India to get taste of China price soon

Tuesday, 07 December 2004, 20:30 IST
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NEW DELHI: India is going to get a more direct taste of the legendary 'China price' soon as Beijing gets serious about exploring "collaboration at the manufacturing level." "China plans to use India as a base for manufacturing components of electronic goods. Lower labour costs in India make it an ideal location," Han Meiqing, a top Chinese trade official, told IANS here Tuesday. He is here to attend the India Economic Summit organized by the Davos-based World Economic Forum. "We tried it earlier, but couldn't succeed. But this time round, with our relations improving, we are confident of making it. We are also fine-tuning a strategy of localisation to maximise advantages from this collaboration," disclosed Han, deputy director at the China Council for Promotion of International Trade (CCPIT). Alluding to the warming of India-China relations, Han added, in a slight conspiratorial whisper: "Politics is supposed to protect and promote interests of business." Han gave his sales pitch a cultural spin. "Chinese customers are very similar to Indian customers in terms of lifestyle and taste. We believe that the vast middle class in India and China shouldn't only be entertained by the Western goods." Reacting to the charge of the Chinese dumping their incredibly low-priced goods on Indian markets - dumping is a thorny issue with Indian businesses -- Han chose to be evasive. "Yes, dumping is a sensitive issue. But with more and more Chinese business becoming accountable to shareholders, it's not going to be easy to sell goods at less than the cost of production," he explained. So India needn't feel threatened by the Chinese dragon breathing fire, Han assures, his tongue firmly in cheek. "Rather than positing India and China as rivals, we should encourage the competition between the two countries," concurred Michael G. Spencer, chief economist with Deutsche Bank, Asia. "India is the only country that can rival China in terms of the sheer size of the market, infrastructure and commitment to reforms." He sounded upbeat about the prospect of India emerging as a low-cost manufacturing base for exports to advanced countries. With one out of three consumers in the world born in either India and China and a burgeoning talent pool of trained manpower, aided by reforms, both economic and administrative, these two rising stars of world economy are set to be emerge as formidable global leaders. Competition rather than confrontation holds the key. If they can meld their energies together, they are sure to share the power and the glory in what promises to be an 'Asian Century.' Victor L. Chu, chairman and CEO of an investment firm in Hong Kong, sounded robustly optimistic about the "fantastic chemistry" germinating between the two countries. Going beyond economic wizardry, he predicted a bright future when "Adam Smith and Karl Marx will walk hand in hand and Mao Zedong will jive to stirring Bollywood songs."
Source: IANS