• Opportunities

I first stepped on Chinese soil in 1997. My aim at that time was to explore business opportunities in the country, especially in the area of education, on behalf of NIIT, the company I was a part of. Since China was a fast-growing economy in those days—notching up a steady and consistent YoY GDP growth of over seven percent—it seemed to be the perfect place to be in.

From having its doors firmly shut on the outside wall for years, the great dragon was lowering its barriers and allowing countries to scale its Great Wall. It was an extremely opportune time in the phase of its history, and we wanted to be part of this big moment.In fact, it was my interactions with the people of China, particularly those in the government and industry, that shaped my impressions about the country and created an identity for it in my mind.

In those days, China was automating rapidly, even though very few youngsters were opting for IT training. The result was that the demand-supply gap in the area of skilled technology professionals was slowly getting wider—such talent, in fact, was quite conspicuous by its absence.

What one found in the mid-1990s then was a slightly cautious government, which seemed extremely wary of allowing the private sector into major realms, especially education. Let’s just say the overall environment was not very welcoming or easy to deal with.

Tight government control was the order of the day and we found the going tough when we initially attempted to try and find a chink in the Chinese armor.

Our fortunes, however, took an unexpected turn which once again changed my perspective about the country and, in some way, also altered the way the Chinese viewed Indian companies. We somehow managed to make a breakthrough when the Shanghai Education Bureau took the surprising decision of experimenting with our model of learning.

The change in mindset was probably because by then India had built up its credentials in the software and services arena and shown the direction to the world in technology domain. Clearly, the Chinese government had begun to acknowledge India’s global pre-eminence in the area of IT software and services and training and developed a quiet respect for what we had to offer. That positive mindset continues to this very day.

The era of Deng Xiaoping and a China ready for modernization also eased matters for us. We were allowed to introduce IT training through our very first center in Shanghai, which simply captured the imagination of the young people and became a runaway success. We were pleasantly surprised by the response of the youngsters. The students thronged our facility, embracing it with ready arms. I have always found this attitude very refreshing—the ability of the Chinese to acknowledge individuals and companies they feel can do things better than them. They are always ready to learn from others, especially India, which now ranks high on their list of “esteemed countries.”

During the last decade in China, I also learnt the myriad dimensions of its complex and culturally diverse market. Like India, China is a tough terrain.
Unlike India, however, where English is quite rampantly used, China has a huge language and cultural barrier.

With a primary means of communication gone, China is indeed difficult to penetrate. It takes time, therefore, to study the market, understand its finer nuances and develop products that are suited to the needs of the local populace. This can be an uphill task as it is in complete variance to the scenario in India. Interestingly, what we found was that the Chinese do not say “yes” or “no” to one’s face; they take a more guarded approach, especially when taking business decisions.

For Indians, accustomed to more free interactions, the silence and non-committal behavior can be daunting, to say the least. However, the fix here is to absorb, understand, and try and pick up the quiet signals. It is also important to abandon the India perspective and completely remove that context when engaging with Chinese organizations and the country’s people.

This can really help, as overall the Chinese are quite friendly towards business practitioners, particularly from India. We have never faced any animosity in that nation, and have found that Indians are even more valued than westerners. The Chinese believe that India has given the world a lot of thought leadership—through icons such as the Buddha and Mahatma Gandhi—and that we offer a better social model with a greater focus on human values. This viewpoint has proved extremely beneficial for the company in China, and enabled us to spread our network throughout the country.

Today NIIT is present in 192 locations across 66 cities in China, enrolling around 50,000 students for our two-year plus programs. We have already partnered with over 140 universities and colleges in the country and the road ahead seems brighter. Our success in China proves, without doubt, that despite the yin and the yang, the pulls and pushes, the positives and negatives, the country is a wonderful destination to do business in. When I look back at our engagement in China, I cannot help but add that I have found it to be an extremely pragmatic nation, unlikely to drag in personal prejudices when business is at stake. Take the instance of China’s rather fractious relationship with Japan.

In thought and ideology, China may find itself on the opposite side of the fence with Japan, but it doesn’t let this impact its business across the border. Japan remains China’s second-largest trading partner!

This, in all likelihood, is also the reason why China, despite its less-than-stable political relationship with India, continues to strengthen trade with us. While trade between the two countries stood at Rs.4,500 crore a decade ago, it is now Rs. 225,000 crore. China is India’s largest trade partner and that itself speaks volumes. While, of course, this trade is slightly skewed to the Chinese side, we are sure and hopeful that this will change.

The Chinese also have the ability to “compartmentalize” matters with ease, so they can keep the problem areas out from their pure “business dealings.” It will be important to keep this in mind as we move forward, and as China becomes more and more important to our business outlook. It is our experience and belief that if any Indian company does not have a China strategy by now, it will not exist beyond 2020. By that year, we expect to see a multi-polar world where the U.S., China, India and Europe would be the four key pillars contributing to the majority of global GDP.

Both India and China offer mega markets with billions of micro consumers. Companies that do not address these colossal markets will not survive. As of now, almost 90 Indian companies have a presence in China. China is coming to India. We are seeing much more collaboration than ever before. Competition is giving way to such collaboration. And in this environment, it is not just the business aspect that one must focus on. Interestingly, when it comes to establishing a cultural connect with China we, as Indians, are almost halfway there! It may be amusing to hear, but China not only appreciates our IT, but also our beauty.

Whether it is a taxi driver or a shop keeper—most Chinese know and love Bollywood and the “stars” of both the big and small screens. Walk down the corridor of the NIIT office in Shanghai, and you are likely to encounter several screensavers that flaunt photos of Abhishek Bachchan and Sushmita Sen!

Interestingly, glimpses of India’s social milieu are already extremely visible on Chinese shores. It seems like the two nations, which were linked in ancient times through the spice and silk routes, are now rejuvenating these old ties again. It gives me a great sense of pleasure and comfort when I enter a pub, bar or disco in Shanghai and hear the familiar strains of a popular A.R. Rahman number!

It’s the same in a DVD shop, when I find peeking at me from behind the shelves, the latest that Bollywood offers. Zee TV, which is broadcasting in Chinese, has a huge fan following for its soaps in Shanghai. A performance by tabla maestro Zakir Hussain ended in a standing ovation, where nearly 80 percent of the audience was Chinese. Need I say more?

With so much of commonality and connect, it is not surprising that after years of solitude, both the nations are eyeing one another with renewed interest. However, it will take true commitment on both sides for this interest to turn into a mutually beneficial partnership and for the two nations to build a relationship based on mutual respect and admiration.

PRAKASH MENON is the President of NIIT China
©Entrepreneur October 2010

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China, NIIT, smetv