The Chinese dragon – friend or foe?
Economy on 17th October 2019
Many centuries ago, the world learned from China. For the last hundred years, however, China has been patiently learning from the world. It is now time for the world to learn from China once again. Why do we say so? Read on…
China recently celebrated the 70th anniversary of becoming a communist republic with much fanfare. Back in October 1949, when China was adopting the communist model of societal organisation, India was framing its constitution. In less than four months, India too became a democratic republic. The two nations in their current identities were, thus, born out of the ashes of the colonial world; both adopted a contrasting system of economic and social development. In fact, China was at a disadvantage in some aspects of development when compared to India. After seventy years, today China is a superpower in terms of economic and military progress. So what can India learn from China?
What are the key business lessons we can learn from China?
1. China’s customers — Young and dynamic
Today’s Chinese customers adapt to changes quickly, are e-savvy, and are aggressive when it comes to business, keeping personal emotions at bay. This new generation is practical and focused on business only. They are ready to cater to any requirement, local or international and imbibe technology to help cut costs. With Diwali round the corner, Chinese ‘diyas’ and firecrackers would flood the markets selling at half the costs. This is new China. This matters as we are busy showing slogans of new India while the basics are missing. Boycotting Chinese goods is not a solution, confronting them with quality Indian products that are equally affordable is the key.
2. China’s market — Diverse
Intense competition breeds winners with superb capabilities. Today, it’s not about petty Diwali gifts alone, most world-leading companies are competing with local Chinese companies even in China itself. This has led to the development of world-class capabilities as they evolved. Huawei, the telecoms equipment company, is an excellent example. They have not only emerged as the world’s best, but even provoked the US government to take action, protect their own companies in the US. Innovation and domestic scale did help Huawei to emerge supreme. Today’s new India really needs to wake up and fight the dragon using price and scale as a weapon. Administrative protection will only dilute the competitive edge we have acquired over the years, after embracing globalisation.
So what led to this transformation in China?
China has consistently focused on social development. This has helped develop a vast pool of human capital that catapulted economic reforms. On the other hand, education and health have always been an area for concern for India. By the time India began undertaking economic reforms in the early 1980s, India’s health and education levels were still poor. An average Indian died at the age of 54 in 1980 while merely 43.6 per cent of its population was literate. By comparison, life expectancy in China was 64 years and its literacy rate was 66 per cent, figures that India can only dream of.
So this Diwali, do not look at Chinese good with contempt, rather try to learn from these small but swift players on how to lead the battle for global dominance. If we could motivate our taste buds to accept their food, we surely can learn and implement their business strategies into our commercial functioning as well.