Schattenspiel2a

South East Asia Dragon

This is a guest post from Shiva Venkatraman, a sharp observer of technological trends who have never failed to impress me with his insights. He talks about the SE Asia being the connecting thread between India and China.

 

Asia is the fastest growing region economically today and within Asia, there is no argument that China and India are the two giants, with China clocking 6.9 Trillion USD and India registering upwards of 4 Trillion USD in 2011 in GDP.  Though a lot of people have mixed opinions, China and India are complementary in strengths. China is strong in manufacturing, electronic hardware and Infrastructure build-out, India is very strong technology and services and there is enough room for both to leverage each other’s economies, if one imagines that each could become like another United States type economy ($15 Trillion US) in economic scale.  Just like vector addition in Mathematics, it would be nice if we could figure out how China and India can complement and leverage each other in this growth story. An Indian minister Jairam Ramesh coined the popular term “ChIndia”.  However, reality is somewhat different. This paper attempts to talk about how we can bridge this economically in a business sense, though geopolitics is heavily involved.
It is well known that geopolitics affects business and cross-border trade. China and India had a war in 1962 and some minor skirmishes after that and coupled with a disputed border in several places, it makes each one wary of the other. While their trading ties date back thousands of years back to The Silk Route to today, China and India don’t have any major trading gateway except  for two mountain passes through Sikkim, a state in Northern India. This small trading gateway has resulted in $10 Billion in trade between the two countries.  With the integration of Hong Kong into China, a country like Singapore is an ideal hub in SE Asia for China and India to collaborate because no other South Eastern Asian nation has both a large Indian and a Chinese diaspora as Singapore. Also, a third nation like Singapore, though small, could help bring about a lot of friendship, stability  and the much needed capital flows to facilitate business across borders.
The framework for building this bridge and using the parts of the bridge as analogies has to span the following layers:

  1. Foundation layers or “Pylons” of smart diplomacy and government to government cooperation across multiple nations apart from India & China.
  2. Supported by Pillars or “Towers or Cables” of Boosted Cultural and Boosted Cross-Border Business ties
  3. Finished With “multiple spans” of cross-border business opportunities, capital in the form of government incentives, venture capital and private equity and scaling across borders.


Here are 10 ways in which we can use the above framework to bridge China, India and South-East Asia:

  1. Leverage ASEAN to include China, India and perhaps the United States: While ASEAN is a good start and progress has been made in terms of declaring free trade agreements between ASEAN members and China, Australia, Japan, S. Korea, acceleration of these Free Trade Agreements would be a great step.  We cannot wait till 2013! Also, the inclusion of the US as a stabilizing force in the region to counter any geopolitics between China and India alone would help. See point 8 as to why.
  2. Encourage ChIndia to look inward and improving on reducing bureaucracy: In addition to free trade agreements, countries like China and India will have to make it easy to do business with them. It takes a few days to start a business in Singapore for very little paperwork and money. The story in India is vastly different, whereas China is somewhere in between! See point 3 and 10 for how small this can start. Singapore and other South-eastern Asian nations like Thailand and Malaysia can help these two countries.
  3. Replicate the Singapore hub trading model in India and China: In order to scale this model, India and China and other SE Asian nations could emulate a Singapore-type model city within their borders. This is not meant to have these new hubs compete with Singapore but co-exist so that the model scales across Asia.
  4. Uncovering Cross-Border Business Opportunities: Through a partnership with Governments, local venture capital firms and private equity entities could syndicate and uncover cross-border opportunities for entrepreneurs who may hitherto be unaware of expanding globally. Singapore, again, through its exemplary business fostering culture could facilitate this and show others the way.
  5. Use Singapore as a business testing ground: Many Chinese and Indian companies have operations in Singapore. According to Mr Iswaran, Senior Minister for Trade and Industry, Singapore, there are 3000 Chinese firms and 4000 Indian firms in Singapore already. Why not test the waters by creating a market for these firms to collaborate in Singapore? Then surely, the relationship could expand to other geographies and back to their home countries.
  6. Encourage Venture and Private Equity to be Truly Cross-Border: While the deals will get complicated, the rubber hits the road when business opportunities are married to true cross-border capital that takes more risk, gets a better reward and the risk is shared by public private partnerships between governments and entities providing capital. This will be a test for public-private partnerships for sure.
  7. Improve cultural and business ties: This starts with streamlining visas, encouraging educational exchanges at a school level, promoting “business tourism” and leveraging the internet. Again, Singapore has led the way in this regard using its many internet initiatives and advertisements to showcase. India and China have made a modest beginning but can learn a lot here. Other countries like Malaysia and Thailand are also catching up.
  8. Use SE Asia as a neutral ground:  Learning from the experiences around mineral exploration in the South China Sea, large nations like India and China need to be encouraged to look at SE Asia as a neutral ground. This is probably the hardest idea to achieve. Therefore, I am advocating for the use of other nations like the US as a counterweight.
  9. Indian businesses need to wake up and create the scale across SE Asia: If a VC firm or a PE firms invests, then we need the scale of the business to be built across borders to create a global footprint across Asia. This would create local jobs, improve SE Asian economies and allow China & India to raise better financing for repatriation back home. There are many Indian businesses that don’t think of Singapore as the next international expansion or for that matter even China. Indian businesses dream about the US and Europe. What these businesses need is a dose of macro-economy to orient themselves towards SE Asia, Australia/NZ and China. The Chinese business community seems to be picking up on this idea that there are opportunities other than the US & Europe by investing heavily in Africa and building closer ties with Japan, Australia and the Middle East.
  10. Start small: Bridging two giants and a dynamic region like South East Asia is a daunting task. May I make a small statement that it is better to start small and get some initial success? I am drinking the cool aid myself. I am an Indian, who is on the executive team of a Chinese IT and Rich Media Development Outsourcing Company and helping them uncover opportunities in India to outsource to China and expand to SE Asia, starting with Singapore!


Hopefully, I have made a case for building a bridge between China, India and South-east Asian nations.
Shiva Venkatraman
Disclosure:
Shiva Venkatraman is a guest editor for chinnovate.com  has over 20 years of software and knowledge process outsourcing experience across India, China, Singapore, S. Africa, Ireland, Canada.  The author serves on the executive team of Siloon Software (http://www.siloon.com) and as a strategic consultant to Brainleague, an Intellectual Property Portfolio Management Firm (http://www.brainleague.com) and lives in India.

Enhanced by Zemanta
Related Posts Plugin for WordPress, Blogger...

1 Response » to “How to build a strong business bridge between China, India and Southeast Asia”

  1. Jasmine says:

    it’s good that the writer tell us the way to build strong brigde between China, India and Southeast Asia though it’s not very easy and complex.

Leave a Reply

WordPress Themes


WordPress主题