The tense stand off between India and China; a power play of strategy, sovereignty and territorial interests of two emerging Asian nations has the region in a tight wrap. With spillover effects into our economies and society, a clash between the Asian titians is unlikely, yet it’s going to take more than man and machine for either country to back off first.

With autocratic leaders at their helm, both China and India need to prove to the region and world, that the other is surmountable. As both nations flex their muscles, military analysts expect to see China test India on her vulnerable Eastern border more and India fight back with equal strength and vigour to protect her territory.

 

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~ By Charmaine Mirza

There’s no sale without scale. Or at least not in the virtual world. Ladies and gentlemen, grab your mouse tightly – the great e-commerce chess game has begun.

As the Amazonian giant from the USA makes its great leap into the subcontinent, local e-commerce players in India, such as Flipkart and Snapdeal are scrambling. But wait – there just maybe a silver lining in the offing, as China rubs its magic lamp and produces an investor in the form of Alibaba.

In a dramatic move that has swiveled eyeballs in the FinTech world, Alibaba has agreed to double up on its investment – putting down 1,100 crore (Approx. US$177 million) to increase its stake in PayTM, and more significantly, launch PayTM Mall, a direct rival to homegrown e-commerce players.

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~ By Charmaine Mirza

Even as Beijing’s citizens are making “lung cleansing” trips to Antarctica and Iceland to break free of a fossil-fuel smog encased China, the Chinese government is already taking action to make its citizens breathe easier. Perhaps Delhi needs to sit up and take notice before it has to declare more “state of emergency due to pollution” scenarios, like we witnessed in 2016. India is a country with enormous elemental abundance, which can easily be harnessed to create clean, efficient, economical energy. So where do we stand versus China in this matter?

• In China installed wind capacity has crossed 129 GW in India installed wind capacity is approximately 23.4 GW
• Installed solar capacity is over 43 GW in China; in India installed solar capacity is just about 5 GW
• China is aiming for 150 GW of solar and 200 GW of wind by 2020; India’s target for 2022 is 100 GW of solar and 60 GW of wind.

The National Energy Administration is planning a massive investment in renewable energy that are cleaner, greener, and more efficient – and has committed a stupendous investment of 2.5 trillion yuan to make China’s free of its dependency on fossil fuels by 2020. India is not all that far behind as one of the top ten investors in renewable sources of energy worldwide, but it have an uphill task ahead of her.

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~ by Charmaine Mirza

“…you cannot ignore a fifth of the world’s population…as an entrepreneur, if you have the opportunity to build both Amazon and Alibaba at the same time, you’d be crazy not to try.”

– Travis Kalenick, CEO Uber.

Is Uber’s unicorn cowboy trying to do precisely this?

As the date for its hyped up IPO draws closer, investors are questioning whether the unicorn will be a rainmaker – or be reined in.

On the surface, it appears as if Kalenick has sacrificed his Alibaba genie for the Amazonian advantage. After losing two billion USD initially in a head to head battle with Chinese rival Didi Chuxing, Uber has “closed” its China operations, a move that investors see as positive, given the losses it has racked up – but will it turn the tide completely for Uber’s global push?

Inchin Closer reviews the situation from an Asian perspective.

• Is Uber moving out of China or simply taking a strategic side-step that may light its candle at both ends – for its US IPO, and its Chinese market share?
• Is Didi a friendly investor or a dragon crouching in the shadows, waiting for the right moment?
• Is Uber really being bought out, as it claims, or buying in?

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As rightly put by Shivshankar Menon, India’s former national security adviser, the relationship between India and China is clearly under stress. “We need to find a new equilibrium between elements we’ve always been juggling — economic competition and complementarity, and strategic sensitivities” – he told the Financial Times.

The sweet and sour neighbours, China and India have recently been at loggerheads over several issues which are gaining heightened importance as both stalwart heads of state, Prime Minister Modi and President Xi take charge of their bilateral affairs.

The buzzword is that over a slew of meetings scheduled in the next 3 months, both leaders are expected to iron out their differences and tango more in complement with each other. The first visit on August 12 was by Wang Yi, China’s foreign minister to New Delhi. The aim of the meeting was to lay the communication groundwork before the upcoming G20 Summit in Hangzhou, China and the BRICS Summit in Goa, India. In other wards, it was Mr. Wang’s agenda to make sure India doesn’t stoke dissent against the South China Sea dispute.

During his visit, Mr. Wang met Indian Prime Minister Narendra Modi, National Security Adviser Ajit Doval, External Affairs Minister Sushma Swaraj and the Governor and Chief Minister of Goa. Chinese state councillor and former foreign minister Yang Jiechi, who is Beijing’s designated special representative for border negotiations is also expected to visit India soon to quell tensions that have arisen with Beijing’s unilateral support of Pakistan. The flourishing friendship between India’s tense neighbours – China and Pakistan has created a strong rift in India China relations. With China asserting her infrastructural and investment muscle in Pakistan. Mr. Yang will need to come with a strong strategy if the two nations are going to support each other in the upcoming meetings.

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We live in an interesting investment climate, where India and China can’t either do with or without each other.

Cross border investments in online apps and platforms are breaking traditional barriers and creating healthy, profitable companies for both nations. For the Indian start-up market to flourish, Chinese investments are important and a vital cog in the wheel that will turn the Indian economy around.

For Chinese investors, India is a massive market, similar to theirs, with a huge growth potential. Smell a win-win situation? Yet there are hurdles, a lack of political will and diplomatic trust enter at various points in a healthy India-China relationship to often mar the smooth functioning and often put a spanner in the works. However, since there is a strong potential that the bond between India and China will withstand political head winds, Inchin Closer takes a look at the India strategy for the Big 3 Chinese investment heavy weights – Baidu, Alibaba and Tencent – or BAT as they are more commonly referred to. The article aims to demonstrate where these investment bell weathers are now and the direction they are looking at. It is expected to foretell, the direction Chinese investments into India will take and subsequently how the rest will follow.

ALIBABA: A scion for a variety of low priced goods, Alibaba has recently tied up with Indian payments gateways Paytm to initially allow select Indian Indian sellers to source products from China at cheaper rates as well as help them with logistics and payments. India is an inevitable market for Alibaba for whom a developing market in search of cheap goods is perfect, as compared to Europe. As a result, Alibaba India already has 4.5 million registered users, making it the world’s second largest market for Alibaba after China. Additionally, Alibaba invested US$680 million into Paytm last September making it the largest investor in the mobile payments leader. In October, Alibaba joined softbank to invest US$125 million out of a consolidated investment of US$500 million into Snapdeal an online shopping portal.

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As India stands in the sunshine with her rising GDP projections, growing investments and overall sunny outlook over a gloomy global economy, in the shadows lurks responsibility. The responsibility of sizing her social sector up to International (read Western) standards.

Taking a cue from her more stalwart neighbour China, India needs to know that with being a growing emerging market comes caveats of all kinds from afar. Looking into the growth of China and her boom from the 1990’s spurred by foreign investments, technology and capital, came the over arching western regulations to industrial production.

Chinese factories which initially ran robust on low wages suddenly had to deal with the western concept of a minimal wage scheme. Office goers got insurance and social security benefits and companies had to own up to stricter environmental laws. Papers were written on the appalling state of sanitation in China’s rural areas and education was kick started by making English learning enigmatic.

When the West invested in China, they didn’t just do so with their money, but they also poured time and energy in making her more like them. Fashion and diets changed. Holiday destinations and aspirations altered and consumer demands and family structures changed. Bringing in foreign capital meant sweeping changes for the Middle Kingdom. The resident soothsayer at Inchin Closer predicts the same. With India on the rise again, western media eyeing her for potential investments, collaborations and growth, the country will need to simultaneously pull her socks up in other aspects too. For investors don’t come in with a blind eye. They will want better security for their women, better infrastructure and cleaner air.

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~ By Charmaine Mirza

Indian pharmaceuticals have been trying to enter the Chinese market for a while. Priced cheaper than drugs available on the Mainland, Indian pharma companies have always been kept at bay for fear that they may disrupt the industry. However, there might be light at the end of this tunnel.

Shanghai based Fosun Pharmaceuticals has recently emerged as the billion-dollar bidder for India’s KKR backed Gland Pharma, outstripping US-based Baxter and Advent, as it aims to increase its research and manufacturing prowess. As China gets old before she gets rich, the pharmaceutical industry is now waking up to partnering with Indian drug companies to benefit their billion plus populations and avoid a healthcare meltdown. Both ancient nations have their medical advantages – – China and India supply much of the world (and the same pharma multi-nationals) with their APIs (Active Pharmaceutical Ingredients) and generics. – The roots of modern medicine lie in two ancient systems – Traditional Chinese Medicine and Ayurveda. So who really wields the whip in this pharmaceutical circus? Inchin Closer pauses to examine the larger picture.

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~ By Charmaine Mirza

Where are the Chinese headed in India? A question worth asking even as Wang Jainlin, Wanda’s big boss, committed 60,000 crores towards infrastructure in Haryana at the beginning of 2016. A massive industrial park in Kharkoda, near Sonipat, in Haryana is Wanda’s latest drop (more like a downpour, we feel!) in the Indian Ocean. Is this a trailblazing move by China’s cowboy investor, or is he riding a silent wave of Chinese investment? Inchin Closer dives beneath the surface of the matter to take a closer look.

• What makes India an attractive prospect for our Chinese neighbours?
• Who exactly are these new arrivals off the Chinese junks?

Haryana is leading the Indian pack to lure the Chinese into the Indian playground. So what’s Haryana doing to get the Chinese in? Chief Minister Khattar has made a terrific pitch highlighting:

• The ease of doing business and regulation reforms under his regime.
• Low rent leases
• Friendly tax breaks
• Haryana’s enhanced infrastructure facilities.
• It’s strategic location with close proximity to the National Capital Region.

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With most of the money pouring into start-ups across China and India drying up, investors are getting a lot more sharp edged and nickel nosed about where they put their money.

China’s slowing economy earlier pushed several investors to India to reap rich dividends from her large population. However Chinese companies now too are second guessing putting their money into India and are rather cooling their heels even as the summer approaches.

Several Chinese companies including Qufenqi, a student loan company owned by Alibaba which was looking at buying into an Indian student loan firm have back tracked and are no longer interested in the Indian market as of now. The only beacon on the horizon seems to be Jack Ma’s Alibaba who are keen to enter India’s burgeoning e-commerce market. India is roughly estimated to be 5 years behind that of China when it comes to the adoption and implementation of new technology. This gives Alibaba a huge head start in implementing strategy for a market similar in size and value to China, and also a great advantage in knowing where the market is headed.

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