Can China become a likeable, trusted power?

China is living in a hostile external environment – mostly of its own making.

Recent aggressive rhetoric plus trade restrictions on Australia and border battles with India are leading examples of how China is projecting itself and the world is worried.

But China also means to become moderately prosperous by 2035. It will need to overcome global misgivings if this is to be achieved.

Andrew K.P. Leung is an independent China strategist and has written about this for the South China Morning Post.

Here are 10 steps China should take, according to Leung

First, get the message firmly across that China is neither able nor willing to unseat the US as the global superpower. China cannot compete with America, which has a military presence in 80 countries and whose military expenditure is 38 per cent of the global total – more than the next 10 countries’ combined.

Second, cut out the wolf warrior rhetoric, whether in diplomacy or on social media.

Third, work with the US and the World Health Organization to end the global pandemic.

Fourth, actively cooperate with the Biden administration on climate change.

Fifth, conduct regular joint naval patrols with the US forces in wider waters of the South China Sea.

Sixth, set aside territorial disputes and work with neighbouring countries in the South China Sea on the joint management and exploration of natural resources, including fisheries, habitats and deep-sea energy resources.

Seventh, embrace free and fair trade. For starters, seek to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which a Biden presidency may wish to join too.

Eighth, China should help North Korea become a rising economic powerhouse like Vietnam.

Ninth, reform the Belt and Road Initiative. Make it more transparent and include more participants.

Tenth, meet more milestones on the path to reform and opening up, whether or not they have been set in the 14th five-year plan – including issues like market reciprocity, state-owned enterprise subsidies, transparency, rule of law, human rights and goals including technological self-reliance and quality growth.

Leung writes that China has vowed to double the size of its economy and become moderately prosperous by 2035.

China is unlikely to act on Leung’s 10 suggestions – but to move on some would send positive signals to the world.

Andrew K.P. Leung is an independent China strategist. 

 andrewkpleung@gmail.com

7 fatal mistakes in Indian market entry

India is super exciting, vibrant, colourful and amazingly friendly. People are accessible and available. Deals can be signed and MOU’s are much loved. The population of over 1.2 billion is soon to become the largest in the world and is soon to overtake China.

While India will probably not be “another China”, it is becoming a global power in its own right and an economy that will soon not be too far behind the USA and China.

So, it makes sense to be there real quick, yes?

YES be there – but watch out for these fatal mistakes

  1. Trying to do the whole country at once will exhaust and confuse you – even Indian companies take years to cover it. Select your best one or two points of entry and the rest will follow.

2. Going in quick on price might seem exciting – but who is actually winning out of this deal? You become a disposable and cheaper provider – so your future is very short term.

3. Appointing the first person who says “yes” seems exciting and then nothing happens. Later you might work out every Indian says “yes” – in their culture, they have to. It takes time to find a “yes” that is real.

4. Focusing on injustice, slums, inequality and the Indian way might be something you think is important but of course it is pretty offensive to your hosts. Sure the traffic is diabolical, but there is no benefit in whinging.

5. A short time frame such as one year is a real killer for Indian market entry. It needs to be a minimum 3 years. If you cannot give it time, go somewhere else.

6. Going it alone sounds brave – but is stupid and wasteful. India is all about relationships and collaborations. And you will need “hand holding” by someone who knows the ropes.

7. Ignoring cultural differences is a recipe for misunderstanding and disappointment. Cultural differences between India and the west are massive – and what we have in common is also massive. You need to understand them both.

How did India miss out on being part of the world’s biggest trading bloc?

India is missing from the world’s biggest trade bloc which has just been formed – 15 countries representing 2.2 billion people have signed on to a Regional Comprehensive Economic Partnership (RCEP). Talks on RCEP began in 2012 and it has now created a bloc which accounts for about one third of the world economy.

This is a massive new initiative for global trade.

India and the USA have missed out – India because of concerns for farmers produce, and the USA because President Trump pulled the pin on the concept.

India is the mystery case in the region because opting out of RCEP is not going to help its economy. Concerns over lower tariffs hurting local producers won the day and India moved out of the deal.

Did India also withdraw because the relations between India and China are sour, with border disputes and other issues on the rise?

But India could ultimately join RCEP – the doors for India to join the bloc will remain open in future, according to the participant countries.

Otherwise, India looks like being one of the two big losers in this move.

The RCEP group is composed of the 10 Southeast Asian (ASEAN) countries along with China, South Korea, Japan, New Zealand and Australia.

Vietnam “hosted” the final deal online and said the deal will help to lower trade tariffs between the participant countries, over time, and is less comprehensive than the Trans-Pacific Partnership (TPP).

“RCEP will soon be ratified by signatory countries and take effect, contributing to the post-COVID pandemic economic recovery,” said Nguyen Xuan Phuc, prime minister of Vietnam.

The actual legacy of President Donald Trump’s “America First” withdrawal from multilateralism and deals like TPP and RCEP could be a declining US role in world trade.

In contrast, China could be the big winner – experts say that this pact is a testament of China’s strong influence in the region.

The RCEP will lower or eliminate tariffs on various goods and services, although the scope of the agreement—essentially an extension of free trade under existing frameworks—is limited.

So, what is the biggest benefit of RCEP? The pact will create so-called rules of origin, which make it easier for companies to set up supply chains spanning multiple countries.

This is super important – it will be much easier to manufacture and sell goods in the region once RCEP comes into force.

India and Australia have a trade relationship that can grow

A great source of information about Asia is ASIALINK here in Australia – and for those interested in India their INDIA STARTER PACK is valuable.

Australia’s economic relationship with India has expanded significantly in recent years – particularly exports of minerals and energy, as well as our provision of education services to tens of thousands of Indian students.

We now have the basis to do more. It will take some marketing creativity and a realisation that brand “Australia” goes down well in India.

Two-way goods and services trade between Australia and India totalled AUD 27.4 billion in 2017. Major Australian exports to India included coal (AUD 9.2 billion), education-related travel (AUD 3.4 billion) and vegetables (AUD 1.38 billion). Our main imports from India were refined petroleum (AUD 1.6 billion), medicines (AUD 335 million), pearls and gems (AUD 274 million) railway vehicles (AUD 199 million). 

The total value of Australian goods exports to India for 2017 was AUD 15.7 billion, making it our fifth-largest goods export market. We exported an additional AUD 4.4 billion in services to India, a figure primarily made up of education-related travel services and other personal travel.

Time to review your India market entry strategy? Let’s talk.

India’s Adfactors PR chief sets out a post Covid-19 reputation strategy

Madan Bahal, Managing Director, Adfactors PR, (pictured above) has said that both startups and mature companies have to navigate the post-COVID-19 world through effective communication and reputation management.

I would agree, and add that when you join climate change, Industry 4.0 and the generation gap into this equation you have uncharted territory that demands immediate action to protect and enhance reputations.

His view: “The COVID-19 pandemic has created an environment where customers may not blindly trust a new product, service, or business. As a result, reputation management and effective communication strategies for businesses have become increasingly important.”

So, how do you start?

Madan Bahal advises that with new market realities emerging in the post-pandemic world, a strong line of communication between a business and its customers can instil positivity and reliability around the brand.

“The post-pandemic business environment will be one represented by growing geopolitical complexity, a more polarised society, and the chance for backlash if the popular sentiment is hurt.”

His advice works for startups and mature companies alike, saying they have to navigate these challenges through effective communication and reputation management.

Despite the rising popularity of public relations (PR) services for business communications and crisis management, some fledgeling companies are still reluctant to give PR a serious thought.

According to Madan, there is often temperamental incompatibility between young startup founders and PR firms due to a mismatch in expectations. However, founders eventually realise the importance of public communication for attracting talent, announcing fundraises, and dealing with crises, he added.

Madan has been an entrepreneur since 1981, co-founded Adfactors PR in 1997. Adfactors PR is India’s largest PR firm, serving over 300 retained clients across 40 cities in the country.

Madan compares startups to fragile organisms vulnerable to risks in a complex environment.

“For these startups, public relations and reputation management add a ring of protection, trust, and credibility. This gives them a competitive advantage across the board,” he said.

Madan highlighted the positive and negative perceptions the media held about the young startup founders. “Startups were perceived to be transformational and big contributors to economic growth, however, they suffered from insensitive hire-and-fire policies or toxic work culture,” he said.

Now, getting down to what you do when facing all these challenges – here is his list of seven actions which can protect and build reputations:

  1. startups should view every action from the lens of public interest
  2. invest time in maintaining healthy media relations
  3. establish listening posts to guide and alert potential reputation risks
  4. place CXOs, CFOs, or CHROs as reputation leads
  5. build crisis protocols to enable rapid responses
  6. make the purpose of sustainability, diversity, and inclusion the guiding principles for actions and communications
  7. realise a sincere apology goes a long way in reputation management

It is hard to imagine any organisation which would not greatly benefit from his advice.

(Thanks to YourStory India and “TechSparks 2020” for much of the above content)

Modi pushing hard on reducing imports and increasing exports

Indian Prime Minister Narendra Modi set out an ambitious plan to boost exports while reducing imports – and it is working.

According to data collected from the Centre Government, India’s exports to the USA amounted to USD 5.1 billion in September 2020, 15.5% more than the figures for the corresponding month (USD 4.4 billion) in 2019.

In addition, imports from the United States decreased by a substantial 34.3% to USD 1.8 billion in September 2020, compared to USD 2.8 billion in September 2019.

Similarly, in the period from April to September this year, imports from China, one of the largest producers of commodities across industries, decreased to USD 27.4 billion. Therefore, imports have decreased by 24.5% from the USD 36.3 billion amount for the same duration last year.

Meanwhile, Indian exports to China increased by 26.3% to hit USD 10.6 billion in the above-mentioned period, a substantial increase from USD 8.4 billion for the period April-September 2019.

It’s a stunning turnaround and more is to come…

Suzlon Group appoints new CEO for next stage of renewable energy

Suzlon Group, India’s largest renewable energy provider, has announced that it has appointed Mr. Ashwani Kumar as its Group CEO.

This is a significant announcement for sustainable energy and India in particular.

The Suzlon Group is one of the leading renewable energy solutions providers in the world with a global presence across 18 countries in Asia, Australia, Europe, Africa and Americas. Headquartered at Suzlon One Earth in Pune, India; the Group is comprised of Suzlon Energy Limited (NSE & BSE: SUZLON) and its subsidiaries.

Ashwani Kumar, with over three decades of experience in the areas of projects, business development and finance at leading Indian Power and Infrastructure companies is a Mechanical Engineer, and an alumnus of IIM Bangalore and The Harvard Business School.

Mr Tulsi Tanti

Mr Tulsi Tanti, Chairman and Managing Director, Suzlon Group, is the driving force who has built Suzlon into a major global wind energy player.

Mr Tanti is picture sixth from left when he presented the Australia India Address in Melbourne.

Four Indian startups become unicorns during Covid19

Great Indian story of succeeding in tough times – four Indian startups, Postman, Nykaa, Unacademy and Razorpay, have become unicorns amid covid-19.

In the venture capital world, a “unicorn” is a startup with a value of $1 billion.

The nation is on track to have 8 unicorns in 2020, almost the same number of additions as in 2019.

According to a study titled ‘Covid-19 and the Antifragility of the Indian Startup Ecosystem,’ India is on its way to having 100 unicorns by 2025.

The study was launched by TiE-Delhi, a global non-profit organisation supporting entrepreneurship in collaboration with Zinnov, a global management and strategy consulting company.

It revealed that total funding fell by 50% compared to pre-covid levels during the lockdown. As a result, around 40% of start-ups have been adversely affected and 15% have been forced to discontinue operations.

The third largest start-up ecosystem in the world was jolted by the multi-dimensional pandemic and the effect was extreme during the lockdown period from March to June 2020. However, the rate of recovery, both in demand and in investor sentiment, was faster than anticipated as the economy opened.

Why is India doing so well in tough times?

During Covid19 there has been a big move to digital consumption – so startups in education, healthcare and trade have boomed.  

Indian PM Modi and Australian PM Morrison could create “Indian Ocean Food Bowl” – India exports up

Not many in the west think of India as a food exporter. But it is – and the numbers are going up.

This blog Into India has called for greater collaboration between India and Australia to become the “food bowls of the Indian Ocean Region”. The combination of the know-how in both countries could produce major agribusiness innovations, especially in horticulture and hydroponics.

Indian exports of essential agricultural commodities for the cumulative period of April-September, 2020 has increased by 43.4% to US$ 7.34 billion.

The major commodity groups doing well in export include Groundnut (35%), Refined Sugar (104%), wheat (206%), Basmati Rice (13%) and Non-Basmati Rice (105%).

It’s a great outcome for the Modi Government.

To boost agri exports, the Government created an Agriculture Export Policy, 2018 which, among other things, provides for a cluster-based approach for export-centric farming of cash crops like fruits, vegetables, spices, etc. It is working!

Recently, the Government has also announced an Agri Infra Fund of US$ 13.70 billion to improve the agri business environment – so more export growth is on the way.

India to be focus of Canada’s giant pension fund investments

 Canada’s massive pension fund plans to invest up to a third of its funds in emerging markets over the next five years and India is an important destination, according to a senior executive. 

The Canada Pension Plan Investment Board (CPPIB) manages about 434.4 billion Canadian dollars ($329.75 billion) as of June 30. A bulk of its investments are in North America — around 34% of total assets are allocated in the United States — followed by Asia. 

“We expect to invest up to one third of the Fund in emerging markets by 2025 and India is a key component of that,” Suyi Kim,  CPPIB’s Asia Pacific head, told CNBC by email.

“Our investments in India span different asset classes including infrastructure, real estate, public and private equities, funds and co-investments and credit,” Kim said, adding, “We see domestic consumption, technology and increasing demand for infrastructure to support the growth underpinning many of the themes and opportunities we look at in India.”

CEO Mark Machin recently told CNBC that the pension fund was reviewing its bond holdings in light of near zero interest rates. watch nowVIDEO02:50Near zero interest rates are challenging for Canada’s massive pension fund, CEO says

CPPIB has an office in India. Some of its investments thereinclude a stake in Kotak Mahindra Bank as well as $225 million to the India Resurgence Fund, which invests in distressed assets in the country. 

In December, CPPIB said it agreed to invest up to $600 million in India’s National Investment and Infrastructure Fund that included a $150 million commitment in NIIF’s Master Fund and co-investment rights of up to $450 million in future opportunities.  

Time for Australian superannuation funds to increase commitment to India?