» Business » 5 places Modi must visit in China

5 places Modi must visit in China

By Rahul Jacob
Last updated on: May 14, 2015 15:27 IST
Get Rediff News in your Inbox:

A visit to the factories of Guangdong would have been a good place to start for Prime Minister Modi. It is the crucible of economic reform, says Rahul Jacob.

No prime minister of India has visited China as often before becoming premier as Narendra Modi.

This curiosity is a rare accomplishment: few Indians know much about your country beyond the fact that it is a dictatorship and that this explains everything about why democratic India's economy is a fifth the size of China's.

Prafulla Ketkar, editor of the weekly Organiser, quips that few Indians "know about Mao Zedong, let alone Deng Xiaoping."

Your Excellency, wouldn't it have been possible to devise a less touristy itinerary for a globe-trotter like Mr Modi?

Beijing is a necessity of course but Shanghai and the grandiose terracotta warriors of Xi'an are a little cliched.

A true friend would have devised a more useful tour, but along with much of the world - except North Korea and Pakistan - we, have doubts about whether China gets this friendship thing.

(1) A visit to the factories of Guangdong would have been a good place to start. It is the crucible of economic reform. Your father, Xi Zhongxun, played a crucial role as provincial party leader there between 1978 and 1981.

Its per capita income was then one-hundredth of neighbouring Hong Kong's. Today, the province single-handedly exports almost two times the manufactured goods that India does. First stop should have been the Foxconn factory in Longhua near Shenzhen.

It's off bounds to the press as I know from having had to do interviews with workers in the cafes outside.

If only Mr Modi had had a chance to visit this township of a factory and some 250,000 young men and notably women - who until recently outnumbered men in southern China's factories - making iPhones and iPads.

It is a dramatic example of how factories run by a foreign investor (Taiwan's Terry Gou) for a foreign buyer (Apple's Tim Cook) can help transform a country's economy. In the first quarter of this year, China became the biggest buyer of iPhones, surpassing the US.

This was, as TeamLease CEO Manish Sabharwal says, a truly "Henry Ford moment," when workers become consumers, an example of the multiplier effects of moving millions off farms and into factories. Foxconn, of course, closed its factory near Chennai in February after it lost its business from Nokia who closed shop after the kind of tax dispute that India specialises in as retrospective revenge against the East India Company.

As neither Foxconn nor Nokia are likely to open in India again, it would have been fruitful to include a visit to one of the many small toy factories and garment exporters in nearby Dongguan.

China's share of exports of global garments is still north of 40 per cent and toy exports increased by double digits last year to $17 bn.

(2) Nearby is the picturesque Shenzhen port, third busiest in the world; China accounts for six of the top 10.

The six-lane highways and speedy customs checks at the port are a reminder that, as the research firm Gavekal Dragonomics observes, China is a developing country with First World infrastructure.

Please counsel Mr Modi's economic team to accept China, erm, Guangdong's huge lead, avoid head-on competition and concentrate on winning export share from Indonesia and Bangladesh instead. (3) Only embarrassment about the protests against China last year could explain the omission of Hong Kong from Mr Modi's tour.

This was the second largest market in the world for initial public offerings in 2014. Indians are among the senior most executives in several Western investment banks.

An explainer on how everything from China's railway signal company to subsidiaries of China Development Bank continue to use the market to raise billions would have been useful.

Hint: Historically, your Communists have been much more willing to sell large stakes in state companies than India's socialists have. Former Goldman Sachs CEO Henry Paulson reveals in a recent book that he has visited China one hundred times.

In the interests of saving face, please do not ask how often Wall Street CEOs travel to India and enquire instead about the visit of Facebook's Mark Zuckerberg.

(4) Mr Xi, this next request will seem bizarre but as building toilets is a much needed priority for India, it would make sense to include a trip to one of the many, many public toilets in Beijing or Shanghai - where one is never far from one as opposed to New Delhi where they are almost non-existent.

As a first time visitor to Beijing said the other day, the public toilets there are remarkable because they have practical foot pedals for flushing that everyone appears to use - and they are free.

(5) A journey by fast-train between Beijing and Shanghai should have been included to see the astonishing sight of elegantly uniformed male and female conductors sweeping the aisles with long-handled brooms and dustpans in between checking tickets.

While on board, please reveal how many billions of dollars China has lost on nearly all its high-speed routes but do not enquire about average passenger train speeds in India (54 kmph) as this would be culturally insensitive.

Such a journey through China would have inspired the awe that Henry Kissinger, your country's kow-tower in chief, refers to as China's ancient strategy: winning the battle before it has begun because one side has a dominant psychological position.

We concede you have won that already, Mr Xi, even overcoming the vast reservoirs of self-esteem that characterise the Indian government.

Both our countries have large problems and large populations and better things to do than fight, which neither of us are very good at.

As a parting gift, a copy of Ezra Vogel's Deng Xiaoping and the Transformation of China would make for ideal reading material as Mr Modi heads for Mongolia and South Korea.

The book explains the opposition Mr Deng encountered as he charted a course of disciplined and comprehensive agricultural and industrial reforms and how he delegated to loyal lieutenants such as your father to experiment so successfully in Guangdong. Yours etc

Image: Laborers work at a production line in a toy factory in Panyu, located in south China's Guangdong province.

Photograph: Reuters

Get Rediff News in your Inbox:
Rahul Jacob
Source: source

Moneywiz Live!