Optimism over the Orient

If Jairam Ramesh coined the word, other economists and thinkers haven't been backward in realising its potential. Which is probably why bookshelves are groaning under the weight of books on "Chindia", a portmanteau for India and China, especially the economies. These learned tomes cover almost every aspect of the Chindia phenomenon "" the economic superpower in the making, the threats to traditional economies, the size of a market that is several billion strong, its potential in the fast-growing IT and services sectors ... Now, there's an addition to the list, one that refines current thinking on India and China to arrive at a vision of a transformed world economy.

Jagdish Sheth's Chindia Rising is an optimistic, almost rah-rah, take on the two countries' impact on global business. By 2025, China and India will be the largest economy of the world, together accounting for 39 per cent of global output "" that's roughly the present share of the US and Europe put together. There will be a pan-Asian currency, one that is tied to China's renminbi or Japan's yen and which will become the dominant global currency. The world also will become "Easternised" "" not only because Asia will emerge the largest trading bloc, but also because the West will increasingly accept, adopt and adapt Eastern thinking, be it in art, culture, cuisine or even management traditions and perspectives.

Chindia's domination over the rest of the world will be absolute, says Sheth, be it cultural, geopolitical or economic. It will be hegemony, but not the usual exploit-them-till-they-bleed-and-then-do-it-again kind. This is good hegemony: "dominance without the attitude". Parallels may be drawn with the rise of America in the 19th and 20th centuries, but don't compare Chindia's rise with that of the British Empire or other European conquerors. They couldn't be more different, Sheth declares. Yes, India and China need resource assets "" iron, oil and so on; and yes, they need markets for the goods and services they produce. But these economies will not play power politics or try to take advantage. Instead, they will seek partnerships, invest in the markets and resource bases they tap and "" Sheth believes this is most important "" allow trade partners access to their own markets. That is entry to the world's two largest consumers markets, which means a win-win situation for everybody, he prophesies.

The cultural domination will derive from economic growth: "Following upon Chindia's burgeoning economic power and geopolitical influence, we can expect wide dissemination of Asian culture." That translates as more curry in Britain, Christian yoga in the US, and the growing popularity of Bollywood, feng shui and vastu shastra. "[The cultural fusion that joins the East to the West] will be a meeting of peoples, a mutual embrace, a joining of hearts and minds, and, with luck, a step forward for the human race," writes Sheth.

It sounds almost too good to be true. And it could be, warns Sheth (his rose-tinted vision of the future allows for a couple of blots on the landscape, apparently). Developed nations must get over their xenophobia and embrace the reality of a world where they may have to play a lesser role. Participate in Chindia's growth "" either as a customer, a supplier or as a partner "" and you can't lose. Cling to traditional North-South business models and you're doomed.

China and India need to pull up their socks, too. India needs to get over its "fundamental mistrust of capitalism" and accept greater, and better, institutional discipline of its entrepreneurial impulse. China, meanwhile, must offer better protection of intellectual property, strengthen its legal system and ensure transparency in government operations. "Change must come. Two and a half billion people will demand it," Sheth concludes.

Sheth certainly has the credentials to write on Chindia. Not only has he built his reputation as a global business consultant over the past 35 years, he is also the Founder of the India, China and America Institute, a thinktank for management and government advisors. The marketing professor at Goizueta Business School is a prolific writer, churning out one buzzword-heavy work after another in quick succession. Chindia Rising is out in bookstores less than a year after he wrote The Self Destructive Habits of Good Companies. Unfortunately, the need for speed takes a toll "" poor editing and the at-times jerky and stilted writing are an unwelcome distraction.

Readers familiar with the Chindian economies will also find themselves skipping most of the casestudies. Ranbaxy, Dr Reddy's, Wipro, Lenovo, Haier and the Tata Group are quoted extensively "" as they are in almost every book that deals with doing business in India and China. Been there, read that.

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CHINDIA RISING
HOW INDIA AND CHINA WILL BENEFIT YOUR BUSINESS

Jagdish N Sheth
Tata McGraw-Hill
Price: Rs 495; Pages: 205