utmost importance and high priority in our foreign policy formulations and our |60| India-China Chronicle  July 2012

cooperative partnership with China.” New Delhi’s desire to continue economic relations with Beijing has been clearly addressed on this occasion as in the past. The statement came just after Prime Minister Manmohan Singh’s visit to Myanmar where he also mooted that Myanmar could play the role of an economic bridge between India and China. India’s economic engagement with China has recently been witnessing progress towards exploring the diversification of India’s export basket. Looking at the potential of India’s exports to China, there have been some recent changes in the bilateral engagement which indicate the foundation of future progress. China accepting the import of Basmati rice from India is notable along with the inclusion of Indian carpets as one of the identified sectors

among the small and medium scale products in the Chinese market. Both countries are striving hard to enhance their international trading position and the current bilateral trade stands at US$ 74 billion, of which China has a trade surplus of US$ 24 billion. With this concern, steps were taken to explore various opportunities in the Chinese market which would offset the trade deficit which is unfavourable to India. In addition to the above, India’s Foreign Minister once again stressed on the balanced trade progress between the two nations. Moreover, India has also spoken about its desire to join the SCO owing to its geo-economic importance in the Central Asian region. A meeting between India and China was also held in Tawang to maintain peace along the bordering areas. The question is how the normalisation of Indo-China relations could benefit India’s export basket. The answer can be seen through the recent

export composition of India to China. China during the modern era has become a manufacturing hub and therefore it sources raw materials from India for its manufacturing industries. The composition of India’s export to China has been predominantly iron ore. India’s top four export commodities to China include ore, slag and ash; copper and its products; cotton; and iron and steel accounting for 69 per cent of India’s bilateral export basket during 2010-11. India’s share of ores export to China was around 67 per cent in the financial year 2006 which came down to 27 per cent in the financial year 2011. Similarly, India’s share of iron and steel export to China was almost 11 per cent in 2004-05 which reduced to around 5.6 per cent in 2010-11. In addition, cotton, copper and its products, precious stones and metals, electrical and electronic equipments, vegetables, chemicals and products from other small and medium scale industries like the carpet industry has the potential to reach the Chinese market. Pharmaceutical is another important commodity in which India has a comparative advantage. India’s global pharmaceutical exports accounted for approximately US$ 6.5 billion in 201011. More trade in such commodities could reduce the bilateral trade imbalance and make the business environment more conducive. The potential of high value products from India to China is not able to reach its mark due to the presence of Non-Tariff Barriers (NTBs). The focus should be to increase the export of high value products through which the increasing trade imbalance could be managed. These products include machinery parts, auto parts, consumer durables, food items and textile products, among others. NTBs are one of the greater concerns of trade with China and it also impedes exports from India to China. These barriers are mainly in terms of a lack of transparency in customs and quality control mechanisms. It is therefore, essential to simplify the procedural aspect of imports from India which has elements of NTBs. Similarly, the issue of anti-dumping measures are also a matter of apprehension from the Indian point of view in

For India-China trade, many measures need to be taken to balance both sides

the context of the rising trade imbalance. In fact, India has filed 149 complaints against the Chinese anti-dumping policy. This is almost 50 per cent of the total anti-dumping complaints made by India against foreign countries. Thus, to create avenues for Indian exporters in China as well as to attain India’s export, the issue of NTBs needs to be revisited and resolved. In future, India’s economic relations with China are expected to improve. But this has to be based on an improved business climate not only conducive to exports of Indian products to China but also favourable to investment opportunities in both the countries. Such measures from the Chinese side would also increase avenues for investment opportunities in India as India expects Chinese investment in various sectors like steel equipment, infrastructure, telecommunications and roads, among others. Despite the gloomy market in Europe, Chinese investment in India

has increased by more than US$ 100 million last year. On the other hand Indian entrepreneurs are keen to make investments in the Chinese service sector particularly in information technology (IT), bio-technology, solar power and food processing sectors. As per the Columbia University report 2010, India has become the 21st largest country in the world for outward investment. In addition, both countries need to focus on institutionalizing business-tobusiness (B2B) interactions under their respective chambers of commerce. It is essential for the two neighbours to explore land routes such as the Nathu La Pass as a customs station for trade between the two countries and increasing the list of commodities for cross border trade through land routes. This border point was a significant trading post before 1962 when it was closed. The point had a share of around 80 per cent of Indo-China trade which is negligible now. The possibilities of use of land transport too can emerge between the two countries through both bilateral and multilateral engagements. The Bangladesh, China, India and Myanmar (BCIM) congregation may be another platform through which connectivity between the two countries could be made possible. 

Absar Alam is Research Fellow with Asian Institute of Transport Development, New Delhi

July 2012  India-China Chronicle |61|

Shows

Exhibitions&Trade

DATE

VENUE

EVENT PROFILE

China International Resources Recycling Industry Exhibition

06 - 07 Sept 2012

Shanghai New International Expo Centre(SNIEC) Shanghai, China

China International Resources Recycling Industry Exhibition Cbi (shanghai) Co., Limited (CIRR) covers metal recycling and plastic recycling industries. Mr. Lillian Li The exhibition welcomes market players home and abroad, Tel: +86-21-51550820 especially those emerging market which shows interest in Chinese partners

China International Health Expo

14 - 16 Sept 2012

National Agriculture Exhibition Center Beijing, China

This expo provides an effective exchange platform for both Reed Sinopharm Exhibitions Co. international and local enterprises seeking to expand their Limited ( Reed Sinopharm) market, develop international cooperation, display & sale Tel: +(86)-(10)-84556677 products, promoting their brand image and upgrading international reputations. It is the unique event specifically focused on natural healthcare products in China.

Shanghai Textile & Apparel Trade Fair

19 - 21 Sept 2012

ShanghaiMart Shanghai, China

Shanghai Textile & Apparel Trade Fair is the unique event Shanghaimart which offers high class assortment of textile and apparel. Mr. Daniel Chong More than 800 exhibitor will participating in the trade show. Tel: +86-21-23255281 This is the 9th edition of the event which will be taking place between 19 to 21 Sep 2012 at the Shanghai Mart Exhibition Hall

China Plastics Exhibition & Conference

22 - 25 Sept 2012

Taizhou International Convention & Exhibition Center

Taizhou's Plastic Consumption Leads China In 2008, the plastic consumption of Taizhou was more than 4 million metric tons which takes nearly 10% of total consumption in China. Kingdom of Plastic Products Taizhou is the largest Production Base of Plastic Products in China with the most abundant products and lowest price.

Taizhou International Convention & Exhibition Center Mr. Martin zhao Tel: +86-576-82531122

China International Creative Industry Exhibition Zhengzhou

30 Sept - 03 Oct 2012

Zhengzhou International Convention & Exhibition Center Zhengzhou, China

The China International Creative Industry Exhibition, Zhengzhou will be organized in Zhenghou. The show will be held for four days. This event will focus on promoting extensive communication and cooperation between China and abroad creative industries. This is one of the most professional creative industry events which will provide a professional trading platform for the creative industries

Henan Province Development and Reform Commission Mr. Coral Shan Tel: +86-371-86010088

China International Forum And Expo On Coal Industry Chinese

10 - 12 Oct 2012

National Agricultural Exhibition Center (NAEC) Beijing, China

China International Forum and Expo on Coal Industry has National Energy Administration been highly participated by domestic large coal production Event Manager thenterprises which is the typical feature differs from other Tel: +86-10-64463993,6446303 coal shows in China. During the show 2010, there were 20 largest Chinese coal production enterprises participated

China International Motorcycle Trade Exhibition

11 - 14 Oct 2012 Chongqing International Convention & Exhibition Center Chongqing, China

The China International Motorcycle Trade Exhibition is the largest motorcycle exhibition in China. It is the most important trade platform for motorcycles as mode of transportation in the world. It is the best channel to enter into Chinese market for leisure motorcycles and the related products. It is the annual gathering and carnival for Chinese motorcycle riders and enthusiasts.

China Wind Power

16 - 18 Oct 2012

China International Wind Power Expo is a major event for Global Wind Energy Council wind power industry. It is a show that is meant to set stage for Event Manager major expansion policies in the Chinese wind power market. Tel: +86-10-68452055 The event provides common grounds for key stake holders to meet collaborate and exchange new ideas and practices in the field of wind energy

Electronics Manufacturing Exhibition

18 - 21 Oct 2012 Suzhou International Expo Center Suzhou, China

The Electronics Manufacturing Exhibition China has developed Bridge Exhibition Services (BES) itself as China's biggest domestic IT exhibition, attracting the Ms. Sun Yong world's top IT enterprises in an area covering over 40,000sqm. Tel: +86-755-25194884 Coinciding with eMEX are a number of forums and seminars, giving global industry experts and companies the opportunity to discuss and present the latest topics in the industry.

In India • In China

EXHIBITION

DATE

VENUE

EVENT PROFILE

CONTACT PERSON

Delhi Book & Stationary Fair

01- 09 SEP-12

Pragati Maidan, New Delhi, Delhi, India

Delhi Book & Stationary Fair, aimed at highlighting the capabilities of Indian publishing industry, introducing new publications and promoting reading habits among the younger generation.

India Trade Promotion Organization Event Manager Tel: +91-11-23371540

India Oil and Gas Review Summit and International Exhibition

06- 07 SEP-12

Taj Lands’ End Mumbai, Mumbai, Maharashtra, India

The India Oil and Gas Review Summit and International Exhibition is 2 days event which has entered into its 18th edition and is targeted to domestic & international oil & gas industry. It is an exclusive event which covers the entire petroleum industry and proves to be vital in exploring various related industries.

Oil Asia Publications Pvt. Ltd Mr. S.M.Singh Gandhi Tel: +91-22-40504900

Hindusthan Fashion Fair

08 - 09 Sep 2012 Kolkata City Center Kolkata, India

This fair claims to be the most comprehensive platform for fashion Fiesta Times and lifestyle industry. It will be hosted in Kolkata for two days and will Mr. Sumit Harlalka present the entire spectrum of products and services related to personal Tel: +91-33-32216832 fashion as well as home decoration.

Automation Asia

14 - 17 Sep 2012 Pragati Maidan New Delhi, India

Automation Asia promises to showcase the latest and best in industrial automation solutions covering all the aspects of - factory, industrial building & process automation - for industrial manufacturing as well as engineering & maintenance services from individual components to complete automation solutions

Triune Exhibitors Private Limited Event Manager Tel: +91-80-43307474

Indian Pharma Expo

22 - 23 Sep 2012 Pragati Maidan New Delhi, India

Indian Pharma Expo 2012 is the perfect solution to meet the needs of the rapidly growing Indian pharma industry; to be able to network under one roof.

UBM India Pvt. Ltd. Mr. Ashwini Lokhande Tel: +022-2-66122660

India Nuclear Energy

25 - 27 Sep 2012 Bombay Exhibition Center(BEC) Mumbai, India

The Indian nuclear power industry is imperative to bring the Indian know-how and resources together with global nuclear skills and experience to introduce a new dimension to the upcoming nuclear power projects.

UBM India Pvt. Ltd. Mr. Akash Damani Tel: 91-22-66122648

Conference Of The 29 Sep 01 Oct Association Of 2012 Nuclear Medicine Physicians Of India

India Habitat Centre The ANMPI scientific program will feature a full spectrum of educational New Delhi, India opportunities ranging from continuing education to cutting-edge presentations of new and original scientific researches. We plan to have interactive sessions and case based reviews led by both clinicians and nuclear medicine physicians which will reflect the multidisciplinary nature of our field

Attitude Events Private Limited Ms. Nishtha Bindal Tel: +91-124-4969838

Metro Rail Asia

Hotel ShangriLa New Delhi, India

Metro Rail conference & Exhibition Asia is proud to present Metro Rail Asia 2012, a conference dedicated to metro developments in India and where global metro rail professionals meet, network and do business with the Indian metro operators

Terrapinn Pte Limited Mr. Sophia Ku Tel: +91-65-63222720

India International 11 - 13 Oct 2012 Chennai Trade Yarn & Fabric Show Centre Chennai, India

India International Yarn and Fabric Show provides a great platform for interaction and rich communication among the important industrial heads and decision makers who look at all the recent advancements made by their line of work along with the numerous issues that keep marring their further progress.

Conference & Exhibition Management Services Limited (CEMS USA) Mr. SHAHID SARWAR Tel: ++1-212-6344833

09 - 11 Oct 2012

EXHIBITION

New China International Exhibition Center Beijing, China

CONTACT PERSON

China Council For the Promotion of International Trade Mr. Fen LIU Tel: +86-23-68886115

10 Cii Uttarakhand Fair

18 - 22 Oct 2012 Dehradun Parade Ground Dehradun, India

The fair offers a spectacular platform to present your products and services to thousands of consumers in & around Dehradun. Apart from showcasing the latest products and services to potential buyers, CII Uttarakhand Fair is an opportunity for the International exhibitor to.

Confederation Of Indian Industry, Northern Region Event Manager Tel: +91-135-2745120

China International Special Steel Industry Exhibition

20 - 23 Oct 2012 Shanghai World Expo Theme Pavilion Shanghai, China

Shanghai international exhibition hall China Council For The Promotion Of International Trade CCPIT Special Steel Enterprises Association of China (SSEAC) Organizer: Liaoning Metal Advertisement Design Centre The Organizing Office of Special Steel Enterprises Association Of China

China International Special Steel Industry Exhibition Mr. Dona Du Tel: +0086-411-6663494

11 Mega Diwali Show

30 - 30 Oct 2012 Blue Sea Mumbai, India

The club is a unique and popular-one day event for new trends in Jewellery, Fashion,Beauty,Luxury lifestyle products etc. 30th october, 2012 coincides with the Navratri and Diwali festival so exhibitors get a perfect opportunity to come in direct contact with consumers,retailers and whole sellers.

Futuristic Expo Tel: +(91)-(22)-26483101

Biotec China

31 Oct - 02 Nov 2012

Biotec China is a high profile exhibition dedicated to biomass energy that is scheduled to take place in the city of Shanghai in China over three days amidst networking sessions and interactive discussions.

Adsale Exhibition Services Limited Mr. Maggie Han Tel: +86-21-51879766

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Shanghai World Expo Exhibition And Convention Center Shanghai, China

July 2012  India-China Chronicle |63|

MISSING PIECES

Lessons to learn

t is true that trade between two nations builds strong foundations of friendship. Everyone who follows India and China keep saying that China has a favourable balance of trade vis-a-vis India. China exports more to India as compared to what India exports to China. Look the other way – I believe, it is India which imports more from China (rather than what China wants to export to India) for its needs, economists call it the law of demand and supply! Also what India exports to China, is actually what China wants to buy from India, for its needs. It’s not what India should export (value added goods). How did this come to happen? How can then India export to China what India should want to export in terms of total value and products? Actually, everything! Because even today China imports almost everything from ‘pin to plane’ as their domestic production cannot fulfill the domestic demand because the focus of Chinese production is exports. Then why is India not able to export more to China? Industry says that they face competition from Chinese businesses and products in international markets, so how can they export to China? Is this not what many countries say for India too? But India too imports everything from ‘pin to plane’. I want to use a live example to explain my stand. It was in 2005 that I was given an assignment by an international development agency to work for the competitiveness of machine tool (several sub categories) cluster in Bangalore. For me, competitiveness meant and means till date – exportability! So I started playing with data. I found that at that time India’s machine tool market was around Rs 5,000 crore (US$ 1 billion in today’s terms). India’s export of machine tools was about Rs 75 crores (US$ 15 million). I was astonished when I looked at Chinese data. China’s machine tool market was Rs 28,000 crores (US$ 5.6 billion). But what was interesting, was that China’s imports of machine tools in that year was Rs 4500 crores (US$ 900 million). When I conducted the first outreach event for the machine tool industry, I shared these figures and I challenged the industry that if we cannot get 1% share of China’s imports in machine tools – Rs 45 crores (US$ 9 million), then we have a long way to walk on words like competitiveness. Yes, I know about the argument of Chinese state subsidies and all that. But to me, it makes no sense when we talk of China’s imports! This exercise led to several exchange of trade delegations

|64| India-China Chronicle  July 2012

between India and China of which I was part of and I have a long story to tell, but will not do that at this point of writing. However, I would certainly like to share with you the fact that since that year, India’s exports of machine tools (several sub categories) to China has grown 100% year upon year – check the data of Indian exports! There are many such stories on India China trade. In this column, I will be writing one such story in every issue. Look out. What are the lessons? Exporting value added goods to China is possible. What are the missing pieces? • Product focused China knowledge seminars by stakeholder institutions. • Practical and 10 pages of market reports on product specific for example the lathes markets of China (Not the bulky 200 page glossy reports, which God knows who reads, certainly not the industry) • Product focused trade delegations to China, with targets for delegations. • Factory visits to China (yes, they allow) • Aggressive promotion of MDA & MAI schemes for China • Belief that we can export value added goods to China Remember, India is a model where entrepreneur is at the centre of economy and China is a model where state is at the centre of economy. Therefore, it is entrepreneurs of India who can do it, with a support role from government (not lead role as in case of China). Only strength respects strength. We need the spirit like that of,– Sarfaroshi ki tamanna ab hamare dil mein hai, Dekhna hai jor kitna baazu-e-qatil mein hai?”(The desire for sacrifice is now in our hearts We shall now see what strength there is in the boughs of the enemy). 

Jagat Shah

Founder & Mentor, Global Network, an international trade consulting firm and Chairman, India China Economic & Cultural Council, Gujarat