India or China? That is a question increasingly asked by a number of companies looking to offshore or develop joint ventures or just look for new growth markets. If you read the tea leaves in Washington, India is in, China is not.
The economic realities are far different. If you look at the CIA World Fact Book on China and India on most metrics, China is far more developed. GDP almost 2.5X, exports almost 8X, land lines 5X, cell phones 10X that of India. The big plus for India, of course, is its vibrant democracy. But that is political democracy - when it comes to economic democracy, India has 2.5X more people below the poverty line than China does.
India's physical infrastructure needs a lot of work. As this McKinsey Quarterly suggests, its financial infrastructure also needs upgrading. Its shining success is services exports around software and BPO - but they make up a little more than 5% of India's GDP. The politicians there need to put their heads down and keep executing and broadening that economy.
Of course, there are many who worry about the military threat from one or both. If numbers are any consolation, the high estimate for China's military budget is $ 60b, and India's at 20b - the US spends $ 400b a year.
For a western business perspective, the smart strategy is ignore the political talk and not take sides. Leverage India for services, China for manufacturing. And target growing middle classes, infrastructure industries in both countries as demand centers. Thar's gold in them thar hills with a combined population of 2.5 billion with a median age of 28...
Which brings us back to the subject of tea and politicians. Churchill is associated with this repartee about a cup of Darjeeling
Lady Astor: If I were your wife, I would poison your cup of tea
Churchill: And if I was your husband, I would drink it.
Of course, he did not tell her that he took Chinese Lapsang with his Scotch.
Reading Tea Leaves: Darjeeling or Lapsang?
India or China? That is a question increasingly asked by a number of companies looking to offshore or develop joint ventures or just look for new growth markets. If you read the tea leaves in Washington, India is in, China is not.
The economic realities are far different. If you look at the CIA World Fact Book on China and India on most metrics, China is far more developed. GDP almost 2.5X, exports almost 8X, land lines 5X, cell phones 10X that of India. The big plus for India, of course, is its vibrant democracy. But that is political democracy - when it comes to economic democracy, India has 2.5X more people below the poverty line than China does.
India's physical infrastructure needs a lot of work. As this McKinsey Quarterly suggests, its financial infrastructure also needs upgrading. Its shining success is services exports around software and BPO - but they make up a little more than 5% of India's GDP. The politicians there need to put their heads down and keep executing and broadening that economy.
Of course, there are many who worry about the military threat from one or both. If numbers are any consolation, the high estimate for China's military budget is $ 60b, and India's at 20b - the US spends $ 400b a year.
For a western business perspective, the smart strategy is ignore the political talk and not take sides. Leverage India for services, China for manufacturing. And target growing middle classes, infrastructure industries in both countries as demand centers. Thar's gold in them thar hills with a combined population of 2.5 billion with a median age of 28...
Which brings us back to the subject of tea and politicians. Churchill is associated with this repartee about a cup of Darjeeling
Lady Astor: If I were your wife, I would poison your cup of tea
Churchill: And if I was your husband, I would drink it.
Of course, he did not tell her that he took Chinese Lapsang with his Scotch.
July 19, 2005 in Globalization and Technology, Industry Commentary, Offshoring (other vendors), Offshoring (TCS, Infosys, Wipro, Cognizant), Offshoring Negotiations/Best Practices | Permalink