Sunday, December 25, 2005


What a coincidence! Only last night I finished a posting on what I was reading in a book that I had bought at Santa Cruz airport. And this morning when I opened the ET there was a full page on India-China economy,and the 'Made in China' and 'Made in India' brands.It headlined 'Are you ready for the edge' and 'Go to the next level'. It talked about the growth of the Chinese economy,their products pervading Indian homes though it did not mention about Chinese
'Ganpatis' and Chinese Diwali sweets flooding the market. Selfrespect was the reason,I presume. And the writer questioned the state of 'Made in India' brands.

The companies that Donald Sull case studies in his book 'Made in China' are:Lenovo and Sina Corp in the IT sector,UTStarcom and AsiaInfo in the telecom sector,Haier and Galanz in the white good segment and Wahaha and Ting Hsin in the food and beverages.These are outstanding companies but their past performance is no gurantee for the future says the author.They could stumble if they let their guard down.

ET has made a quick comparitive statement of ten top companies by market capitalisation.China Petro and Chem,Petro China,China Mobile,China Telecom,ChinaLife Insurance,China Unicom,PICC Property and Casualty,Minimetals Development,Baoshan Iron and Steel and CNOOC. On the Indian side the companies featured are ONGC,RIL,TCS,IOC,Infosys,Wipro,Bharati Telecom, HLL,ITC and SBI.While ONGC market cap is about 50% of China Petro,SBI is a third of CNOOC. We have a long way to go.

The ET supplement carries an article by John Talbott, ex Goldman Sachs ,who says countries can't have effective market economies until their people chose really capable governments.Bad roads,poor infrastructure,bribery and corruption,too much regulation,fiscal deficits are the main problems that India is facing.Importantly he feels that real growth will happen only if the economy benefits all.

An inteersting point made by ET is that China's median age is moving up from 32 today to at least 44 by 2040.China will perhaps get old faster than it gets rich.Sure everyhting isn't peachy all the way.For India it is a wakeup call.Forge ahead or miss the bus.