[ppi] [ppiindia] Dapatkah India bersaing dengan Cina?

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India and China 

Clash of the titans

Nov 4th 2004 | BEIJING 
From The Economist print edition


India increasingly sees China as a friend. But what
does China think?
 
  
PARADOXICALLY, perhaps, the one country among its many
neighbours with which India is genuinely chummy these
days is the one that you might think it would most
fear. China, larger, richer and armed with a nuclear
arsenal many times the size of India's puny holding,
ought to be as much of a worry to the strategists in
Delhi as Pakistan is. Increasingly, though, China is
seen not as a threat but as a model. India, its
economists and potential investors all hope, may one
day be the ?new China??a low-cost manufacturing
platform with a virtually unlimited pool of cheap
labour. But how does the old China see that?

In the polite discourse of public statements and press
commentaries, Chinese officials focus on the upside:
shared global interests, complementary trade and the
salutary effects of brisk competition between friendly
neighbours. While these arguments all make some sense,
they do not tell the whole story. In India, China can
only see a potential rival?if not now, then soon?for
natural resources, foreign capital and, above all,
export markets.

Pei Yuanying, a former Chinese ambassador to India,
argues that such competition need not be a problem.
?The crucial point?, he says, ?is to see whether this
competition is virtuous or vicious.? Both sides well
remember how vicious things got in 1962, when a border
dispute erupted into a short but ugly war. More than a
quarter of a century passed before relations returned
to a normal footing, and it took longer still for
trade relations to bear any fruit. From a paltry $190m
in 1990, annual bilateral trade grew to $7.2 billion
last year, and may reach $10 billion as it continues
rising this year. Factor in Hong Kong as well, and the
total could approach $15 billion.

Professor Liu Jian, of the Institute of Asian-Pacific
Studies at the Chinese Academy of Social Sciences in
Beijing, acknowledges that China and India are bound
to compete for access to fuel and commodity supplies
as their huge populations seek ever higher standards
of living. On both sides of the border, millions of
new cars, refrigerators and air conditioners are sure
to materialise, and both countries will be vying to
import the fuel and power they need to run them all.

At the same time, the two are locked in competition
for market share in common exports. Chinese textile
and garment firms have handily dominated their Indian
competitors, and analysts expect China to strengthen
its position further with the end of export-quota
restrictions mandated by the World Trade Organisation
at the end of the year. China's market share for
textiles in Europe has risen from 24% to 45% since
2001 in the sectors where quotas were lifted there. In
contrast, according to a report by Khandwala Research
India, global market share for Indian textiles has
been nearly stagnant. Constrained by more stringent
labour laws and poor industry integration, that share
has moved from 2.9% in 1995 to just 3.7% in 2002.

The tables are turned, however, in the
information-technology sector, where China, according
to one estimate, lags as much as 12 years behind
India. Though it excels at manufacturing relatively
low-cost hardware designed elsewhere, China is hobbled
in the software sector by mediocre English language
skills, poor quality control and a dearth of
managerial talent. While Indian firms sell software
services to the world, their fledgling Chinese
competitors have yet to earn the trust of European and
American customers.

In an effort to study India's success for applicable
lessons, one of China's top hardware firms, Huawei,
has posted hundreds of engineers to India's technology
centre of Bangalore. But according to Madhav Nalapat,
Professor of Geopolitics at India's Manipal Academy,
that effort is not likely to succeed. He reckons China
may have been well placed to excel in years past when
the ?perspiration industries? were what counted. But
now that it is the ?inspiration industries? that
matter, China is at a disadvantage compared with
India. Wishful thinking perhaps, but the contest is no
longer quite so one-sided.



 
 
The Economist 


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