I recently picked up a book entitled “China’s Century: The Awakening of the Next Economic Powerhouse” by Laurence Brahm. The book has a mix of views on various topics from government officials (including the Chinese Premier) and industry experts. States the book’s introduction: “At the dawn of the 21st century, one country, above all, stands poised to alter the global economy. With one quarter of the world’s population, a stable and increasingly enterprising government, and with recent acceptance into the World Trade Organisation, China’s economic might will profoundly affect the course of this century.”
Now take a look at what we are seeing in India in various industries. Cheaper goods from China are flooding the market. The amazing thing is that they are cheaper not by 5-10% but in most cases by 30-40%. Even in the software services area, where India has made a free run for the past few years, fears are being expressed that China is planning an aggressive entry in the near future.
Compare some of the numbers. China’s trade (exports and imports) is about USD 360 billion, about four times that of India. China has a trade surplus of USD 23.7 billion, India has a deficit of USD 6.7 billion. China’s foreign reserves stand at USD 171 billion, over four times that of India. China’s GDP growth this year and the next is anticipated at 7.5 and 7.8% respectively, both of which are 1.5% higher than that of India. Year-on-year growth in industrial production was 12.1% in China in March, compared to 0.6% in India In February.
While we worry about China, there is little thought being given to what India can do in this century to “alter the global economy.” We seem to be happy ambling along with our famed “lets-wait-and-see” attitude. Other than the occasional study which says that we can do USD 88 billion in software and IT-enabled services by 2008, there is little thought being given to a vision for India in the future. Modern warfare is being played out not on borders but in the world’s economic markets. There, India is not winning. This needs to change. What is needed is a business plan to make the 21st century not China’s, but India’s.
India does have some things going for it. The English language, a democracy, a legal system which works (even though it takes time), and the headstart in software. The question is: can we take some of the strengths and build upon them to create a significant competitive advantage for India in the coming years. In the words of Neil Gershenfeld (MIT Media Lab: “I have a vested interest in the future, because I plan on living there.” The future of India must matter to all of us.