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July 09, 2006

The Godrej view on China

Businessworld has an interesting interview with Gordrej Chairman Adi Godrej on the group's China stragegy.

Everybody understands China’s dramatic economic success and people are very curious about it — what works, what doesn’t work... . But we go overboard in comparing ourselves to China. I think we run ourselves down a bit more than we should. There are certain things we are much better at doing. For example, though China has very good labour productivity, India has much better capital productivity. I have also met with fair-sized Chinese businesses, and I think that management processes in our private businesses are far superior.

China and India complement each other rather than being competitive as they have different advantages and skills. The well-known mantra is that China is the factory of the world and India is the back office. I think this sort of compartmentalisation is incorrect. No country of India’s size can develop adequately if it embraces this compartmentalisation. We have to be more efficient in services, manufacturing and agriculture if we want to grow rapidly.

Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.