China and India show there are merits in both order and chaos



While I have made several trips to India over the years and been to China often, including three times last year, I had never until last month visited both back-to-back. The advantage of doing that is it gives you a fresh and clear sense of the differences.

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Last Updated: May 22, 2011

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The good news is India has made considerable progress in improving its infrastructure over the past decade, and the number of homeless in the streets in the major cities appears to have diminished.

In a country of 1.2 billion people, half of the population can live in poverty and there can still be a vibrant economy.

India's middle class is larger than the entire population of the US. Still, only 10 per cent of the population pays taxes and a relatively small percentage works at conventional jobs, many for the government.

This is a country of shopkeepers and small-time entrepreneurs, but there are a number of world-class companies, some of which I visited on this trip.

The contrast with China is striking. Because it has an authoritarian government, it can deal with some of the problems it shares with India quickly and decisively.

Older, run-down housing and office structures have been torn down, and roads have been rerouted and rebuilt. There are no visible homeless.

The emphasis on infrastructure and export-oriented industries has resulted in China accounting for close to 20 per cent of US imports while India accounts for less than 2 per cent.

One day we visited several retail establishments in parts of Shenzhen. The city has changed totally since it was established as a manufacturing centre just 80km from the border with Hong Kong.

Today it is a modern metropolis of office and apartment blocks with wide, beautifully landscaped highways and carefully planned open spaces.

The sprawling, orderly urbanisation of Beijing continues to impress. New office and apartment buildings stretch for mile after mile along wide avenues lined with greenery. I discussed the possibility of a housing bubble with almost everyone I met and nobody seems to think it is a serious issue.

Perhaps the most significant difference between my meetings with company executives this year and last was the view on opportunities in the Chinese domestic market.

Many companies are projecting earnings growth of 25 per cent or more.

China and India are bifurcated societies. With more than 1 billion people in each country, there are several hundred million in each place living lives comparable with those of middle-class people in the US or Europe.

At the same time, both countries have hundreds of millions of people living in rural poverty.

Unfortunately, India's government lacks China's flexibility and decisiveness. India is much more dependent on the entrepreneurial skill, capital and innovative ability of the private sector to make progress.

China operates on a series of five-year plans designed to expand GDP and create economic opportunity for its population. India has the objective of improving its infrastructure, but the government lacks the authority to make rapid progress.

The result is that Indian cities seem afflicted with a kind of dusty constructive chaos. Plenty of business is being done, but traffic can be brutal, garbage is everywhere and street begging is a depressing distraction.

In spite of its problems, India is expected to grow at a high single-digit rate. Software and call centre companies do not require a modern infrastructure, and there are banks, steel, construction, property, transport equipment and natural resource companies that are doing well.

The major difference between China and India is in how each approaches the future. Fifteen years ago, China was a relatively unimportant, struggling economy.

Through effective central planning and execution it now accounts for over 9 per cent of world GDP and has passed Japan as the second-largest economy in the world.

And it isn't stopping there. Whereas China recognises its major challenge is to give its rural young the chance to escape the poverty of the agrarian past and is hoping to do this by providing manufacturing jobs rather than entitlements, India's government appears to be less active in developing economic opportunities.

Most Chinese believe the order in their system is a strong positive. In India, many believe the chaos is what gives the country its character.

"India's slums are not like today's American slums. They are places of hope, not hopelessness," says the author and former banker Sanjeev Sangal.

Partha Mukhopadhyay of the Centre for Policy Research, a New Delhi think tank, says: "If you strive for too much formality, if you try to clean things up too much, you might end up with cities that are dysfunctional in a different way."

So there is the dilemma. There may be no single right answer for both countries; it may be that order is right for China and chaos is right for India.

Right now, what each has is working and neither condition is likely to change in the future.

Byron Wien is a vice chairman of the Blackstone Group

ASIAN RUGBY CHAMPIONSHIP 2024

Results
Hong Kong 52-5 UAE
South Korea 55-5 Malaysia
Malaysia 6-70 Hong Kong
UAE 36-32 South Korea

Fixtures
Friday, June 21, 7.30pm kick-off: UAE v Malaysia
At The Sevens, Dubai (admission is free).
Saturday: Hong Kong v South Korea

At Everton Appearances: 77; Goals: 17

At Manchester United Appearances: 559; Goals: 253

Fourth-round clashes for British players

- Andy Murray (1) v Benoit Paire, Centre Court (not before 4pm)

- Johanna Konta (6) v Caroline Garcia (21), Court 1 (4pm)

COMPANY PROFILE

Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside

The biog

Name: Timothy Husband

Nationality: New Zealand

Education: Degree in zoology at The University of Sydney

Favourite book: Lemurs of Madagascar by Russell A Mittermeier

Favourite music: Billy Joel

Weekends and holidays: Talking about animals or visiting his farm in Australia

MATCH INFO

Uefa Champions League semi-finals, first leg
Liverpool v Roma

When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome

Switching sides

Mahika Gaur is the latest Dubai-raised athlete to attain top honours with another country.

Velimir Stjepanovic (Serbia, swimming)
Born in Abu Dhabi and raised in Dubai, he finished sixth in the final of the 2012 Olympic Games in London in the 200m butterfly final.

Jonny Macdonald (Scotland, rugby union)
Brought up in Abu Dhabi and represented the region in international rugby. When the Arabian Gulf team was broken up into its constituent nations, he opted to play for Scotland instead, and went to the Hong Kong Sevens.

Sophie Shams (England, rugby union)
The daughter of an English mother and Emirati father, Shams excelled at rugby in Dubai, then after attending university in the UK played for England at sevens.

Tips for newlyweds to better manage finances

All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.

Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.

Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.

Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.

Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.

Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.

SPECS: Polestar 3

Engine: Long-range dual motor with 400V battery
Power: 360kW / 483bhp
Torque: 840Nm
Transmission: Single-speed automatic
Max touring range: 628km
0-100km/h: 4.7sec
Top speed: 210kph
Price: From Dh360,000
On sale: September

COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

Brief scores:

QPR 0

Watford 1

Capoue 45'+1

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Part three: an affection for classic cars lives on

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

What is a Ponzi scheme?

A fraudulent investment operation where the scammer provides fake reports and generates returns for old investors through money paid by new investors, rather than through ligitimate business activities.

THE LOWDOWN

Romeo Akbar Walter

Rating: 2/5 stars
Produced by: Dharma Productions, Azure Entertainment
Directed by: Robby Grewal
Cast: John Abraham, Mouni Roy, Jackie Shroff and Sikandar Kher 

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

5. Zakat 

Suggested picnic spots

Abu Dhabi
Umm Al Emarat Park
Yas Gateway Park
Delma Park
Al Bateen beach
Saadiyaat beach
The Corniche
Zayed Sports City
 
Dubai
Kite Beach
Zabeel Park
Al Nahda Pond Park
Mushrif Park
Safa Park
Al Mamzar Beach Park
Al Qudrah Lakes 

A QUIET PLACE

Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

UAE athletes heading to Paris 2024

Equestrian

Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).

Judo
Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).

Cycling
Safia Al Sayegh (women's road race).

Swimming

Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics

Maryam Mohammed Al Farsi (women's 100 metres).