Chindia: A New Perspective, and What it Means to Entrepreneurs

Saturday October 13, 2012 , 5 min Read

A lot happens when you put the dragon and the elephant in the same nest. China has evolved from being the 1984ish (Orwellian) country, and India’s waiting for a book titled India after Sonia Gandhi. On a serious note, in recent times, both these countries have left a growing impact on the global economy. Economists are studying these nations and their economies to identify the underlying value that is on the verge of getting revealed (or has it)! So what is special about Chindia?

It is the consumption pattern of the consumers that has shaped the economy. Their changing-at-every-instant tastes have kept the producers on toes. Consumers in India and China are the new kings and queens of the global economy. They have fast-changing tastes and appetites, and they are transforming the world with their consumption.

10_trillion_prize — The recently published book ***The 10 Trillion Prize*** encapsulates a lot on the perspectives that have emerged. The research that went behind the book reveals that there will be nearly one billion middle-class consumers—some 320 million households—in China and India by 2020. They are demanding “more, better, now” for themselves and their children. This is a great opportunity for entrepreneurs in the education sector. They can develop a global perspective and reach out to the countries. The study also shows a increase in the number of billionaires: in 2001, China had 1 billionaire and India had 4; today, there are 115 billionaires in China and 55 in India.

The projected values of the education sector indicate that some eighty-three million Chinese and fifty-four million Indians will become college graduates over the next ten years. Over the same period, the United States will see just thirty million new college graduates.

The rapid growth in both China and India has led to enormous growth in the consumption of the building blocks of households—from copper to corn to chicken to coal—plus almost every other ingredient important to better lives, particularly a diet higher in protein but also vertical dwellings with modern conveniences and vehicles of transportation of all kinds.On the commercial front, the two markets have already given rise to some of the powerful companies and are professed to devote more to the global economy. China already has three of the world’s top ten companies, ranked by market value: PetroChina, China’s ICBC bank, and China Mobile.

superpower — A perspective on similar lines had been shared by **Raghav Bahl** in his book Superpower? The Amazing Race between China’s Hare and India’s Tortoise. Some pertinent extracts from the book:

“Ever since I began my entrepreneurial life in the early 1990s, I have dealt, rather pleasantly, with foreign investors of all hues, shapes and sizes. One foreign investor or the other sits atop every key milestone. In the early days, there were venture capitalists just coming to grips with the 'maddening complexities' of India. I was, in their lingo, a person with 'promising intellectual capital' in a 'virgin consumer-focused business' which was likely to witness 'explosive growth as India's GDP shifted gears and consumer aspirations stretched beyond the needs of daily survival'. In other words, I was a poor but bright fellow, bereft of any financial capital, brimming with special media skills and ideas, capable of creating 'value' as the country's television content business was 'unleashed'. So if they gave me $5 million in cash and a chunk in equity, I could build a team of professionals and a company which could become a leader in 'India's nascent media industry'. That's the first kind of foreign investor I encountered way back in 1993.”

“Their (early stage VCs) excitement about India was always subdued, tinged with an edge of skepticism, if not outright disbelief. Why does your government take so long to give approvals? Why is your foreign investment policy so restrictive? Why are your airports in such a shambles? How come your hotels are so good, when the roads leading to them are so potholed? How do you speak such good English? Why do you have so many newspapers? Why are so many of them in English? How are they able to survive? Why don't you lower your voice when you make fun of your politicians? How come your license was not cancelled after you did such a tough interview with the finance minister? Why are there no malls here? Why are your cinema halls so rundown? Why don't Indian consumers pay for services? Every conversation would end with some variant of the same observation: You know what; it's not like that in China-or Korea, or Thailand, or Dubai.”

It has been a long time since these countries have remained in the “emerging nations” status. A burst is about to happen, and it will change the status quo of both the nations. The economies shall develop a new perspective entirely. It will certainly break many barriers and will lead to something good for the entrepreneurs. The beginning of a fresh global perspective, maybe?!

Napoleon once said, 'Let China sleep, for when China wakes up, she will shake the world.'

Hu Shih, former Ambassador of China to USA, said "India conquered and dominated China culturally for 20 centuries without ever having to send a single soldier across her border.

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