Kanika Datta: A 'cantion' from China

SWOT

"Asian women have petite stature, but their half-length easy to get weight as a result of lacking of sport and sitting in the office for a long time. Day by day, helplessly, the thigh meets the buttocks in the shape of pear or apple. Especially, when putting on jeans, the buttock is apparent."

"Shen Qiong plays an important role in the National Men's Volleyball Team ... Consecutively, He has been the winner of the 'Most Popular Sportsman' for two years.

"He is very welcome in female fans."

Both the observation on Asian women's figures and the perky profile of a leading Chinese sportsman are excerpted verbatim from a glossy Shanghai Airlines in-flight magazine.

In Shanghai Airport, the authorities have considerately provided separate taxi services for short and long distances which, a signboard tells you, will now allow travellers to arrive in the city "with a conspicuous sigh". The toilet in a Beijing restaurant that serves sublime Peking Duck has this stern sign: "No faeces".

And a notice from the administrative authorities in a high rise exhorts residents thus: "Those outgoing pets must be tied with chains and led by adults, if pets excrete themselves the carrier must make clean out the egesta." This was advised, the notice explained, in the interests of "noble and civilised living".

English-speaking visitors to China will constantly find themselves grinning at the many touching examples of this large, linguistically isolated population's struggles with the world's most popular language.

For Indian tourists in particular, these are constant reminders of India's historical, colonial-inherited edge in this respect. Indeed, two well-known facts appear to give us a great deal of comfort--that the country has a large, growing English-speaking population and the world's third-highest base of scientific manpower.

So China may have snatched the advantage as the factory to the world, it is thought, but it will have a tough time competing with India in IT, IT-enabled services and R&D. At $12 billion, India's IT exports are way ahead of China's piffling $700 million.

Besides, we have a supposedly stronger IP protection regime in place (whereas China is a pirate's haven) and an established judiciary (against what columnist Matei Mihalca described as a "limp and negotiable" system in China).

Also, don't we have nine billionaires on the Forbes list to China's one (and he figures at rank 514, whereas the richest Indian, IT billionaire Azim Premji, figures at rank 58)?

Yet, once the patronising laughter subsides, the reality can be sobering. Quite apart from the much documented fact that China attracts five times more foreign direct investment (FDI) than India, here is the surprise. Even in terms of IT and R&D, China could rapidly catch up with, if not overtake, India.

Here are some signs. A 2004 global survey of 104 senior executives by the Economist Intelligence Unit put China ahead of the US and India as a top destination for future overseas R&D spending. What is more, the differential was substantial. China attracted 39 per cent of the votes, a full 10 percentage points more than the US (29 per cent) and 11 percentage points ahead of India.

As for ITES, ironically, it is India that is likely to help rival China acquire an edge. Since 2002, almost every Indian IT major has set base in that country in the hope of exploiting a workforce that is considered equal to India in both cost and quality.

For instance, Infosys has a 200-employee venture centre in Shanghai, and TCS and Wipro are doing application and development work in the country and plan to expand their presence.

All told, technology research firm Gartner estimates that this activity from India could account for as much as 40 per cent of China's IT exports as early as 2006. Many Indian IT observers predict that China will soon be competing with India as an outsourcing destination.

This China rush is driven by practical needs. As Infosys chief executive Nandan Nilekani told journalist Saritha Rai, "We need a deep reservoir of talent as well as an alternative low-cost centre like India as we continue to grow."

That's because the exponential growth in ITES in India has pushed up wages and created a serious people crunch. China's gain may be India's loss simply because the country, aware of its deficiencies in this respect, has been taking practical steps in terms of incentivising overseas study, especially in English, IT, and management.

India, on the other hand, does little to build on a precious advantage built entirely by the private sector exploiting an opportunity in the country's geographical position as a key time slot.

As Wipro Spectramind's Raman Roy indefatigably points out, India has no real policy to encourage the sector, either in terms of infrastructure or education. "We are our own worst enemies," he ranted over lunch late last year.

Which is why, much as we may laugh at Chinese attempts to master English, it might be as wise for Indians to take heed of a sign spotted in a Beijing market. "Cantion," it read, "Drop down".