A Unique Joint Venture: The China India Institute
By: Tamara Treichel, Ph.D.
One of the protagonists in Slumdog Millionaire makes a thought-provoking remark. Standing on top of a new high-rise in Mumbai, he enjoys a Pisgah view of his burgeoning Indian metropolis and exclaims, “India is at the center of the world.” Indeed, there is reason to believe that India and China (in Mandarin, China is called Zhongguo, literally, “Middle Country”) are the new navels of the world.
One Chinese-Indian couple has recognized that China and India are indeed forces to be reckoned with in this age of globalization. Ms. Haiyan Wang and her husband, Dr. Anil Gupta, are co-founders of the China India Institute in Bethesda, Maryland.
Dr. Gupta, who was born in India, is an internationally acclaimed pundit in global strategy and organization. He is a professor at the University of Maryland’s Robert H. Smith School of Business. Ms. Wang, an ethnic Chinese, is Managing Partner of China India Institute. The couple has authored two books together, and both have penned opinion pieces for newspapers such as The Wall Street Journal, China Daily, and The Times of India.
Just having returned from a spring break vacation with their family, Ms. Wang and Dr. Gupta introduce their institute, which was born in 2007 of a unique business and marriage alliance.
Asian Fortune: On your homepage, you introduce yourselves as "thinkers, educators, and advisors." Could you elaborate?
Haiyan Wang: We are thinkers in that we conduct original research and disseminate our ideas via books (such as The Quest for Global Dominance and Getting China and India Right, both published by John Wiley) and articles in prominent media such as The Wall Street Journal, BusinessWeek, The Economic Times, and China Daily.
We are also educators in the sense that we conduct executive education workshops and webinars in both in-company as well as open enrollment formats. Some of the organizations that have invited us to give talks about the opportunities and challenges posed by the rise of China and India include Stanford University Breakfast Series, Chicago Council on Global Affairs, Asia Society of New York, Asia Society of Hong Kong, Confederation of Indian Industry, and TiE-Silicon Valley.
Finally, we are also advisors in the sense that we work with companies in various capacities – as keynote speakers and consultants. IBM, Tata Group, SAP, Marriott Corporation, and Origene Technologies are illustrative examples of some of our clients.
Asian Fortune: Could you explain the logo of the China India Institute – the Chinese character, zhong, in an orange circle, and the name of your institute in white on a red background?
Haiyan Wang: We wanted to create a logo that would integrate key symbols that represent both China and India. The red background reflects the fact that the “red” color is a celebratory color in both countries. The orange color for the circle picks up on the fact that “orange” is the first color on the Indian tri-color flag. And, of course, the character “zhong” stands for China. The “white” color for the letters in China India Institute helps make the institute’s name stand out clearly against the red color.
Asian Fortune: When and how did you come up with the idea to establish your institute?
Haiyan Wang: We wanted to set up a research and consulting organization that would be able to leverage our mutual and deep insiders’ understanding of both China and India. In the entire world, there is almost no organization that brings Chinese and Indian thought-leaders together to look at both of these societies from an integrated (comparative but also inter-linked) fashion. Thus, we felt that the China India Institute had an opportunity to stand out and make a unique contribution.
Asian Fortune: Besides both being rapidly developing countries, do you see any other similarities between China and India?
Haiyan Wang: Despite some important differences between China and India (such as political systems, language, and food), few people realize that these two societies are far more similar than they are different.
Both are rich-and-poor at the same time. They are two of the world’s largest economies, and they are home to two of the world’s four largest pools of billionaires. At the same time, both have very low per capita incomes and the two largest numbers of the world’s really poor people.
China and India are also the producers of the two largest pools of science and engineering graduates each year. They are also the world’s two most active destinations for the establishment of new R&D centers by Fortune 500 companies. And, according to the U.S. Patent & Trademark Office (USPTO), patents granted by the USPTO to China-origin and India-origin inventions are growing at a faster rate than for any other country.
China and India are also two of the biggest emitters of greenhouse gases in the world. Granted, on a per capita basis, greenhouse gas emissions from China and India are much smaller than from the developed economies such as the U.S., still the fact remains that, at a national level, China and India are among the major polluters in the world.
China and India are also the two most prominent springboards for the emergence of a new generation of global champions across a wide variety of low-tech and high-tech industries. Examples from China include Huawei, Haier, Chery, and Lenovo. Examples from India include the Tata Group, Infosys, Mahindra, and Suzlon.
Even culturally, China and India are more alike than different. Both societies place extremely high emphasis on children, on education, on savings and investment, on respect for the elderly, and on the importance of face especially in public settings.
Asian Fortune: China and India were both represented at the 2009 G-20 London summit. From your point of view, was the summit a success?
Anil Gupta: The G-20 summit proved to be a much greater success than was anticipated. The agreements to vastly increase funding for the International Monetary Fund and to expand trade credit facilities were major accomplishments. The London summit also marked a symbolic turning point in that G-20 has now supplanted the G-7 as the body where the world’s major economic powers will come together. In the process, the London summit has accelerated the pace for the re-balancing of power in other global bodies such as the World Bank, the IMF, and the U.N. Security Council. The rich countries now officially accept that power is indeed shifting from the developed to the developing economies.
Asian Fortune: Do you have any special post-G-20 speaking events planned?
Anil Gupta: We just gave a talk at SAP’s annual CEO event. Other scheduled talks in the coming weeks include those hosted by Asia Society of New York, Asia Society of Hong Kong, Accenture Corporation and others. The China India Institute is also planning to launch an annual “China India CEO Summit” starting in Spring 2010.
Asian Fortune: Could you introduce your book, Getting China and India Right? What does the title signify?
Anil Gupta: The central premise underlying this book is that being present in China and India is not the same thing as getting China and India right. Most CEOs and their senior colleagues are well aware that the world’s economic center of gravity is shifting from the developed to the emerging economies, in particular China and India. Notwithstanding this general awareness, very few truly grasp the magnitude and pace of change and the multi-faceted nature of the new reality. Fewer still have figured out what these developments mean for the future architecture of their company. Some of the most common mistakes include: viewing China and India solely from the lens of off-shoring and cost reduction, building marketing strategies that are centered around just the rich cities and the top 5-10 percent of the population, naiveté regarding the choice of local partners, and treating these two countries as peripheral rather than core to the company’s global strategy.
We argue that the rise of China and India is a game-changing phenomenon. Given the size and rapid growth of these two economies, a suboptimal strategy for China and India is no longer a matter of merely leaving some money on the table. Many of today’s Western giants that don’t have solid China-and-India strategies will face severe threats to their very existence in as little as ten years’ time, as competitors who are making the most of China and India mark these companies with a bull’s eye for annihilation or acquisition. Putting in place the right strategies, as outlined in this book, is crucial to leveraging these economies for global advantage.
Asian Fortune: There used to be an American saying, "Go West, young man." Now it appears as if the saying should be "Go East, young man (or young woman)." Do you think the economic future now lies in the East?
Anil Gupta: Absolutely. Just look at the speed with which China’s GDP is catching up with that of the U.S. Take the 2007 GDP numbers for U.S. and China and make three fairly conservative assumptions. One, the U.S. grows at a 2.5 percent annual rate. Two, China grows at 6 percent - not 13, or 11, or even 9 but a much slower 6 percent. Three, the Chinese yuan appreciates vis-à-vis the U.S. dollar at a 4 percent annual rate, slower than what many economists are calling for. When you do the math, it becomes clear that China will catch up with the U.S. by 2025. Look ahead another 25 years. Assume that, from 2025 onwards, U.S. GDP continues to grow at 2.5 percent, China’s growth slows down to 5 percent, and there’s no further adjustment in exchange rates. By 2050, China’s GDP will become twice as large as that of the U.S. India is following a similar trend but trailing China by about 12-14 years, the time lag between 1978 when China started its liberalization and 1991 when India jumped onto a similar train. In short, by 2050, the combined GDP of China and India could well exceed that of the U.S., Europe, and Japan put together. The U.S. National Intelligence Council was indeed correct when it noted in its recent report to The White House: “In terms of size, speed and directional flow, the global shift in relative wealth and economic power now under way – roughly from West to East – is without precedent in history.”
The website of the China India Institute is www.chinaindiainstitute.com.