could be the mantra for Diwali or Chinese New Year.
~ By Kavita Ogale
Although they fall more than 6 months apart from each other, the Hindu New Year or Diwali celebrations bear striking resemblance to Chinese New year festivities.
As agricultural societies, both India and China, perform similar rituals to usher in their new years. A family gathering, spiced with good food, blessings for the new year garnished with new clothes, a clean house and presents for kids, all mixed in with a fiery topping of fireworks to ward off evil and lots of joy and laughter, marks the perfect recipe for both nations to start another agricultural cycle.
While the reasons behind celebrating both Chinese New Year and Diwali
are different, both countries have been following the same practices for many
The festivities commence with an elaborate house-cleaning regime which
is in keeping with the idea of ‘doing away with the old, and bringing in the
new’. This is followed by decorating the house with lights, lanterns and lucky
words cut out on craft paper to ward off evil, ushering good vibes, long life,
peace and prosperity.
The main theme for all this cleaning and decorating is to have the
entire extended family together under one roof. Both Diwali and Chinese New
Year, see families converging from far and wide, with generations
of one family often sharing the table for a ceremonial dinner occasion.
Children are pampered with gifts in India and red envelopes stuffed with
lucky money in China to bless them with luck, good health and progress.
Like in India, most Chinese
families stay up late to watch a traditional play, performances of song and
dance followed by a colourful display of fireworks to ward off evil before the
onset of the new year.
are these celebrations, that economic forecasts are made based on consumer
spend during Diwali and Chinese New Year. Sales and discounts lure consumers
into buying elaborately decorated gift hampers for family and friends.
Purchasing power prior to New Year celebrations therefore become the weather
wane pointing towards a bump or slump in the domestic economy for that year.
India and China in conclusion are not only similar when it comes to
traditional ways of celebrating Diwali and Chinese New Year but also bear
testimony to the fact that when it comes to contemporary aspects like
purchasing behaviour during festivities, consumers in both countries are not
unlike each other.
Three days after Chinese president Xi Jinping will meet Pakistan Prime Minister Imran Khan, he will fly to the temple town of Mamallapuram, near Chennai to meet Indian Prime Minister Narendra Modi on Friday.
The two are scheduled to celebrate 70 years of diplomatic
ties between the nations next year marking a momentous growth story of economic
opening up, development, political discourse and growth for both nations.
However, the meeting comes under a dark cloud – the cusp of
border tensions in the north of India, southwest China, a slowing economy in
both countries and rising social unrests.
Earlier in August, China and Pakistan held their largest yet
air force exercise in China’s Gansu province, the Shaheen-VIII. Official Chinese
military media reported the exercise and specially highlighted that the
People’s Liberation Army Air Force (PLAAF) had for the first time sent its
fourth generation J-16 fighter to help train the Pakistan Air Force take on the
Rafale fighter aircraft being acquired by India.
In response, the Indian Army has recently started her own
training at 14,000 ft in Arunachal Pradesh just 100 km from the forward areas along the Line of Actual Control. The
expercise, will trial a new technique of offensive, testing the capabilities of
the newly conceived Integrated Battle Groups (IBGs).
The IBGs are a revised technique of combat wherein the army will
not function in separate wings but will bring together all fighting
capabilities like infantry, artillery, air defence under one command at the
Corp level formations of the Army.
The exercises which are being carried out in phases are scheduled to complete by October 25th.
Sensing a threat so close to the border, China had kept President Xi’s
visit in suspense until the last minute.
On the economic front both China and India are struggling –
China under the brunt of her trade war with the US and India under rising
inflation, mounting bad debts and an economy in recession on the eve of its
Chinese companies are in distress, due to the trade war –
having laid off employees and waking up to the realization that China is still
very dependant on the US for high-tech. She needs an ally in India’s 1.3
billion consumers, but more worrisome is that Chinese President Xi Jinping’s
goal of achieving the ‘China Dream’ by 2021 and ‘Made in China-2025’ within the
time-limits declared at the XIXth Party Congress now appear difficult.
On the other hand, India’s Prime Minister has just come off
a thumping publicity campaign in the United States, where he stood on the same
stage as US President Trump and their wowed their allegiance to each other.
Lastly, on the social front, tensions against China are also
rising in the south from Hong Kong even while China’s South China disputes
haven’t abated. India is also upset over draconian rules being recently passed
without a public consensus, rising inflation and unemployment.
On the whole, the informal talks the two leaders will share
on the sandy shores of India’s East coast, will lay the foundation for
hopefully better and stronger ties between the two neighbours. While Chinese
State Councillor and Foreign Minister Wang Yi has not yet visited India as is
protocol before a summit, the formula is expected to follow that of the Wuhan
Summit held between our leaders last year. Prime Minister Modi and President Xi
will lay the ground work, carve out the larger picture for the nations;
ministers of both nations will subsequently visit each others countries to work
out the modalities and implement plans made during these informal discussions.
How India and China are gearing up for the only war that counts
recently held United Nations Climate Action Summit 2019 brought 200 world
leaders together on a common stage, urging them to curb their greenhouse gas
emissions, reduce their carbon footprint and cut down on the unchecked use of
fossil fuels. Building tremendous pressure towards this cause was the worldwide
climate strike held between September 20 and 27 that witnessed 7.6 million
people being mobilised to generate a global emergency against this manmade
disaster. As the largest consumers of
coal, India, China and the US have an enormous responsibility to address the
climate crisis and exemplify best practices to continue growing their economies
without furthering the decline of natural resources.
Together India and China, the world’s third largest and largest emitters respectively have called upon climate finance amounting to $100 billion per year by 2020 from richer countries to support their move towards emission reduction, green initiatives, advanced technology and a sustainable renewable energy plan.
Rising temperatures, frequent droughts, flash floods, receding coastlines and food scarcity are just some of the realities that stare us in the face, as per a scientific report by the United Nations in as close as the next two decades. While commitments made in the 2015 Paris Agreement are still to be inked or implemented, temperatures are expected to peak at over 3 degrees more than existing levels even if 200 nations rise up to the challenge of curbing carbon emission and meet their nationally determined contributions (NDCs).
Prime Minister Narendra
Modi at the UN General Assembly continued to show a steadfast resolution to
supporting the fight against global warming as evident in his proposed
Coalition for Disaster Resilient Infrastructure (CDRI), that seeks to unite UN
bodies, the finance and private sector to strengthen infrastructure against
potential climatic catastrophes. The International Solar Alliance (ISA) allies
nations between the Tropics of Cancer and Capricorn to harness solar power while
reducing costs borne to fund it. Part of the agreement is to invest a trillion
dollars to get solar energy installations up and running by 2030. India is to
also move towards a goal of 450-gigawatt (GW) renewable energy.
As Xi Jinping’s government leads the People’s
Republic of China into its 70th year, the second largest economy in
the world has significantly alleviated its carbon footprint through economic
restructuring, reduction in energy consumption through coal from 74% in 2006 to
58% in 2018, rapid urbanisation, emphasis on energy efficiency and adoption of
electric vehicles. Spearheading the need for speed when it comes to reforming
its approach to climate change, it has passed over a hundred policies to
promote renewable energy like vast wind and solar power, sourcing non-fossil
fuels and curbing air pollution. Its biggest challenges now remain restricting carbon dioxide emissions,
finding alternatives to emission in other countries through coal exports and
aligning its environmental targets with the local and industrial governments.
While the writing is on the wall as far as acting
on their pledges is concerned, Chinese Premier Xi Jinping will have plenty to
discuss when he meets his Indian counterpart Modi in India at the second
informal Modi-Xi summit after Wuhan from October 11-13. Their joint stance and
determination to check the ecological degeneration of the planet will set the
tone for the UN COP25 conference in Santiago, Chile in December.
Prologue: Geopolitics in South Asia just took a twist – but it’s hardly a new one, is
it? Revoking the status of Article 370 and “regularizing” the status of Kashmir
is like a brutal post-independence hangover that won’t be shaken off, no matter
how many placebos it’s fed. Two generations later, how many people even know
how or why Article
370 came about?
It’s important to understand
the entire area under contention first,
India and Pakistan aren’t the only actors vying for control in Jammu &Kashmir.
In reality, the region is split among India, which holds 45%, Pakistan which controls 35%, and China
which occupies 20%.
China has built the CPEC (China Pakistan Economic Corridor)
highway through the Aksai Chin plateau in the northernmost reaches of Kashmir
and Ladakh. India has been protesting for years but dithered to take
Recently, the stakes just got a lot higher now that the CPEC
has become a part of China’s New Silk Road for trade. India maintains a
stand-offish stance and shuns participating in the New Silk Road, but the fact
that it’s hemmed in by it’s own thorny offspring – Pakistan on the one side and
Bangladesh on the other – is becoming painful to ignore.
The Modi Muscle:
Fast forward to the present. During Narendra Modi’s first
prime ministerial run four years ago, Article 370 was a campaign major
platform. He guaranteed to assimilate Kashmir and abolish Article 370. But it
didn’t happen during his first term. Come the second term in 2019 and his party
wins a thumping majority. His erstwhile campaign manager is now Home Minister,
and the time has come to deliver on that promise.
Does enforcing Article 370 really protect India’s (dubious)
right over Kashmir? Or will it actually result in India getting cornered into
becoming a reluctant partner in China’s New Silk Road?
In order to understand the geopolitics in the Kashmir Valley,
it is vital to understand the realpolitik of the Instrument of Accession to the
Republic of India, and the infamous Mountbatten manoeuvre, in context with the
creation of Pakistan (which didn’t exist at that time) and the shadow
politics and economics of British
imperialism in China that preceded that time.
The Sino-Indo Border Conflict:
When a ginned-up general during the British Raj at a Shimla
retreat drew a wavy line across a map of South Asia and declared that on one
side of it lay China and the other India, he unwittingly created what came to
be known as the McMahon
Line, an irrevocable boundary. The line wavered across the Trans-Himalayan
region, all the way over to the Eastern Himalayas. An arbitrary boundary, with
little regard for the people of the region or their ethnic roots, the division
became a bone of contention between both countries.
The Mountbatten Manoeuver:
Kashmir’s accession to India was a chequerboard of political
pawns. Facing a massive revolt after he oppressively annexed the independent
state of Poonch, Hari Singh, the Maharaja of Kashmir was at his wit’s end. He
sought to flee and signed away Kashmir on a “temporary” basis to garner the
protection of Nehru (a fellow Kashmiri) and Mountbatten. Mountbatten
double-crossed the people of Poonch who had fought for the British Allies in
World War II and British troops subdued the rebellion to saving Singh’s skin.
In return, Kashmir “acceded” to join the Indian constitution.
In 1947, Pakistan made it’s bloody debut on the global
stage. An irrevocable gash between the newly carved out federation of India and
the newly born country of West and East Pakistan begins – one that has yet to
heal. What is East Pakistan? The erstwhile state of East Bengal that was the
original Guinea-pig for Britain’s Divide & Rule Policy.
Seventy years down the line:
While Delhi still struggles to lend a hand to it’s far flung
territories in the north and north east, and cracks the whip from time to time
to reign in insurgency, Beijing is happy to hold out the gilded carrot in the
form of aid, infrastructure and security – but
there’s no such thing as a free Chinese dim sum – there’s a payback price tag
attached, as both Bangladesh and Pakistan have already discovered.
India and China played an uneasy game of chess as multiple
administrations struggle with balancing out concerns over border security with
the need for China’s investment in India’s growing and youthful population. In
the meanwhile, China has turned the other cheek and beguiled Pakistan to take
it under it’s wing. China is the latest ally for the Pakistani state – even
when it’s knowingly harbouring terrorists and renegades within its nuclear
Something needs to give. India needs to take a stand and
iron out the Kashmir issue. It’s already blown up in her face – multiple times.
Staking it’s claim and voicing it’s desire to amalgamate Kashmir wholly into
the Indian republic is a peremptory step, warning it’s neighbours to back off
it’s borders. It also flexes it’s muscle with Pakistan who covertly backs
jihadi-style terrorism in the valley. It renders itself stronger in the face of
a growing security threat from China and is literally a stepping stone towards
a tougher stance.
But while Beijing and Delhi may bicker, the question that
remains unanswered is “what do the Kashmiris want?” Perhaps its time we
listened to the voices that are echoing from the valley.
Supersonic internet speeds, digital prowess that can spur industries
including transport, utilities and renewables, benefits
to the health and education sector, a revolution in Artificial Intelligence
(AI), Internet of Things (IoT), communications, security, finance, as well as
agriculture – there is very little
that goes against the impending 5G rollout in India.
That it could be driven by China’s telecom giant Huawei, is the only
ominous cloud that hangs over India’s 5G dreams.
future that is inevitably geared towards the rapid development of smart cities,
the deployment of a massive 5G network is in line with PM Narendra Modi’s
tech-empowered India. Mukesh Ambani’s Reliance Jio, Bharti Airtel and Vodafone
Idea stand poised to tackle the fiscal deficit amid high-priced spectrum and a
heated price bracket, even as the proposed three-month trial, set for this month
to test a 5G spectrum in India is fast gaining momentum.
insight into the rollout of 5G services in India by the Department of
Telecommunications in 2017 reveals an estimated upturn worth over US$1 trillion by 2035.
a decision on the inclusion of Huawei pending, Nokia, Ericsson and Samsung are
the selected equipment vendors who will lend crucial support in India’s bid to
keep up with the global move towards the fifth generation of cellular network
and digital advancement.
in China is set to do for the 5G telecom market what AT&T and Verizon in
the US did for the world with the launch of the 4G wave almost a decade ago.
576 million smartphone users will employ 5G services by 2025, comprising around
40% of the world’s such connections.
will enjoy the first mover advantage in deploying the world’s first 5G
widespread network as early as next year pegged on government support and a
capital investment of US$180 billion towards the cause. This will mean low
latency and a 10-15% cheaper cost of commercial adoption of 5G-enabled
handsets, applications and services all over the world.
India, Keeping China’s largest standalone 5G-enabling network out of the mix is
being seen as a bigger risk than the perceived intelligence leak it seems to
the US softening its disengagement with Huawei after the recent G20 Summit in
Japan and countries like the UK still considering the offer, India is under
immense pressure to ease its opposition on the second largest smartphone
manufacturer in the world, after Samsung.
presence in India is a long-established one of nearly two decades with the
country housing the firm’s largest R&D centre overseas, set up in Bengaluru
in 1999 that employs more than 5000 engineers. The Chinese brand has gained
access from the Department of Telecom (DOT) to execute 5G trials in India last
India being one of the fastest growing telecom markets in the world today,
Huawei will try everything to gain a foothold in the country’s 5G ecosystem.
New Delhi’s resistance meanwhile, is linked to its previous history of hacking
Bharat Sanchar Nigam Ltd. (BSNL) which led to restricted usage of telecom
equipment in areas around the country’s borders in 2009, similar hacking was detected
in the state-owned telecom in 2014 as well. Huawei has denied these
allegations, assuring full co-operation with the Indian government on all
network security compliance issues.
must independently assess the impact of the Chinese Communist Party’s control
over businesses through intelligence agencies and laws before it signs the
dotted line. Better cyber security surveillance policies and standards to
protect data and networks is imperative and Telecom Minister Ravi Shankar
Prasad should be looking to close the gaps before he takes an informed decision.
Compete, collaborate and an occasional bout of conflict to
spice things up – that sums up the Indo-China relationship rather nicely. But
is India’s “Look East” policy taking it to borders beyond China? Apparently so
– and it looks like Taiwan and Japan are on it’s immediate radar.
Taiwan’s New South Policy (NSP) has it actively looking at
south and south East Asian trade partners that take it beyond the sphere of Chinese
influence. India’s economic crescendo has grabbed it’s attention and Taiwanese
investment has already made recent landfall on India’s shores.
Japanese investment in India is vintage – but is the growing
political partnership between India and Japan old wine in a new bottle?
One of the most aggressive Japanese VCs in India is SoftBank
which has made several major investments in the Indian technology sector such
as Ola and Flipkart. ReBright Partners, Dentsu Ventures and Mistletoe are just
a handful of the other Japanese investors eyeing the Indian startup-scape.
To counter the Chinese influx in Hambantota on Sri Lanka’s
south coast, India and Japan have joined hands to help Sri Lanka construct and
finance the new Eastern Container Terminal in Colombo. “The news that India has
teamed up with another of Asia’s powerhouse economies to offer Sri Lanka a deal
regarding another port – a deal that (unlike Hambantota) pointedly leaves
overall control in Sri Lankan hands – has inevitably given rise to speculation
that India and Japan are motivated by a desire to push back against Chinese
influence, and perhaps even to take on Chinese President Xi Jinping’s signature
regional infrastructure initiative the Belt and Road Initiative”, according to
Taiwan is looking at a 20 percent year on year increase in
bilateral trade. Walter Yeh, President & CEO, TAITRA said that there is big
scope for trade to expand between India and Taiwan. “There is no limit to the
growth potential. The current trade volume between India and Taiwan is to the
tune of US$7 billion. There is a lot of market to scale up further. Taiwan’s
trade with China alone is US$160 billion,” he told the Economic
FoxConn has set up a sizeable plants near Chennai and Andhra
Pradesh. It has plans to expand in Maharashtra as well. It recently announced
that it will be assembling Apple’s latest IPhone in India, which will help
Apple to grow it’s India footprint.
Japan and India have a long history of association in the
automotive sector. With India making strong moves towards electric vehicles,
Japanese companies are gearing up for hybrid and electric vehicles on Indian
roads. Basides Honda, Nissan is set to make an aggressive India entry with it’s
electric vehicles, starting with the Leaf. Taiwan, on the other hand, is eyeing
India’s rapidly growing solar sector – which depends heavily on Chinese
technology and equipment at the moment. Taiwanese firms are also bringing their Indian partners into
global value chains. Moreover, Taiwan can add value in areas that India is
prioritizing, for example, with its technology and techniques in the ICT,
healthcare, agriculture, and food processing sectors.
While Japan already has it’s foot in the door in several of these sectors ( in some cases, it has even exited certain ventures that have gone sour such as the Tata Docomo deal in telecom and Ranbaxy-Daiichi Sankyo deal in healthcare) Taiwan is still testing the waters.
But whichever way the wind blows, there’s no doubt that China better watch out — India is definitely looking further east towards new horizons.
The currently frigid US state
policy to resist any Chinese government-powered trade has led to the rapid
shuttering of 24 China-funded Confucius Institutes across American
universities. Meanwhile, even as the Indian government monitors the growth of
these institutes warily in cities across the country, China seems to be keen to
close the gaps in cultural and language exchange with its neighbour by offering
scholarships to Indian students to promote the study of Mandarin. Inchin Closer
believes that the need to safeguard power internally and uphold indigenous
values and traditions should not deprive countries like India and the US of
maintaining their history of multicultural harmony.
Rising dissent and investigative probing of the Confucius Institutes across universities in America has led to shutting down of at least ten of its centres within this year itself and more are set to follow. Citing reasons like lack of transparency and political propaganda to promote a pro-Beijing narrative, efforts continue to thwart any visage of supposed ‘intelligence leakage’ embedded within home turf from a potent political and economic rival. The Chinese government’s attempt to control academic discourse on its history through these institutes as part of its soft power strategy may be unauthenticated so far. In spite of this, US universities that hosted 40 percent of the Confucius Institutes since the Institute’s inception in 2004 seem to have no choice but to comply with the US government’s directive. Contributing to the Cold War ideology of keeping China at bay is set to affect the traffic of Chinese students on campus that amounts to 400,000 at present and millions in funding.
If the culling of Chinese learning is being enforced as a response to growing mistrust and need to protect American interest, America’s Modern Language Association records a fall of over 9% in foreign language learning across universities between 2013 to 2016. To sustain seamless collaborations in the global economy, the need for foreign language skill in the US has multiplied in the last five years with nine out of ten employees demanding it as a pre-requisite. Spanish, Chinese and Japanese are the most sought-after languages professionally highlighting the need to incorporate foreign language learning as instrumental in enhancing job opportunities. As the second largest economy after its own, the US would be wise not to undermine the need for Chinese language learning.
Similarly, India which will share 50 percent of the world’s GDP with China by 2050, cannot ignore the need to cultivate Mandarin. Although China has been advocating the establishment of Confucius Institutes in India since 2012, there are only three functional centres in Mumbai, Vellore and Kolkata so far. A conscious resistance against succumbing to the soft power penetration of Chinese influence and espionage through educational institutions has led to India looking critically and cautiously at these Institutes.
While other world language and cultural centres like Alliance Francaise, British Council or Goethe Institute do not elicit such reservations, China’s communist nature, its ambitious geopolitical clout and aggressive foreign policy are ensuring India administers its own guidelines for the running of China’s state-sponsored cultural centres within its borders.
With the US coming down heavily on trading relations with China, President Xi Jinping will be looking to secure better partnerships with India in coming days. Chinese Government Scholarships are enabling Indian students from Mumbai University to head to China to pursue language studies in Mandarin and it will be interesting to see if this trend catches on in the rest of the country.
What does the Year of the Pig hold for India-China bilateral
Will the pig stay at home, eat roast beef or have none?
Inchin Closer takes a look.
Move over Maruti Suzuki. China’s big boys in the automotive industry are about to muscle in on your turf. While Geely Motors is channelling itself through luxury brands like Daimler Benz and Volvo, SAIC Motorcorp is setting up it’s own plant in Halol to manufacture cars under the MG label.
With Electric Vehicles driving us into the future, China’s prowess in Lithium and battery technology gives it a major advantage. Other Chinese companies are worming their way in with ancillaries like motor parts and safety equipment. China is also rolling out in the tyre space. According to the Economic Times: “Of the 115 BIS licenses given for selling tyres in India, 36 are to Chinese companies.”
Micro finance is a new watchword in India as companies extend
small lines of credit and loans to lower income groups in tier II and tier III
cities to help them overcome the cash-flow hurdle before each month’s pay
cheque. Jade Value, the investment arm of Chinese finance firm, CashBus,
recently invested in Olly Credit. China has long-term vision – Indian youth’s
consumer spending is on the rise and an available line of credit helps to
increase their spending power. LoanTap, another financial firm has raised a
round of funding from Shunwei Capital, a Chinese VC, to offer loans and
overdraft facilities to working professionals in India.
The big boys like Alibaba, Tencent and CTrip have already cast their net into the e-commerce ocean and the next wave is gearing up to wash onto India’s digital shores. India’s start-up culture is a hotbed of investment for Chinese VCs.
“Although some of the Chinese giants have already tested the water, it is expected that in the coming years, SMEs of China are also likely to explore growth opportunities in India, especially in the digital sectors, which is primarily controlled by domestic companies’ or MNCs in China,” says a report from KPMG. “Several firms including Qiming Ventures, Morningside Ventures, CDH Investments, 01VC and Orchid Asia Group are already looking to buy stakes in startups in India since the beginning of 2018.” the report added.
Chinese telecom and technology manufacturers have gone all
out to be price competitive and create easy financing solutions for their Indian
telecom providers — including government carrier BSNL! Their tech prowess is
higher, allowing them to offer customized solutions which European and American
manufacturers are unable to do. However, profitability continues to remain a
big issue. Companies like Huawei and ZTE hope that introduce 5G at competitive
price points will give rise to a whole host of new technology and industries
that can supply incremental revenues.
Made By China may soon be the tag on a lot of Indian infrastructure. Heavy equipment manufacturer, SANY, has established a factory at Chakan, just outside of Pune and aims to have sales worth 1.1 billion USD from India by 2020. Renewable energy infrastructure is another huge area of growth for the Chinese in India. 90% of solar power infrastructure and a large amount of wind power infrastructure is dominated by Chinese companies. Andhra Pradesh and Gujarat have been the immediate beneficiaries as companies like Trina, Longian, CETC, TBEA and TWBB (to name a few) have set up manufacturing centers in these states. Hunan based CRRC has won big in the railways sector, to supply metro railway coaches for several cities and has set up a joint venture manufacturing unit in Haryana.
Can’t live with them, can’t live without them. That’s the
bottom line where Chinese foreign direct investment in India is concerned. It looks
like this little pig is going to cry “Wei Wei Wei” all the way home.
UPDATE: Amazon has stepped up its investment in India and pumped in US$402,920,000 (Rs 2,800 crore) on 7th June.
Amazon may be pulling out of China’s US$1.3 trillion e-commerce market but the game’s not up for the Seattle-based behemoth as it focuses on cross-border shopping with more and more Chinese seeking to buy branded and luxury products. E-commerce regulations in China favour this upcoming trend.
Cross-border shopping has gained relevance recently due to Chinese
consumers’ growing discontent with local products whose quality and safety may
be circumspect. The value of this market is rising by 15% year on year,
reinforcing the fact that customers in China are willing to invest their faith
in brands that promise value for money. Buying directly from the manufacturers
may often prove cheaper for consumers seeking cost-effective imported deals.
The assurance of buying original goods is often given more emphasis over a
possible shipping delay. Amazon
will be looking to cash in on this social media-driven trend of shopping for brands
that are coveted internationally.
Across the border, Amazon India grapples with rigid e-commerce
regulations, stiff competition from arch rival Flipkart which boasts revenues
of US$3.8 billion and the looming entry of Indian billionaire Mukesh Ambani’s
e-commerce giant. The collaboration between Reliance Retail and data arm Reliance Jio Infocomm will
massively increase data
access to millions in rural India pushing products exclusively from Reliance
Retail to a million+ captive audience hooked on his data network. That this
deal has the new government’s blessing, will only aide Mr. Ambani in squashing
his rivals and giving Amazon India a real run for its money.
Amazon India nonetheless, still has some ammunition left in
its arsenal. Bezos‘ strategy aims at upping its e-commerce to US$5 billion by
reaching another 100 million consumers in 2023. The plan includes tapping on
the resources of local shopkeepers, making available a lower version of its
mobile app that consumes less memory to appeal to users of cheaper mobile
phones, boosting its rural merchant count while offering great discounts and a
wide array of products. With so much intensive competition within the sector, India’s thriving e-commerce pie
is expected to be worth US$200 billion by 2028 (as per a Morgan Stanley
Amazon’s experience in both China and India unfolds an interesting insight into our retail worlds. Although both nations have a billion plus consumers, their e-commerce trajectories have been quite different. With China’s population ageing fast and India’s median age being 27.9 years in 2018, Chinese and Indian consumers although often clubbed alike, are different by nurture.
With the trade war between China and the US worsening, China will look to India to offload some of its goods. China might have an advantage, by having a more mature understanding of the e-commerce sector, but will have to play her foreign policy cards right to strike a deal in India, especially with a strong domestic incumbent. Then again, Beijing is familiar with squashing monopolies.
With general elections taking place across India, a new government is already in the making. In a two part series, Inchin Closer takes a look on what the new Indian administration should focus on with China, her largest neighbour and trading partner. From natural resources to national security, curbing terrorism to regional policy, are there ways for Asia’s largest nations to work with one another?
In the first part of this series, we take a look at the geopolitics of South Asia and the role that these two giants play.
MARITIME SECURITY & POLICY:
China’s Maritime Strategy 2015 clearly
states it’s intent to increase it’s presence in the Indian Ocean. Karachi and
Gwadar in Pakistan have already been named as key naval bases and China’s
growing ports in Sri Lanka like Hanbantota, do nothing to ease the tension
between the two navies.
China has recently moved nuclear armed
submarines into the Indian Ocean, creating a series of “pressure points” in the
South Asian seas, which is directly at odds with India’s “Act East” policy that
aims to strengthen India’s presence right up to the West Pacific. China aims to
increase it’s naval power exponentially – to about 350 surface warships and 100
submarines by 2030-35. India has also made heavy investments in increasing it’s
naval capacity. Will the pumped up maritime muscle of these two Asian giants
serve to keep each other in check?
achieved a major diplomatic breakthrough this week when China finally backed
down at the UN Security Council, and agreed to vote in favour of Masood Azhar,
the leader of Pakistan-based terrorist outfit Jaish-e-Mohammed (JeM),
designating Azhar as a global terrorist. China’s covert support for Azhar at
the UNSC has been a major sore point in relations between India and China.
Azhar was released to Pakistani authorities by India during a hostage exchange,
he founded the JeM, which subsequently took responsibility for several major
terrorism attacks in the region – most recently Pulwama in Kashmir. The exact
reasons why China protected Azhar are opaque, but some strategists feel that it
could be a retaliation to India’s protection of the Dalai Lama, whom the
Chinese view as a dangerous separatist leader.
it time for China and India to collaborate more closely with one another on
military intelligence to prevent terrorist attacks in the region? A potential
point of collaboration could be technology – as the smart city wave sweeps over
India, perhaps China and India could work together to implement better security
systems including security camera tracking systems, artificial intelligence,
face scanning, biometrics and citizen data. But on the other hand, if they are
instrumental in building such systems, China could also manipulate them for
their own use.
leveraging each other’s intelligence for regional harmony would be ideal, there
is still a long way to go before India, China and Pakistan reach a happy
elexir of life, India and China’s dependance on water continues to increase even
as more water bodies get polluted and fewer fresh water resources are available
to a growing population.
Mansarover’s watershed is a much sought after and fought after fresh water supply
between the neighbors. While both China and India’s river systems are aplenty water
is becoming a precious resource and needs to be managed effectively between the
nations especially since many of India’s rivers origniate from China.
on sharing water resources between the two nations would be a monumental
breakthrough for the entire region’s peace and stability, however Inchin Closer
feels this would take a lot more time and understanding between the nations.
THE CHINA BELT & ROAD
second China Belt & Road summit took place recently, but India continues to
decline to participate, despite China’s insistent overtures. The reasons are
many – not least of which was a diplomatic stand off, thanks to China’s veto on
Azhar being designated a global terrorist. But security is not the only concern
for participants of the BRI. Economics is another. Many of them feel it’s like
a debt-trap – wherein China’s infrastructure investment comes at a high
political and financial cost, which many of them are unable to repay. In fact,
China needs to be cognizant of the economic impact of unpaid debt from the BRI
on it’s own economy.
The New Silk Road overland route connects China all the way to Europe (see map above). Italy is the latest European country to sign on. But participants have already voiced concerns over unwieldy logistics and red-tape, particularly in the Central Asian region.
a wary onlooker, even as it’s regional neighbours – Sri Lanka and Pakistan –
have clambered onto the bandwagon. Despite the trade advantages, several
political strategists feel that it is not yet to India’s benefit to
participate. However, in the long run, if the BRI is optimised and used to the
mutual benefit of both countries, both India and China could benefit from it enormously
– making South Asia the super power it once was.
struggles in South Asia are nothing new, but it’s time for a fresh approach.
With a new administration sweeping in to drive India forward into 2020, it
would be fortuitous to have China as an ally rather than an enemy.
543 seats. Over 10 lakh polling stations. The Lok Sabha election 2019 has gathered steam and is keeping the entire country on its toes as 900 million Indians vote in the largest election in the world. Amidst all the action is the inimitable voice of one man who claims he has the power of an alchemist to turn India into a superpower. As Prime Minister Narendra Modi aims to keep term with an encore to the last elections he fought, Inchin Closer reflects on how he matches the powerful vision and ambitions of an equally dynamic leader across the border, his Chinese counterpart Xi Jinping.
Minister Narendra Modi’s wish of seeing India as a superpower is not very
different from Chinese President Xi Jinping’s promise of fulfilling the ‘China
dream’. Both leaders strive for global recognition but while retaining a
significant and strong nationalistic foundation. They both play to the
galleries and have always tried to reach out to the masses, gaining from the
populist mileage they create in their wake. Both Xi and Modi came to power
around the same time. Xi took over the reigns of the Chinese Communist Party
(CCP) in 2013 and has been architecting its destiny at an unprecedented pace,
fiercely protective about the nation’s sovereignty and undeterred in his zeal
for economic supremacy across the world. Modi was elected Prime Minister in
2014, largely supported by the antagonism against the then existing Congress
party rule and fuelled by a strategically sound front put up by the Bhartiya Janata
their absolute loyalty to their respective parties as a badge of honour, they
are both not known to mince words when it comes to critiquing rivals who may
try to overshadow their vision. Both have also been extremely diligent when it
comes to forging close ties with neighbours and fostering a durable foreign
policy that hinges on mutual co-operation. Modi is only two countries short of
Xi’s score of visiting 39 countries in a span of merely two years, underlining
the need for a revival of faith in their countries’ international stature.
one must admit that Xi has a relatively easier ground to operate on, in a
nation that is unified and bound by the common desire for social empowerment. As
a representative of a country that has multi-faceted complexities and is
distinctly diverse in religion, language and community within its very borders,
Modi is still dependent on the vote of his people dictated by the edicts of the
world’s largest democracy. To tide through the bureaucratic mess and the opposition’s
chaos in a country like India takes both endurance and tact.
Xi is poised at the epicentre of control in a socialist state that gives him
immense freedom in taking decisive steps when it comes to international trade
and investment. This has manifested in several nations across Southeast and
Central Asia to Africa becoming ready allies to China’s resource-rich promise
of infrastructural growth. Modi on the other hand, must navigate through a
circuitous path to channelise his moves, beset by an unyielding and highly
resistant system of slow-moving institutions and processes.
As chairman of
the Central Military Commission, Xi exerts firm control over the technological
development and rapid modernisation of China’s weaponry system. His revolutionisation of the military,
airforce and naval artillery is aimed at self-defense, with an eye on spreading
its influence in the South China Sea, the Pacific and the Indian Ocean.
military moves although relatively restrained in comparison have been coldly
calculated and promptly deployed to counter terrorism, winning him plaudits
more than brickbats. While some consider the successive surgical strikes after
the Uri and Pulwama tragedies as a fitting military reply to terrorism- it has
also labelled him an ‘autocrat’ who is seeking self-aggrandisement at the cost
of impaling the democracy.
It is clear that Modi will win the elections only through
consensus of the majority unlike President Xi’s one-party monopoly. His
emphasis will remain on staying true to his resolute and steadfast reputation
of taking India from being a frequently undermined developing nation to the
third largest economy after China and the US by 2030. His clarion call for
national integration, flourishing commerce and solidarity with countries beyond
one’s own mirror Xi’s ruling principles and are most likely to see him through as
one of India’s unrivalled ambassadors of favourable geopolitical and domestic
Fueled by cash flows and expanding channels of communication, China and India are awakening to a third round of bilateral brotherhood, focused on cultural exchange.
I was living in Shanghai and working as the
Indian head of an Asian tax and legal consultancy in 2008 at a time when
cultural exchange between China and India left plenty to be desired. Indian art
and cultural performances touring China’s major cities attracted mostly Indian
spectators, who enjoyed wallowing in song and dance from their mother- land
because of homesickness. Chinese people tended to be rare at these cultural
Many reasons could be blamed for the
phenomenon— awareness of India in China was low at the time. Most Chinese
didn’t know India as the software superpower it is today. Its economy was
gently growing 3.9 percent annually. Most Chinese hadn’t traveled to India,
were not particularly interested in it and hadn’t heard too much about it.
India was a poorer, slower and smaller neighbor and mostly inconsequential to
China, which had a GDP growth of 9.7 percent.
However, in 2017, an influx of investments
led by Alibaba and Tencent who announced or closed deals valued or nearing US$2
billion, heralded a renewed Chinese interest in India’s flourishing soft power.
China and India have had a rich tradition of
exchange dating back centuries. The first wave was led by Xuanzang’s journey to
the West and the spread of Buddhism across China. The second round was fueled
by business, initially through the trade of cotton and tea and eventually the
more lucrative opium. Today, fueled by cash flows and expanding channels of
communication, China and India
are re-awakening to a third round of bilateral brotherhood focused on cultural
FILM AND TELEVISION COOPERATION
Aamir Khan’s movie 3 Idiots grossed US$3
million in China just a few years ago, helping cement India’s image as an
enchanting, colorful nation capable of fascinating the Chinese.
Today, film cooperation between India and
China is booming. Inchin Closer, a China-India language and cultural
consultancy I founded in 2010, is in the thick of translating an animation
script for a 5D film that was written in and will be produced in India but
shown in 5D theaters in China. This project is making the most of India’s film production
skills and China’s infrastructural abilities.
Also in the works is a pilot for a Chinese TV
series, exclusively created, scripted and produced in India solely for the
Chinese audience. Considering that China is home to the greatest number of screens
world- wide, the content consumed by the country’s story-hungry consumers has
skyrocketed, and media producers in Beijing are bending over backwards to meet
the rising demand. Unable to keep up with the demand themselves, domestic
Chinese producers are commissioning Indian production companies to make TV
shows specially for the Chinese audience. A trend never imagined before, China
is now looking to India for her rich storytelling, film- making and production
abilities to create world-class content that can be seamlessly sold to
audiences from Shanghai to Kashgar.
Concurrently, Chinese content is also being
created for Indian eyes. Translated from Chinese to Hindi is a Beijing-based TV
series of historical Chinese stories that will be subtitled and dubbed for air
on Indian networks. Stories from the Qin Dynasty will be shown on Indian TVs
soon, highlighting ancient traditions and customs—similarities our two nations
share. Indian audiences will witness the parallels that Indian and Chinese
historical dramas, mythology and epics share.
The secret to making Bollywood movies so
spicy is creative chaos, an element that China’s films seem to lack. India’s film
industry functions in a mad sync that only its insiders understand. Until
China’s film industry can harness its creative juices and pour out unbridled
passion, storytelling will remain India’s strength.
The cultural similarities between China and
India have proved a big advantage for the latter when creating content for the
mobile-screen-toting, binge-watching Chinese viewer. Modern twists on
love stories and mythological epics are especially high in demand, and just
what Indian production houses—skilled in the genre— are being commissioned to
write by Chinese media companies. Beijing is now looking to Mumbai, the capital
of India’s film industry, to learn from and accelerate its storytelling and film
Recently, a high-level government delegation
led by Mr. Feijin Du, member of the Standing Committee of the CPC Beijing Municipal
Committee, visited Mumbai and New Delhi. Delegates met film producers, the head
of the Mumbai Film Festival and government officials to work out plans to host
bilateral film festivals. The agenda was clearly designed to facilitate
learning the secrets of Bollywood.
films and TV series are not the only carriers of the cultural collision
between China and India. Interest in both nations’ literature has also swelled.
A translation of Amar Chitra Katha’s graphic novel on Mahatma Gandhi is now in
the works. The novel has already been translated into Chinese and will soon be
available at bookstores and for online downloads, enabling Chinese readers to
understand how India fought for independence against the British with
Alongside the media, other technology has
enabled Indians and the Chinese to traverse cultural barriers. Many have fallen
in love, married and moved to the other country, adapting to family values,
traditions and a new way of life. Xiao Ming is one example: Now a mother of
three children, she married Gautam, a software engineer from Bangalore, India’s
Silicon Valley, nine years ago. Today, she earns a lucrative living translating
documents between Chinese and English, the languages of business for China and
Xiao Ming is a member of a constantly growing
WeChat group of Chinese wives who are married to Indian men. The group, with
almost 200 members, was started about six years ago when a few women came
together to support each other in a foreign land. Although few have met each
other, the group is an extremely strong support network to help the newly
married settle into India’s chaotic cities. The most discussed topic in the
group is food. The women help each other recreate dishes from home in Indian
cities where Chinese ingredients aren’t easily accessible. One woman even
figured out how to make tofu from scratch since the Indian paneer (cottage
cheese) never came close in taste or texture. Other topics of conversation
range from how to deal with in-laws, experiences growing up as single children
in China, and raising kids in a multicultural home.
Many enjoyed boisterous Indian weddings.
Marriages in India, like in Bollywood movies, are colorful and peppered with
lots of song and dance. However, traditional Hindu weddings involve the couple
circumambulating around a fire to the tempo of a priest chanting ‘mantras’ or
blessings for the couple. Inchin Closer was recently called to translate these
mantras for a Chinese bride’s family who had travelled from Hunan Province for
their daughter’s marriage to Prashant. The Chinese side of the wedding party
was enthusiastic about understanding the meaning behind the customs and
SINGING IN CHINESE
Jankee, a professional Indian singer, was
recently invited to sing a Chinese song at a traditional Indian wedding. The
groom’s family had some important Chinese clients at his wedding and wanted to
impress them. So Jankee was enlisted to learn and sing Mandarin pop songs to
impress and entertain the Chinese clientele at the wedding.
Because Mandarin remains China’s primary
language, producers must make content in Mandarin. However, because of its
vital role in bridging relations in business, the number of Indians interested
in learning Mandarin has skyrocketed. Businesspeople, traders, merchants,
entrepreneurs and professionals all want to learn the language so they can
seamlessly do business in China. Speaking Mandarin gives them a big advantage.
They can communicate easily with clients, which establishes a channel of trust
and camaraderie, which translates into better prices and profits in India.
China is also drawing in Indian youth with
opportunities to experience the country and culture first- hand through
programs such as those offering attractive scholarships to study Mandarin. In
2010, approximately 80 Indian students were offered scholarships to study Mandarin
and by 2018, the number had almost doubled to 150. Studying, living and working
in China not only offers Indians firsthand experience in the country, but also
helps them make friends and build a lasting relationship with their neighbor.
Through these various channels, strengthening
of cultural relations between peoples of the world’s two most populated nations
is on the upswing. This third wave of cultural camaraderie is fueling stronger
relations between China and India. And through the intermingling of the threads
that bind our people, our nations will weave an ornate quilt of love, respect
and a deeper understanding of each other.
How English is a language of exchange and empowerment for both nations
By Kavita Ogale
When Chinese blogger Hua Qianfang recently commented on Weibo that English learning is ‘a trash skill for most Chinese that wastes countless energy and money’ he met with stiff resistance. Not surprisingly though – A major chunk of both China and India’s burgeoning youth population aspire for better economic growth and opportunities, social status and global exposure, and is their English golden ticket to a more prosperous future,
The English education market in China grew from RMB 123.6
billion (USD 18.4 billion) to RMB 489.7 billion (USD 72.9 billion) between 2016
to 2017, and is estimated to grow to RMB 947 billion (USD 141 billion) this
year, according to a report by by Daxue Consulting a China focused market
Spurred by this high demand, the need for English teachers in
China is at an all-time high. Both offline and online training beyond schools
is being sought after, whether in the form of brick and mortar institutions or
apps. The online English language market in China itself has roped in an
investment of RMB 1.8 billion (USD 0.2 billion) in 2017. Over 500,000 Chinese
students enrolled in online English training companies like VIPKid.
India is in the lead with an English speaking population of 125 million[; which gives her an advantage especially in International service oriented jobs such as call centers. China’s English speaking population is estimated at 10 million.
The language that went up a hill and came down a mountain
India, of course, has
its British colonial past and statesman Thomas Babington Macaulay to be thanked
for English making inroads in the education system in the 19th century (around 1830),
in order to ease British bureaucratic processes.
While the foray of
English entry in China dates back to the 17th century, it was only in 1862 that
the country adopted a scholastic approach to teaching the language. However,
the institution of the People’s Republic led to seismic changes in foreign
language education, where learning English was aborted during the Cultural
Revolution. The death of Mao
Zedong ushered in a renaissance for the English language owing to Deng
Xiaoping’s Open Door policy, building the foundation of contemporary China’s
political and economic voice in years to come. This is the reason why English remains India’s lingua franca
for government and business, while Mandarin remains China’s language
The writing is on the wall. Global powers through the
centuries have been represented by countries that are driven by English as
their spoken and written form of communication. When 20% of the world’s
population speaks one tongue which is also the most sought after foreign
language being learnt across the globe, it certainly cannot be ignored.
Nationalistic naysayers may deride the elitist westernisation
that English represents for China and advocate keeping its spread in check. Inchin
Closer, however, believes that as both India and China take competitive strides
to answer the call of industry, environment, trade, travel and education on the
world stage, English will continue to resonate as the go-to language to counter
the communication gaps of its masses and classes.
‘Whoever is first in
the field and awaits the coming of the enemy will be fresh for the fight;
whoever is second in the field and has to hasten to battle will arrive
exhausted’ – Sun Tzu, the Art of War.
WHO’S GOT GAME?
Truer words couldn’t be spoken when it comes to FinTech,
China and India are choreographing an intricate two-step routine, with China
taking the lead. China is spreading her roots in the Indian Subcontinent by
seeding investment and sharing technology platforms with India’s burgeoning
Giving people the power over their own finances, online
retailers like Flipkart who are receiving funding from Chinese firms, aim to
become NBFC’s (Non-banking financial corporations) in their own right, so that
they can directly underwrite credit for their customers, rather than farm it
out to a bank.
The China-Eurasian Economic Cooperation Fund (CEECF), a
state-backed Chinese fund has also recently backed Indian cab aggregator, Ola,
which is also pursuing the NBFC route.
functionality too, having seen success in-house, Chinese companies are
also betting on the “EMI” (equated month instalment) and micro loan route in
India, which is rapidly gaining popularity among the youth making purchases
Smartphone technology is driving digital payments as well as
digital lending in India – and this is like offering honey to a bear. Chinese
micro-lending company Fenqile and smartphone maker Xiaomi have already swarmed
in and are making an investment in Bengaluru-based student lending platform
KrazyBee. Xiaomi has also made another strategic investment in digital lending
startup – ZestMoney, according to the Economic Times.
The cross-pollination between China and India in fintech is
also spreading to top tier talent. WeCash has recently
hired several Indians onto its team, including Puneet Agarwal and Daman Soni
from Mobikwik and Nitin Agarwal from Incred Finance – even as Tencent eyes an
investment into Mobikwik. And we already know that some of the big names in
Indian industry have already parked a strategic investment in Chinese
companies, such as Ratan Tata’s stake in Xiaomi.
However, the biggest implementation of fintech in India is
yet to come with the launch of the first wave of smart-cities, and we have no
doubt that Chinese technology will certainly be playing it’s part in making
India’s cities “smarter.”
Even though India and China may have the occasional bout of
disputes over their geographical borders, the virtual borders are already being
wiped out by technology collaborations. That’s why we feel that India and China
aren’t competing with one another, but are in fact leveraging their mutual
interests in the FinTech space for mutual benefit.
Did you… just buy your
airline tickets online instead of the family travel agent? Shop for your
groceries on a website vs. a “kiraana dukaan”? If so, you’re already part of a
fintech revolution that is sweeping Asia off it’s feet.
In the race for adoption, China leads the pack. But India is
fast catching up. Is this something that China needs to be concerned about? Not
really – because when you just paid your highway toll in India using PayTM, did
you realize that it’s powered by the Chinese tech powerhouse – Alibaba? Or that
your last Zomato order could take place thanks to Ant Financial’s investment in
China is a global fintech leader, but as the government
started to cash in on the FinTech boom and spike the interest rates for
home-grown companies in China, several of them have opted to look beyond the
Middle Kingdom to grow their business and achieve global leadership in the
The Chinese administration has clamped down recently and
imposed several regulations and restrictions on financial service companies and
their customers. While some people believe that this is not necessarily a bad
thing, it could be the harbinger of a slow down in growth within China itself.
Therefore, Ant, Tencent and others are looking at other parts of Asia to grow
their business. This is precisely where India zooms into focus.
“Alipay Singapore – the Singapore branch of Ant Financial,
and Zomato have sealed a US$210 investment deal, just six months after the
world’s largest fintech company made a US$150 million investment in the South
Asian food delivery firm. The latest investment will be for a 10% stake in
Zomato, bringing the Indian company’s valuation to around US$2 billion.
The deal comes just as reports that Chinese internet giant
Tencent plans to invest as much as US$700 million in Swiggy, Zomato’s main
competitor in the Indian market, after previously accepting investments from
According to a recent report by JP Morgan, fintech firms in
India have only succeeded in catering to 23 percent of the affluent section of
the Indian economy while a huge portion – roughly a 600-million-strong
population mostly of lower- and middle-income groups still remains untapped. Furthermore, the fintech landscape is
lead by market place lending at around 29-30%. Payments and remittances come
next at around 25-27%. A plethora
of categories including savings and investments, borrowings and financial
planning services yet need to break into the Indian market, leaving the
potential for growth not only in volume but also categories.
The potential for growth in India, especially Bharat (rural
India) is huge – and Chinese fintech companies are ready to cash in, literally.
Isn’t it ironic? CEO Eric Jing says that Ant Financial got its name because ‘ants
are small and its service was for the “little guys.”’ What these companies are
counting on is volume led growth.
WeCash, one of the largest players in the lending space in
China has already set up shop in India, and entered with a consumer-lending
product in partnership with banks. They aim to source borrowers for banks.
Their goal: to target the masses – the vast number of people across various
regions of the country who have remained financially underserved by traditional
brick and mortar institutions.
Is there a future? Inchin Closer certainly thinks so. In a world where currency is moving towards a paperless model, FinTech has a far more significant role to play and the Chinese have the advantage. Follow us as we bring you further insights into the future of Chinese fintech investments in India and the reasons why.
The tense stand off between India and China; a power play of strategy, sovereignty and territorial interests of two emerging Asian nations has the region in a tight wrap. With spillover effects into our economies and society, a clash between the Asian titians is unlikely, yet it’s going to take more than man and machine for either country to back off first.
With autocratic leaders at their helm, both China and India need to prove to the region and world, that the other is surmountable. As both nations flex their muscles, military analysts expect to see China test India on her vulnerable Eastern border more and India fight back with equal strength and vigour to protect her territory.
There’s no sale without scale. Or at least not in the virtual world. Ladies and gentlemen, grab your mouse tightly – the great e-commerce chess game has begun.
As the Amazonian giant from the USA makes its great leap into the subcontinent, local e-commerce players in India, such as Flipkart and Snapdeal are scrambling. But wait – there just maybe a silver lining in the offing, as China rubs its magic lamp and produces an investor in the form of Alibaba.
In a dramatic move that has swiveled eyeballs in the FinTech world, Alibaba has agreed to double up on its investment – putting down 1,100 crore (Approx. US$177 million) to increase its stake in PayTM, and more significantly, launch PayTM Mall, a direct rival to homegrown e-commerce players.
Even as Beijing’s citizens are making “lung cleansing” trips to Antarctica and Iceland to break free of a fossil-fuel smog encased China, the Chinese government is already taking action to make its citizens breathe easier. Perhaps Delhi needs to sit up and take notice before it has to declare more “state of emergency due to pollution” scenarios, like we witnessed in 2016. India is a country with enormous elemental abundance, which can easily be harnessed to create clean, efficient, economical energy. So where do we stand versus China in this matter?
In China installed wind capacity has crossed 129 GW in India installed wind capacity is approximately 23.4 GW
Installed solar capacity is over 43 GW in China; in India installed solar capacity is just about 5 GW
China is aiming for 150 GW of solar and 200 GW of wind by 2020; India’s target for 2022 is 100 GW of solar and 60 GW of wind.
The National Energy Administration is planning a massive investment in renewable energy that are cleaner, greener, and more efficient – and has committed a stupendous investment of 2.5 trillion yuan to make China’s free of its dependency on fossil fuels by 2020. India is not all that far behind as one of the top ten investors in renewable sources of energy worldwide, but it have an uphill task ahead of her.
“…you cannot ignore a fifth of the world’s population…as an entrepreneur, if you have the opportunity to build both Amazon and Alibaba at the same time, you’d be crazy not to try.”
– Travis Kalenick, CEO Uber.
Is Uber’s unicorn cowboy trying to do precisely this?
As the date for its hyped up IPO draws closer, investors are questioning whether the unicorn will be a rainmaker – or be reined in.
On the surface, it appears as if Kalenick has sacrificed his Alibaba genie for the Amazonian advantage. After losing two billion USD initially in a head to head battle with Chinese rival Didi Chuxing, Uber has “closed” its China operations, a move that investors see as positive, given the losses it has racked up – but will it turn the tide completely for Uber’s global push?
Inchin Closer reviews the situation from an Asian perspective.
Is Uber moving out of China or simply taking a strategic side-step that may light its candle at both ends – for its US IPO, and its Chinese market share?
Is Didi a friendly investor or a dragon crouching in the shadows, waiting for the right moment?
Is Uber really being bought out, as it claims, or buying in?
As rightly put by Shivshankar Menon, India’s former national security adviser, the relationship between India and China is clearly under stress. “We need to find a new equilibrium between elements we’ve always been juggling — economic competition and complementarity, and strategic sensitivities” – he told the Financial Times.
The sweet and sour neighbours, China and India have recently been at loggerheads over several issues which are gaining heightened importance as both stalwart heads of state, Prime Minister Modi and President Xi take charge of their bilateral affairs.
The buzzword is that over a slew of meetings scheduled in the next 3 months, both leaders are expected to iron out their differences and tango more in complement with each other. The first visit on August 12 was by Wang Yi, China’s foreign minister to New Delhi. The aim of the meeting was to lay the communication groundwork before the upcoming G20 Summit in Hangzhou, China and the BRICS Summit in Goa, India. In other wards, it was Mr. Wang’s agenda to make sure India doesn’t stoke dissent against the South China Sea dispute.
During his visit, Mr. Wang met Indian Prime Minister Narendra Modi, National Security Adviser Ajit Doval, External Affairs Minister Sushma Swaraj and the Governor and Chief Minister of Goa. Chinese state councillor and former foreign minister Yang Jiechi, who is Beijing’s designated special representative for border negotiations is also expected to visit India soon to quell tensions that have arisen with Beijing’s unilateral support of Pakistan. The flourishing friendship between India’s tense neighbours – China and Pakistan has created a strong rift in India China relations. With China asserting her infrastructural and investment muscle in Pakistan. Mr. Yang will need to come with a strong strategy if the two nations are going to support each other in the upcoming meetings.
We live in an interesting investment climate, where India and China can’t either do with or without each other.
Cross border investments in online apps and platforms are breaking traditional barriers and creating healthy, profitable companies for both nations. For the Indian start-up market to flourish, Chinese investments are important and a vital cog in the wheel that will turn the Indian economy around.
For Chinese investors, India is a massive market, similar to theirs, with a huge growth potential. Smell a win-win situation? Yet there are hurdles, a lack of political will and diplomatic trust enter at various points in a healthy India-China relationship to often mar the smooth functioning and often put a spanner in the works. However, since there is a strong potential that the bond between India and China will withstand political head winds, Inchin Closer takes a look at the India strategy for the Big 3 Chinese investment heavy weights – Baidu, Alibaba and Tencent – or BAT as they are more commonly referred to. The article aims to demonstrate where these investment bell weathers are now and the direction they are looking at. It is expected to foretell, the direction Chinese investments into India will take and subsequently how the rest will follow.
ALIBABA: A scion for a variety of low priced goods, Alibaba has recently tied up with Indian payments gateways Paytm to initially allow select Indian Indian sellers to source products from China at cheaper rates as well as help them with logistics and payments. India is an inevitable market for Alibaba for whom a developing market in search of cheap goods is perfect, as compared to Europe. As a result, Alibaba India already has 4.5 million registered users, making it the world’s second largest market for Alibaba after China. Additionally, Alibaba invested US$680 million into Paytm last September making it the largest investor in the mobile payments leader. In October, Alibaba joined softbank to invest US$125 million out of a consolidated investment of US$500 million into Snapdeal an online shopping portal.
As India stands in the sunshine with her rising GDP projections, growing investments and overall sunny outlook over a gloomy global economy, in the shadows lurks responsibility. The responsibility of sizing her social sector up to International (read Western) standards.
Taking a cue from her more stalwart neighbour China, India needs to know that with being a growing emerging market comes caveats of all kinds from afar. Looking into the growth of China and her boom from the 1990’s spurred by foreign investments, technology and capital, came the over arching western regulations to industrial production.
Chinese factories which initially ran robust on low wages suddenly had to deal with the western concept of a minimal wage scheme. Office goers got insurance and social security benefits and companies had to own up to stricter environmental laws. Papers were written on the appalling state of sanitation in China’s rural areas and education was kick started by making English learning enigmatic.
When the West invested in China, they didn’t just do so with their money, but they also poured time and energy in making her more like them. Fashion and diets changed. Holiday destinations and aspirations altered and consumer demands and family structures changed. Bringing in foreign capital meant sweeping changes for the Middle Kingdom. The resident soothsayer at Inchin Closer predicts the same. With India on the rise again, western media eyeing her for potential investments, collaborations and growth, the country will need to simultaneously pull her socks up in other aspects too. For investors don’t come in with a blind eye. They will want better security for their women, better infrastructure and cleaner air.
Indian pharmaceuticals have been trying to enter the Chinese market for a while. Priced cheaper than drugs available on the Mainland, Indian pharma companies have always been kept at bay for fear that they may disrupt the industry. However, there might be light at the end of this tunnel.
Shanghai based Fosun Pharmaceuticals has recently emerged as the billion-dollar bidder for India’s KKR backed Gland Pharma, outstripping US-based Baxter and Advent, as it aims to increase its research and manufacturing prowess. As China gets old before she gets rich, the pharmaceutical industry is now waking up to partnering with Indian drug companies to benefit their billion plus populations and avoid a healthcare meltdown. Both ancient nations have their medical advantages – – China and India supply much of the world (and the same pharma multi-nationals) with their APIs (Active Pharmaceutical Ingredients) and generics. – The roots of modern medicine lie in two ancient systems – Traditional Chinese Medicine and Ayurveda. So who really wields the whip in this pharmaceutical circus? Inchin Closer pauses to examine the larger picture.
Where are the Chinese headed in India? A question worth asking even as Wang Jainlin, Wanda’s big boss, committed 60,000 crores towards infrastructure in Haryana at the beginning of 2016. A massive industrial park in Kharkoda, near Sonipat, in Haryana is Wanda’s latest drop (more like a downpour, we feel!) in the Indian Ocean. Is this a trailblazing move by China’s cowboy investor, or is he riding a silent wave of Chinese investment? Inchin Closer dives beneath the surface of the matter to take a closer look.
What makes India an attractive prospect for our Chinese neighbours?
Who exactly are these new arrivals off the Chinese junks?
Haryana is leading the Indian pack to lure the Chinese into the Indian playground. So what’s Haryana doing to get the Chinese in? Chief Minister Khattar has made a terrific pitch highlighting:
The ease of doing business and regulation reforms under his regime.
Low rent leases
Friendly tax breaks
Haryana’s enhanced infrastructure facilities.
It’s strategic location with close proximity to the National Capital Region.
Indian Finance Minister Arun Jaitley is on a five day tour of China to pitch for Chinese investments from the slowing Chinese economy. India which is on a growth trajectory is aiming for 7.5 to 8 percent GDP growth at a time when China’s GDP has decelerated to 7 percent.
While the Chinese are interested in investing in India – a neighbour and a large market most investors are yet skeptical on her policies. Mr. Jaitley’s aim is to convince Chinese bankers and wealth fund managers to invest in India. The finance minister is not alone. His visit was proceeded by the Chief Minister of several Indian states, the last being Mr. Shivraj Singh Chouhan, the CM of India’s central and second largest state Madhya Pradesh who was in Beijing, Shanghai and Guangzhou last week with a 20+ member business delegation to pump investments into his state. Madhya Pradesh has already allotted land at Pithampur towards Chinese investments in automobiles, pharmaceuticals and technology and has promised massive discounts in land, taxes and electricity.