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China- An opportunity to other emerging economies

Posted in Finance Articles, Total Reads: 2084 , Published on October 16, 2011

China is already among the world's biggest economies, and it is growing fast. It's a leader in technology and innovation — not just manufacturing. It's among America's major creditors, and, some say, an emerging strategic rival. It's one of the world's biggest exporters and, potentially, the world's biggest market.


There can’t be a “one size fits all solution”. China, buoyant on its massive production capacity and fiercely competitive export products, can be a vital global partner for other BASIC countries as well. Talking of Indian perspective, in some sectors like IT, pharmaceuticals, China can be supplemented by Indian presence.

In IT industry, Indian stalwarts like TCS, Infosys and Wipro need to persuade Chinese firms to leverage their expertise with the firms’ business requirements. The Indian IT Industry has emerged from mere project execution to end-to-end business solution provider. The global corporations always appreciate us for ensuring capital utilisation, value chain efficiency and product development strategy. The Chinese industries should appreciate our impeccable record of providing critical solutions that can help them in positioning their firms as global companies. There are definite synergies around India's software and China's hardware capabilities -and both countries need look not only at joining forces and increasing their strength in the global economy but at the captive market of 2.5 billion consumers they share.

The second area of challenge is pharmaceuticals. India and Brazil which have 20 percent and 11.6 percent of global market share in generic drugs respectively have a considerable opportunity coming up in the few years. That’s because, around 70 billion $ worth of drugs are expected to go off patent in US in the next 3 years. So, Chinese firms can partner the pharma industries in these countries which also demand branding, domain knowledge and international networking.

For Heavy Engineering sector, the important groups within the engineering industry in India include machinery & instruments, primary and semi finished iron & steel, steel bars & rods, non-ferrous metals, electronic goods and project exports. India has a well-developed and diversified industrial machinery/ capital base capable of manufacturing the entire range of industrial machinery. The industry has also managed to successfully develop advanced manufacturing technology over the years. Among the developing countries, India is a major exporter of heavy and light engineering goods, producing a wide range of items. The bulk of capital goods required for power projects, fertiliser, cement, steel and petrochemical plants and mining equipment are made in India. Also, if we talk of China story, its massive infrastructure development and expansion plan has stunned the world .Thus, for Indian companies like L&T and BHEL, China is an invaluable market for business opportunities.

As India, Brazil, South Africa and other emerging economies become more global in their interests, their points of intersection with China are rapidly growing. They share their similarities with China in terms of culture, diversity in rich and poor and regional tastes. The challenge before them today is to elevate this convergence from a matter of necessity to a matter of choice.

This article has been authored by Prateek Wadhwa from PGDM-IB from KJSIMSR, Mumbai

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