The idea of Chindia
By Anoop K Menon
Is ‘Chindia’ a scrabble-inspired conjunction, an inspired hope, or an insight of sharp minds? A decade ago, scrabble would have won hands down. Inspired hope would have been the answer five years back. Today, the idea of Chindia would receive the epithet of a sharp prediction that could come true. Apart from the growing trade between the two countries—from $1 billion in 2001 to $25.05 billion in 2006—companies from both sides are crossing borders. Notable examples include TCS, Infosys and Bharat Forge from India, and Huawei, Lenovo and Haier from China. On the political front, efforts are on to resolve the border dispute, and India’s admission into the UN security council and the nuclear club.
In IT and the East, Popkin and Iyengar indulge in some heavy-duty predictions about India, China and Chindia, largely in the context of the IT industries of both countries. The authors are research heads with Gartner.
They begin with the premise that the center of gravity in the technology world is shifting westwards from the US. India and China are best placed to exploit this shift because of the high quality of their computer science and electrical engineering graduates, their growing consumer classes, and their domestic markets for technology. The book seeks to provide accurate information about the state of global IT competitiveness in India and China; realistic scenarios that explore the economic as well as potential social, political or other disruptions; the milestones that define the key issues portrayed by these scenarios; and the sign-posts that point to the milestone outcomes.
The book is primarily written for companies unfamiliar with or planning to engage the two countries. To facilitate this, the book has been organized into three parts—India, China and Chindia. We get to read about the historical and cultural backgrounds of the two countries, the status of their IT landscapes, and some of the most incisive analysis of the future scenarios for their IT industries.
In India’s case, the worst-case ICT scenario (with the highest probability) is what the authors term as ‘Digital Chasm,’ wherein improvements in the physical environment for the IT industry is derailed by a lack of qualified resources or talent. In the case of China, the worst-case scenario is a retreat into protectionism in response to slow economic growth; interestingly, this scenario has been assigned the lowest probability while the highest probability has been assigned to ‘China Inc,’ a scenario where the government’s stake in the economy declines gradually.
Popkin and Iyengar are positive about the eventual emergence of a Chindia bloc that draws on both countries’ strengths—India will access China’s strengths in manufacturing and low-cost labor, while China will access India’s know-how in digitally-driven productivity and world-class academies. They have assigned the second-highest probability to a ‘Rivals’ scenario where China tightens market access while India maintains protectionist barriers to Chinese investment.
A common touch point is the key role of governments in the scenarios presented. In India it is the uncertainty of coalitions and the clash of diversity; in China it is the invisible hand of the government in the economic pie. The challenge will be for both countries to reach a level of maturity which will ensure that political uncertainty is settled in the political arena and doesn’t destabilize economic activity.
Food for thought: six hundred years ago, India and China accounted for 75 percent of the global GDP.
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