The lumping together of China and India into “Chindia,” has emerged as somewhat of an industry, with the publishing world busy churning out titles sporting the terms “dragon” and “elephant.” The temptations fuelling this trend are understandable. Continent-sized emerging economies, the two countries are at first glance beasts of a similar nature: shot through with contradictions, undergoing rapid industrialization, combining ancient civilizations with shiny-new 21st-century avatars. “Chindia” has thus come to be shorthand for the reorientalisation of the world, where the long dominance of the West is giving way to an Asian century.
But this two-in-one approach can also be disingenuous. As anyone with even a cursory understanding of the countries will attest, India and China are in fact substantially different civilizations, polities and economies. For foreign businesses trying to penetrate these newly lucrative markets this point is driven home by the fact that the formula for business success in one country rarely translates into success in the other. Unpacking the differential dynamics that power India and China is however, not an easy task. Harvard Business School professor, Tarun Khanna, takes a fair-minded shot at it. The questions he asks are both intriguing and important: “why can China build cities overnight while Indians have trouble building roads?”; “why does China prohibit free elections while Indians, in free and fair elections, vote in officials with criminal records?”; “why are there so few world-class indigenous private companies from mainland China despite the creation of a juggernaut economy?”
Ultimately, Khanna's inquiries fail to unearth answers that take us beyond what is already well-trodden ground: China's efficient government is the country's chief entrepreneur, while in India growth is propelled by the private sector and civil society, even as a corrupt government fails to deliver on most counts. Khanna's solution to both countries' problems appears to be simple, merely requiring that each take a leaf out of the other's book: greater freedom and private entrepreneurship in China and better delivery of public goods by government in India. But he falls short of explaining how such mutual learning can take place given the fundamentally different models of citizenship and nationhood India and China represent. An apple cannot become an orange no matter how attentively it studies one.
Nor does Khanna flesh out fully the implications of the counterintuitive fact that while in China the Communist Party derives its legitimacy from delivering growth, in India a government derives its legitimacy simply from its having been voted in. Delivering on its promises is thus less important than the fact of it having been elected. While India's is a process-oriented polity, China's is a performance-oriented one. The legitimacy of democracy in many ways absolves Indian governments from the necessity of performing. The authoritarian Chinese Communist Party can afford no such luxury.
Khanna appears to be writing primarily for an American audience and thus spends considerable space explaining why the US and its companies need to learn how to profit from the “jointness in new riches” created by the synergies between India and China. He makes much of the supposed “mutualism” between the countries and the “renewed hope” that they will “put aside their mutual hostilities … in favour of collaborations.”
His hopes are however belied by the fact that far from putting aside hostilities, political tensions between the neighbours over their unresolved boundary dispute are higher today than five years ago. Economic “mutualism” also remains more rhetorical than real.
Thus, despite the much hyped, by-now-clichéd idea of the coming together of Indian software and Chinese hardware there are less than a handful of examples in which Indian software has been employed in the production of Chinese hardware and no Indian software firm had invested in Chinese hardware companies in order to control a vehicle for the distribution of their product.
Khanna's style is largely journalistic, relying on interviews and anecdotes, although some parts read like the Harvard Business School case study notes they were probably fleshed out from. He includes several sketches of MNCs like GE Medical Systems, Microsoft, Metro Cash & Carry and Unilever to show how they have overcome obstacles by adapting their business models to the particularities of the local environment – different in China and India.
On the confounding matter of which system is better, it is to Khanna's credit that he remains neutral. He finds much to admire and criticize in both countries, although his understanding of India is deeper. This is a book for the general reader curious about the Asian giants that are shaping the new world order. For those seeking a more in-depth understanding, it may disappoint.
