Four years ago, Ta-lin Hsu went, saw and … declined to conquer India. His conclusion: opportunities in India were “somewhat limited” when benchmarked with China. Not even a 7x return on an earlier investment in a private sector bank swayed the head of H&Q Asia Pacific, one of the most successful VC firms in Asia.

“Overseas Chinese had the money to fund China’s growth, but overseas Indians didn’t have money,” said Ta-lin. “The NRIs had Ph. D.’s and big brains — but no money.” And India would not be able to grow nearly as fast as China, he added.

The Internet changed all that, and now Ta-lin is singing a different tune. “I wish I had [come to] a different conclusion,” he says, doubly wistful because “overseas Chinese money went up in smoke [in the 1997 Asian financial crisis].” As the Internet age dawned, Southeast Asia was mired in the biggest financial meltdown in the region, and even China was affected by the catastrophe. What is more, the Chinese government viewed the Internet with grave suspicion and even today is “actively impeding growth.”

In sharp contrast, Ta-lin says, India profited rapidly by its own right. Companies such as Infosys came of age while newer companies like Hotmail, Exodus and Sycamore produced vast wealth among Indians, creating a groundswell of Indian entrepreneurship both in the US and India. Even “five of the seven Internet analysts at Goldman Sachs were Indians,” Ta-lin recalled. Suddenly, it is India that is ahead on the curve … not China.

“In 1996, maybe it was right” to stay out of India, but “it is no longer right” in 1999, Ta-lin said to himself. In pure economic terms, Ta-lin still rates China as the one with greater potential, but “one doesn’t know what may happen in China and there is so much control over the Internet.” Thus says the man who has preferred to tread cautiously on the political minefields of Asia and also picked up some great bargains since the Asian meltdown of the 1990s.