Month: April 2012

“Chinpressions” – Impressions from my 1st China visit

It was a country which I was eagerly looking forward to visit for quite some time simply for 3 reasons. One, Seeing is Believing.  Around 1990, the GDP of India and China were almost similar. Today 20 years hence, China’s GDP is 2.5 times bigger than ours!   Was keen to see this miraculous change. Two, my trip to China twice in the past got scuttled and hence that added to the eagerness this time around.  Three, was keen to know how a communist country has successfully “manufactured” Capitalism?

It was a short trip that too on business to Shanghai with little free time to discover the city fully.  Nevertheless that time was enough to feel spell-bound some times, amazed most of the times! The view of the city while landing reminded of Singapore with pretty views of symmetrical roads, tall buildings, and manicured golf courses –in short features of a planned city.  Once out of the airport I could see a sudden rush of the local people to smoke and poor me I was engulfed in a chamber of Carbon Monoxide!  With 350 mn. smokers, China is the smoking capital of the world. Later on I would read that smoking related diseases cost China up to US$47.6 bn. every year! (The Ministry of health was intending to include Anti-smoking drugs and related treatments in the nation’s public insurance system for this reason!) For a city which is supposed to be most populous city in China, what amazed me most was I never felt the city crowded and buzzing with people !!

The weather was absolutely pleasant at 18°C and coming from Mumbai which had already started to scorch with the advent of summer, it was indeed a welcome change !

In Shanghai I could see majority of cars on the road being Volkswagen (including the taxis).  I was told that depending upon where the factory was, companies get tax benefits and so the prices of a particular brand is lower in a region and that brand dominates that region. So Shanghai was VW city. While on the subject of cars, it was interesting to note that China became the world’s biggest market for BMW in April this year overtaking Uncle Sam!  By the way, China is already the largest market for BMW’s premium segment rival Audi.  While on cars, must add that 15th April the day I landed at Shanghai was the day of the “Shanghai Grand Prix”. Nico Rosberg won the race – but I was told that the race itself was boring as he led the race from start to finish !

It’s not uncommon to come into China with one’s own prejudices like – “everything would be cheap”. Well, it was not to be. I was in for surprise when I saw in a Hypermarket like Carrefour things were either more expensive or at similar price points as in India.  Also generally branded things in the malls/stores were expensive than India. Another myth which got busted during my conversations was that labour in China is very cheap. It seems that it is no longer the case. The minimum salary/month for a factory worker is fixed by the Govt. at US$ 200. And this is irrespective of the location within China it seems. What differ from company to company are the benefits like Overtime multipliers, housing,.. I’m sure there are cities in India/Indonesia/Vietnam where the labour costs are around US$80-US$100 /month.  However it is the manufacturing ecosystem which is prevailing in China which makes it the factory for the world.

While on this “low cost ” issue I would like to share this article from “The Economist” which I just stumbled upon which almost reinforces my above finding on ” Low Cost China myth”.

http://www.economist.com/node/21549956?fsrc=nlw|pub|4-25-2012|1503018|73958874|AP

Similarly as I prepared for the trip, I also was mentally preparing myself for the gastronomic ordeal I will have to go through being a Vegetarian. Well, it was not so bad.

Throughout my stay I never encountered the familiar trappings of an emerging economy like fleecing taxi drivers, beggars in the streets, touts in the markets,.. which reminded me of the fact that China is no more an emerging economy but an economy which has arrived. But some old habits die-hard. So you could see drivers honking loudly, cigarette butts all around, aggressive lane cutting while driving,… And interestingly in some of the buildings one could see rods protruding out of the windows and were used for hanging clothes. It is my usual habit on foreign trips to engage in friendly conversations with the cabbies to understand the country behind the headlines/breaking news.  However I couldn’t do this here due to the language barrier Great wall!

Since I couldn’t believe my eyes that things are so very expensive, I enquired at the hotel specifically for the market for cheap goods.  Then they told me the existence of “Official” fake markets where the “Louis Vuittons” and the “Burberrys” of the world get hawked by enterprising Chinese salesmen/girls to hapless ‘Gora’ tourists at sky rocketing prices. These are the epicenters for “IP” violations! The general rule here is to offer 10 % of the quoted price and settle down somewhere between 25 – 30 % of the original quoted price!!!  Shopping here could be a very unique and adventurous experience for many though I suspect not so much for us Indians!

“FDI down for 5th month” screamed Shanghai Daily, “Fifth FDI fall amid EU woes” said China daily on the 18th April both leading English newspapers. This showed the importance the Chinese were attaching to FDI as a means for propelling their economy.  So here we are at China the capital of Communism expressing serious concerns of falling FDI while back home our communists and their ilk block FDI of any kind and treat it as a four letter word!

Maglev TrainTime to pack up – I was told not to miss on the “Maglev train trip” experience to the airport. The Maglev (originating from Magnetic Levitation) trains have been operational in Shanghai from 2004 and connect the city to the Pudong International airport. A distance of about 29 kms. was covered in 7 mins. and 20 seconds flat!  At 301kmph the loudest noise was not of the ticking clock! Not surprisingly it is a tourist attraction in Shanghai today!

Few years ago the CM of Maharashtra said that they would transform Mumbai into Shanghai in 5 years.  Either he was blind or we the people who keep voting for their party are dumb, I don’t know. But the politicians who are running our country oblivious of the strides the world is making and failing our nation are certainly blind, deaf and dumb.

Pudong Intl AirportAs I was waiting for the boarding call near the gate at the swank Pudong International airport at the end of my visit, I couldn’t resist a key question.  If China has made such giant rapid strides which are visible and the Govt. has been an enabler in this transformation, why should it fear public opinion?  Why should there be such tight controls on freedom of expression? Why should Facebook/Twitter or for that matter WordPress be muzzled???  A three-day trip that too on business was too short to find answers to such intriguing questions.  Do you have any views on this? I would be keen to hear.

Bring in the “FDI” !!!

For the short-term (1999-2001) industrialist A.C.Muthiah served BCCI as its President, he made one stellar contribution to Indian Cricket. That was the time when Indian cricket was besieged with problems a plenty. Match fixing allegations, pathetic track record in “Away” tests, no significant ODI tournament wins and so on. Raj Singh Dungarpur a very passionate Indian cricketer turned administrator mooted the idea of a “Foreign” coach for the 1st time for the Indian team and in the year 2000, John Wright was appointed coach of the Indian cricket team – a position which was reserved for Ex-Indian stalwart players till then. The rest they say is history. Under Wright, India made the right journey – apart from continuing to be “tigers at home”, they went on to draw a test series in Australia, defeated Pakistan in Pakistan in tests, reached the finals in the 2003 World cup, to name a few milestones. This set the trend for hiring only foreign coaches subsequently for the cricket team so much so that these days I see that even most of the IPL teams have only foreign coaches !!!

The recent turnaround of the fortunes of the Indian hockey team is attributed to (among other things) the role of Michael Nobbs, an Aussie and again a foreign coach!

If you look at Indian cinema of late, even the forgetful “Ra one” or Shankar/Rajinikant’s Super hit “Robot” boasted of technology which was at par with Hollywood. Recently they say that even in an average movie, the technique in Bollywood is comparable to Hollywood cinema. This has not happened by magic or by Rajini’s wish! A quick glance at the “credits” scroll in any Hindi movie will show you many names of foreign technicians. Though the contribution of the Indian technicians in movies like Ra one or Robot cannot be underestimated, the makers admit that they accessed the best talent available worldwide and that has indeed made the difference.

Godrej group’s Chairman Adi Godrej candidly admits that though they broke off ties with P&G and GE at one point of time due to strategic issues, the group strengthened its balance sheet with intangible assets like acquiring knowledge of new management systems, marketing processes, quality control processes,.. from GE and P & G. When Mukesh Ambani puts his feet into organised retail, the 1st thing he does is to tap talent from global retail giants like TESCO,.. to roll out the retail venture in India.

So there has been a lot of “Foreign Direct Investments” in India perse and its nothing new!

Where I’m coming from is if Foreign hands can value add significantly to our nation’s cause in Industry, Sports, Cinema and many other fields which I’ve not touched upon due to lack of space, why not try some foreign hands to shape up the “Governance” of our country ? Can’t we not hire experts with great track record in economics, administration, and governance in other countries to look at governance issues we have? My premise is that people from outside bring in a completely different perspective and come without a baggage and may pitchfork great ideas which can plug some of our country’s problems.

To our netas and may be public at large, this may seem to be an outrageous proposition and one that is fraught with dangers related to nation’s security and other sensitivities. And this could seem to be a very specious argument. After all is nation’s security or economic position same as a game of cricket or a SRK’s flick? Certainly not. If we can’t bring in people of foreign origin to work with us in governance matters, can we do the next best thing? Which is – at least tap the enormous PIO (Persons of Indian Origin) talent which is available outside the country to contribute in solving some of the plaguing governance issues. One sterling example in this context is how Rajiv Gandhi brought in Sam Pitroda in the 80’s I guess as technology advisor and he heralded the telecom revolution in the country! Similarly why can’t we tap Nobel laureate Amartya Sen to consult on policy making and economy? or a Vinod Khosla to bring in an “Innovation culture” in our education system? Shashi Tharoor is another good example of a bureaucrat who is trying to make a difference in the Indian political scene with a different perspective on governance. He has been a PIO for a long while and the time he spent outside I’m sure is shaping his approach to his job as a MP in India. It’s another matter that his too “social” attitude and functioning cost his job  as a minister too early in his political career.

It’s not to say that we don’t have talented people within the country at present or that people here are not capable. It’s just that some of these people who have a successful track record outside by their experience in other countries could bring in a fresh perspective to solve problems.

So my clarion call for bringing in 100% “Foreign Direct Indians” to Delhi for contributing to our country’s Governance!!!

Tailpiece:

Journalist: Why are you opposed to “FDI” in retail?

Mamata: How can they propose FDI in retail? If they had proposed “FDIDI” in retail, I would have supported it!!!