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IDC says China can catch India as an outsourcing center

Posted by: Bruce Einhorn on July 5, 2007

Is India’s software services industry light years ahead of China? Or are the Indians about to lose their lead to the up-and-coming Chinese? Over the past few days, two very different answers. According to a new report from IDC, the Indians have reason to worry. The research firm, headquartered in suburban Boston, has announced that its analysts have come up with a new “Global Delivery Index” that, according to an IDC statement, “compares 35 cities in the Asia/Pacific as potential offshore delivery centers, based on a comprehensive set of criteria such as cost of labor, cost of rent, language skills and turnover rate.” This new index puts Bangalore No. 1, with Mumbai No. 3 and Delhi No. 4. (The only non-Indian city among the top four is Manila, at No. 2) But “Chinese cities are on the rise and closely nipping at India’s heels,” IDC adds. “IDC forecasts that Chinese cities will overtake Indian cities by 2011 due to massive investments made ( e.g. infrastructure, English language, Internet connections, technical skills, etc) which are favorable towards offshoring.”

But then there’s this next-day story in India’s the Business Standard. “China outsourcing sector no match for India,” the headline declares. The writers call the idea of China challenging India a “myth” and cite a recent Forrester report saying that the threat from China is “diminishing gradually with issues like language, attrition and intellectual property (IP) protection continuing to haunt multinationals.” For years, China boosters have been saying that just give them time and they’ll catch up to the Indians, but as the Business Standard reports, in 2006, the Chinese IT services industry had a paltry $7.7 billion in revenue, compared to India’s $39.6 billion industry. “China has the potential but India has the edge” the newspaper quotes Nasscom Vice-President Ameet Nivsarkar boasting.

How then to explain IDC’s confidence about China? The firm is not predicting that any Chinese company is going to reach the scale of Wipro, Infosys or TCS soon. However, there’s no doubt that Indian companies are increasing their presence in China. (See, for instance, this story that I wrote back in November about TCS.) As the Chinese improve the environment for outsourcing in the ways IDC predicts (and as rising wages in India lead more companies to look elsewhere) maybe China will become more competitive - and maybe it will be the Indian companies with operations in China that will be the biggest winners.

Reader Comments

George David

July 5, 2007 4:19 PM

Probably more than 90% of India's IT industry is mainly service outsourcing and its size is about $39.6 billion based on your article.
China's software industry alone is already more than $60 billion in 2006 (according to
If counting other IT sectors like semiconductor and telecom, China is way bigger than India. China's IT industry has been mainly driven by domestic demand. Outsourcing was not the focus and priority at all. There is no reason why China can't beat India in this area if it is determined to contend the IT outsourcing market. Look at the international college programming competition:
In 2007, 12 Chinese Univ. ranked in top 44 with Tsinghua No. 2 Shanghai Jiaotong No. 8. While India only got its most famous IIT ranked 44th. Look back into history, India barely shows up in the list. While China just started participation a few years ago and it is already one of the most competitive one among all.


July 5, 2007 9:37 PM

I m trying to keep it as general as possible.
George I have no idea where the site got the info from, but it's not correct.

China is miles ahead on India in manufacturring, but India is beating China in IT, no doubt about it.

China has a long way to go before it developes the large softskills that India has.
Moreover, India is also making a headway into infrastructure and manufacturing.

A really interesting point that I believe will be very important in the future will be human rights and environmental protections. China is a DISASTER to say the least on both fronts. Over a period of time as the world population becomes more literate, people with the spending power will cease to purchase products made by people treated as slaves and paid 10 cents/hr.

anyways, lets see what happens
i guess this is another 1 of Bruce's India vs China thing. When u ever gonna learn that you can't compare apple with banana?


July 5, 2007 11:46 PM

No matter what China does or does not, India has been not, and will be not the reference for any actions. India media have been claiming "China will NEVER catch up with India in BPO or IT space" and "China is 20 years behind India in IT" (Both were the most recent titles of articles in Times of India) I guess China is really enjoying to know that "China is 20 years behind India in IT or software." The question is, does China even care about what Indians would think?


July 6, 2007 1:07 AM

nice one


July 6, 2007 2:50 AM

As China's economy grows quickly in the next couple of decades, their salaries wil increase rapidly as well. China is growing quickly in all sectors of the economy. Right now the average GDP per capita of China is way more than India's, eventhough India's economy is also growing. Besides the IT workers in India earning decent salary, the others are only earning 10cents/hr, since the illiteracy rate in India is so high.

brennig james

July 6, 2007 3:54 AM

I am pretty deaf and a line that also carries broadband is poor for audio from India,so audio outsourcing to India is often a failure. Still China will be worse

Crunk City Cobras

July 6, 2007 9:12 AM

Manila #2! Yea!

Billy G

July 6, 2007 9:18 AM

China is a commercial giant just like the other ‘true’ superpower hence this comparison with India is almost comical. If Shanghai really wanted the ‘chickenfeed’ outsourced IT market, it would dominate the market with a matter of years. However, back to reality, currently China has got better things to do, such as shoot satellites out of space, rather than chasing fourty billion dollars...


July 6, 2007 10:48 AM

I m working for a chinese multinational company.

How I wish that people would understand and respect each other and do business for mutual good!

I suggest you guys pay a visit to China and feel the real pulse of China.

Media can lie, both Chinese and why not see for yourself and then show us your opinion?

China welcomes friends of all sorts


July 6, 2007 11:05 AM

The IDC report was prepared by a Chinese consultant. It looks at potential based just on physical infrastrure, rather than intellectual capital. If he was right, Bangalore would be dead long ago - based on parameters that he considered. As one Western executive quoted by Forrester notes, China would have to be 20% cheaper than India to be viable. And nearly all surveys report that wages for equivalent skills are much higher in China than India and hiring talented skill is four times more difficult in China. Moreover, wages of top rated Indian professional with years of experience in proprietary vendor technologies and managing hundreds of man-years of projects can not be compared with those who lack these attributes. Bottlenecks in growth in Bngalore are of physcial infrasture, an area of weakness that is not very relevant for the growth of the IT sector. In the area of Internet access, vendor capability and maturity, and skill levels there is no bottleneck in India. Moreover, India has over 10 cities that are now aggressively participating in offshoring, besides Bangalore. It is easier to add new resources in other cities in India for vendors and customers than shift it to China.


July 6, 2007 12:51 PM

"China is 20 years behind India in IT" so that mean China's IT is where India's IT was in 1987?! Hard to believe, China has three cities Beijing, Shanghai, and Dalian in number 5, 6 and 7 so still top ten in outsourcing.

Also, Chinese software companies are mainly for China own internal market and it is growing so fast that many India companies like Wipro and TCS are opening office in China.

India outsourcing is only helping the upper caste and leaving the rest of the population unaffected.

George David

July 6, 2007 1:25 PM
It is a speech given by Vice President of the Chinese software Industry's association and CEO of Usoft in Int'l Software exhibition China 2007 held in Beijing from 6/14 - 6/16.
If you google translate the above link, you will Know what he is talking about. is China's #1 internet portal, listed in NASDAQ as SINA. Here is part of the speech:
".....In 2006, the software and its service industry has reach total revenue of 480 billion RMB, which has reached the goal of surpassing India's...."


July 6, 2007 2:28 PM

Among the emerging economies, Vietnam is much better than India to challenge China in the coming years. There are a few key factors:
1. Vietnamese are disciplined unless undisciplined and chaotic Indians e.g. urinate and defecate on Bombay street
2. Vietnamese average IQ is close to 100 while Indian’s national average IQ is at 81
3. Vietnamese are physically and mentally tough unlike weak Indians who do not even win a single summer Olympic medal in 30 years and get butt kicked by everyone!

peter pham

July 6, 2007 3:11 PM

What will Americans do then when these two countries fiercely competing for outsource jobs
in every sector of economy ?

Fishing ?

IT Retiree

July 6, 2007 3:32 PM

Can someone from the big Indian software companies explain why their students do not perform well at the International Collegiate Programming Contest. Prior to my retirement I have notice that the Indians coming over to our company to write software, maintenance, Y2K,..., etc. really did not understand what they were doing. There were many countless empty promises. Management said nothing because they were cheap but not really up to par. Most were junior level analysts with weak analyical skills.

By the way I am not surprised at the performance of the other nations. Most of my East European (Russians) collegues were excellent and the east Asians: Chinese, Korean & Vietnamese.

IT Retiree


July 6, 2007 4:46 PM

The "Hilarious!!!"'s post showed a typical view of Indians, which makes you wondering do they know what's really going on in this new world. While Indians have been so happy with their position at the very bottom of the IT value chain, Chinese have been able to participate across the full spectrum of the chain from IT service to defining new IT standards. On the front of manufacturing, China has been able to move up the value chain from toys to computers, autos, and poses some serious challenges to the traditional western powers, while India has such a long way to go in this area.

All in all, China and India are in different classes. Maybe someday (just maybe), when India's export catches up with Taiwai's, then catches up South Korea's, then catches up with Japan, then it's the time to have meaningful comparisons between those two nations.


July 6, 2007 6:06 PM

When it comes to services, I think most of China's growth will be on the domestic front.

IP protection and respect for copyright are non-existent in China. Between that, Communist party censorship, and corruption, many companies are justifiably leery in regards to outsourcing to China.

Eastern Europe and, to a lesser extent, Russia, are in a far better position to compete for these jobs thanks to a HUGE advantage when it comes to English skills.

... and you can't base anything on college programming competitions. The Chinese are known to spend lots of time preparing for the competition and end up lacking real-world skills. Americans don't fare that well in the competition but excel in the business world since they spend time developing business acumen.


July 6, 2007 6:21 PM

The Indian IT giants are opening base in China to cater growing domestic IT market than to establish outsourcing base in China. Chinese software engineers are as expensive as Indians and it makes little business sense to relocate to another expensive place.

In IT China cannot compete with India just on the basis of cheap labour. Unlike manufacturing, software business needs English speaking, highly skilled labour which is in short supply (in China, as well as in India) and come at a premium.

Unskilled labourers from the farmland, who are paid a pittance, can be directly employed in manufacturing but the same is not true in software. Even after 15 years of head start, software engineers are in short supply in India and getting expensive.

Whoever can provide cheap and quality labour will win this battle.
Can the Chinese surpass this Great Wall?


July 6, 2007 9:22 PM

there is no doubt that india is ahead china in IT outsourcing industries because of English superiority. Most of india software companies are doing low-end software development (code tester, code programmer, software QA, and software support). eventually chinese will catch us up once they improve their english acquisition. the problem with india in the long run . most of engineering colleges in india are substandard.


July 6, 2007 11:02 PM

Am I the only one who gets depressed by reading this. It seems like the only IT jobs that will be available soon in the US will be hands on break fix. With the hardware getting color coded now, any idiot making $9 and hr will be able to do it.

Hot dog

July 7, 2007 1:31 AM

India and China can coexist, it is not as if they are just competitors out to kill each other they can co-operate too. India will catch up in manufacturing china will catch up in outsourcing. It will result in the job growth shrinking in west in all sectors


July 7, 2007 3:32 AM

The Indian IT giants are opening base in China to cater growing domestic IT market than to establish outsourcing base in China. Chinese software engineers are as expensive as Indians and it makes little business sense to relocate to another expensive place.

In IT China cannot compete with India just on the basis of cheap labour. Unlike manufacturing, software business needs English speaking, highly skilled labour which is in short supply (in China, as well as in India) and come at a premium.

Unskilled labourers from the farmland, who are paid a pittance, can be directly employed in manufacturing but the same is not true in software. Even after 15 years of head start, software engineers are in short supply in India and getting expensive.

Whoever can provide cheap and quality labour will win this battle.
Can the Chinese surpass this Great Wall?


July 7, 2007 6:21 PM

my fellow comrades in china will nationalize all MNCs one day to be Chinese government owned! go China! then the west will regret supporting the falung gong and tibetan suppresing commi pigs...


July 7, 2007 6:53 PM

Some concepts need be cleared for some readers here:

Software industry =/= IT

outsourcing =/= Software industry


July 7, 2007 8:27 PM

I have been reading few articles in the 'Asia section' of Businessweek and I noticed most of them are devoted to China and India in an attempt to compare the two countries in some way or other. We all know that both China and India are developing countries and comparing both of them will be no different than comparing apples to oranges.
However lately, I see many self proclaimed pundits who write about China and India with conviction and questionable authority that it is not even funny. In this case, the author Bruce Einhorn has succeeded in writing 'another' article with controversial title that stirs up the pot. Publishing such articles - if Businessweek hopes to increase memberships and in turn increase magazine sales - is silly. However, if that's the case the author has succeeded in his objective and secured another paycheck for himself.
We know both China and India continue to grow and they face unique challenges in their paths. It does not matter if they grow with the help of a good manufacturing base or a strong outsourcing industry. I sincerly hope that the lives of citizens in China and India improve and they all get a fair chance in getting good education and healthcare. In pursuit of all this if other big objectives are attained; great! It does not matter who crosses the finishing line (if there is any) first. Meanwhile, we will continue to read more articles with controversial titles about these two countries. Be it technology, economy, politics or business. As long it sells we will see more of it.


July 7, 2007 11:42 PM

Its funny to read YinduAsan's comment.

"The question is, does China even care about what Indians would think?"

Its funny that she doesn't care but went searching on the Times Of India to look for comments that she doesnt care about !!!

Rich Chis

July 8, 2007 1:54 AM

I actually don't mind the outsourcing of manufacturing jobs to China. However, it bothers the crap out of me that we're outsourcing IT jobs to India. Indian Call Centers are downright awful. I've never had a good experience with them. Their English is not even up to par with 5 year olds and the cultural differences make communicating difficult. I can imagine that China is just as bad when it comes to English and hope that we stop outsourcing white collar jobs over there.


July 8, 2007 6:22 AM

Although china has more people than india , and a slightly higher growth rate, china will take a very long time to catch up to india in the IT field.

The reason: Soft skills...especially the command of english.

Indians have 2 HUGE advantages over the chinese:

1. Most indians speak english ( and quite well too).
2. Indians understand ( and appreciate) western culture. ( as evidenced by the "westernizing" of most large indian cities). I am not just talking about infrastructure improvements, opening new macdonalds, starbux etc...; I am talking about a westernized mindset ( this is something that china does not yet have).

The chinese ( led by , you guessed it, the chinese govt) has realized the above 2 points and is aggressively educating its citizens in the english language and the western societies ( i.e. mindset etc). However, these are very difficult to aquire high level of competence , and therefore, for the next 10-15 yrs, india will have a clear ascendancy over china in IT and T industries.

James Keegan

July 8, 2007 8:30 AM

Aha...and how will the Chinese catch up with the Indians without American support and without access to the American market.

The biggest companies in this game are still American, and no doubt some of those brilliant programmers from Tsinghua and also East European Universities will join these organizations; working for peanuts and almost slavishly for their American masters.

The question here is not about India. The question is the quest for supremacy in global IT between the U.S. and China. India is only incidental to the picture.

James Smith

July 8, 2007 8:34 AM

Three guesses: Which IT services outfit leads the pack in India. No, it's not TCS, Infosys, or Wipro. The leading player in India is IBM.: As posted on Steve Hamm's blog.


July 8, 2007 2:13 PM

India does dominate the lower-end of the IT market, but frankly, the Chinese are more technically competent on avarage, so I see no problem for them to dominate the higher-end sectors, such as R&D.


July 8, 2007 3:39 PM

I think this whole debate is an American invention to get China and India to be at each others throats, while Americans gloat about Asian countries fighting each other.

What the Americans are really afraid of is what happens when China and India come together...the two nations not only share common cultural values and traits but are also contiguous neighbors.
The benefits of China and India merging to form a common economic zone or even a country are manifold. A common country would remove the needs for borders and from Dalian to Kanyakumari, Chindia would be one. That ofcourse, is the American meanwhile they are hell bent on creating another middle-east and Bruce Einhorn is the man for the job!!!

Suprizingly such sensational articles and headlines are emphasized in american media.


July 8, 2007 5:31 PM

China is indeed a very polluted country, but that's not proving that India isn't one also. Besides the wages paid in India is very close to China's. Also China, considering its scale and talent, could soon rise to the top in any industry they want, it is as simple as that. Look at the ways they've grown in the past 20 years.


July 8, 2007 11:40 PM

In my opinion, China is way ahead of India in terms of infrastructure and overall college education. China's IT is not service outsourcing oriented. But service outsourcing is a low margin business anyway and less viable in the long run. If you ever personally visited both India and China, you would see the huge infrastructure differences: (1) roads, highways and traffic, (2) electricity, (3) overall college education, (4) inner city slums or lack of, (5) communication - cell phones and high speed internet, (6) ease or cost of starting a service oriented business.


July 9, 2007 12:37 AM

The Reality Behind the Hype!

It's fascinating how both sides have put forth bold arguments and statements. I, on the other hand, want to share share some facts and observations that will debunk some myths and hopefully, encourage a more insightful debate.

I'm an outsourcing advisory consultant and recently returned from my China trip, where we were assessing the China's Outsourcing/Offshoring capabilities and comparing it with those of India.

Here is the quick & dirty version of my findings:

Conclusion: Even though China is very committed to building its competitiveness in IT & Business process outsourcing by creating a world class IT infrastructure, providing lucrative benefits (tax & infrastructure subsidies), and reforming the education system, it is still years behind India for its (India's), first mover advantage (business maturity), large English speaking & IT oriented workforce, and a complementary local economy.


The positives for China:

1. Infrastructure - China has built an impressive IT infrastructure with cutting edge technologies and swift turnaround times. Even though, India has made rapid strides in this area, it still lags behind China.

2. Government will & support - The government is providing tremendous support to the local companies and global investors to set up IT & BPO shops. It recently launched a program - 1000-100-10, where it aims to establish 1000 outsourcing companies, serving 100 global clients in at least 10 cities across China.

The Challenges for China:

A. Limited supply of suitable workforce - One of the earlier blogger was touting China's university system and portrayed it as the driving force of IT Outsourcing. I heard another such claim on my visit, that 5 MM engineers join the work force in China and thus, provide supply to feed the IT outsourcing industry.

The question is NOT that how many graduates join the workforce, but the crucial question is "how many of them are fit to join a global workforce (defined as an employee of an MNC/local co. and serving global clients) or even, how many want to join the outsourcing industry?

My observations were very alarming:
1. Out of the graduating students, only a small percentage (10-20%) is deemed fit to be employed by an MNC/company serving global clients. This is the reason that the unemployment rate amongst the recent graduates in China is at an historic high. This means that there is large percentage of graduates who lack the skills and the trainings to be absorbed by the market.

This leaves companies going after the same small percentage of workforce, which commands a high premium and hence, significantly reduces the labor arbitrage. What makes it even worse is the lack of companies willingness to invest in training the fresh graduates, since they are afraid of loosing them to their competitors after they have made the investment in training, and hence resulting in a vicious cycle of low supply and high prices (for suitable workforce).

3. Willingness to join outsourcing industry - Outsourcing is not considered a plum career opportunity (as it is in India) in China. I met students at the Tsinghua University (amongst other universities), who consider outsourcing to be a low end career opportunity and despise being the cheaper back office for the western world.

They want to focus on innovation and work for companies like Apple and Google. With Chinese government's mandate to be the most innovative country (don't know how they will measure this) in the world by 2020, it will be a tough act to balance being "the factory", "the back office" and "the R&D hub" of the world, since these goals involve somewhat different focus at the grass roots levels.

On other hand, In India, outsourcing is considered an attractive career (Infosys is a premier employer, IBM will soon be the largest employer, soon followed by Accenture) that provides global opportunities, to which the Indian's adapt more comfortably because of their language capabilities and affinities.

B. Lack of Maturity - Chinese outsourcing industry lacks maturity (as compared to India's) due to inadequate exposure to global business practices, weather it’s the US GAAP or sophisticated banking process. E.g.: people still don't use checks as a mode of payment in China. This makes it harder for companies to outsource processes that workers are not exposed to, locally.

C. English Language Capabilities: This is still a huge challenge for China. Although China has had success in serving (call centers, etc) the Japanese and Korean market due to its proximity and cultural similarities, it has a long way to go before it comes in par with India's English speaking capabilities.

No matter what any one says, this will continue to be single biggest deterrent for offshoring (especially, voice based services) to China.

If it takes you 15 mins. & 3 servers (personal experience) to order a meal in a 5 star hotel, then you can imagine 2 people (1 in China and 1 in the US) trying to collaborate across a 12 hour time zone. Please note that I'm not saying that it is not being done (or can't be done), but that it cannot be done in the same numbers as it is being done in India. (At least, as of now)

Having said this, I'm sure that China will emerge has a strong player in the outsourcing market with a few niche services such as BPO for Japanese & Korean markets, and IT services such as coding and testing, where it can challenge India. However, I DON'T see enough evidence to believe that it can overtake India's current leadership position in this area, in the next decade.

I believe that rather than thinking: India VS China, we should think: India and China - because both the countries bring their unique strengths to the table and can achieve a lot more by collaborating and complementing each other (& forming their own niche in Outsourcing) than by competing for the same pie.

Net, Net - As a buyer of outsourcing services and a global business, you cannot ignore either China OR India, and will only win by including a complimentary mix of both the countries in your offshoring portfolio. And for others, who still have the burning desire to pronounce the winner of the outsourcing world, they should look for the crystal ball that might give them a sneak peak into the future.


July 9, 2007 2:12 AM

My roots are in Europe and it's funny to see this "war of talents" in China and India. In Europe one can speak fluently 5 languages, play violin, run successful business, and never be called as a talent. It's just normal, a person is just interested about those topics. To be talent is something more, maybe Noble prize winners are talents. Blog:


July 9, 2007 2:50 AM

Most Chinese can speak and understand 4~5 Chinese dialects, now that's talent :P.

Vishal Malhotra

July 9, 2007 2:57 AM

It no longer matters who speaks what, how and from where. The give and take in this ever shrinking world will force us to look at mutually beneficial relations, be it Indian companies working through China or Chinese supplying their manufacturing goods. It succeeds only because both are eventually gaining.
The analyst should get a report out showing such relations amongst other countries too and we should see what works for 'US' rather than 'ME'.

Bhoo Thirumalai

July 9, 2007 6:56 AM

Let's not talk about India Vs China. Let's talk about the overall need / demand for IT in the world.

The overall need for IT in the world - including the need for integrating diverse systems in the developed world and the need for getting new computerized systems in the developing world - the need for IT talent is ENORMOUS. I really believe that this need is not going to deplete in the next 20 years.

So, there is going to be opportunity for trained IT engineers - irrespective of where they are. I do not for a moment believe that the "real" IT engineers in the USA or Europe could have lost jobs because of outsourcing. Because, the actual demand for IT work, I believe, far exceeds the supply of all the countries put together - given the enormous task in front of us - of pulling all our systems into computerized systems and get them integrated enough.

This is a way forward for every country, and I sincerely believe that - any loss of job in any country is incidental - and not a trend!

What is happening, if anything, is this: Today - when a student in India is trying to choose a graduate studies - let's say Mathematics or Logical thinking is not his or her strength - and arts or history is his or her passion and interest - Due to sheer parental and peer pressure, such young people are choosing to study IT. They do not suddenly become better in logical skills and mathematical skills, and bright people among them end up getting decent jobs irrespective of the apparent lack of this inner strength. And, IT companies are surface-training these people to make them just to "acceptable" levels.

These are not "real" IT engineers! These are people who are just making use of the current opportunities! In the long run, this course will correct itself, and some of these "unreal" engineers are likely to lose their jobs.

Not because there is less demand, but because they are not as suitable for the demand.

I do not think "real" qualified IT engineers - be it in China or India or the USA will lose their jobs in the next 20 years!

So, it does not matter where such talent is physically located.


July 9, 2007 7:54 AM

china has infrastructure advantage, India as English advantage ... unless indian politicians feel the pinch ... dragon can takeaway the deals .... challenges in india are 1. infrastructure 2.Human resource 3.clash of egos ....

we need to be aggresive and develop 3rd grade cities .. com'on indians wake up

A. Scott

July 9, 2007 10:01 AM

Me too! Manila #2, Yeah! That would mean more jobs for the newly grads and career shifters, when there were few and even none before, that is, 3, 5 and 10 years ago.


July 9, 2007 10:28 AM

I used to work in Accenture and SAP and am now a professor researching the mechanisms of the knowledge economy.

I am not from India but am a US resident and am Malaysian in origin.

This discussion is part of the classic top-down' versus "bottom-up' quandary. India’s success is bottom-up and transcends its infrastructure. Its talent pool is great. China is 'top-down’ with fantastic infrastructure, strong government support but still growing its talent.

It appears that at this stage of the cycle of knowledge value or cognitive literacy, India has the edge. Its also about the ability to think freely outside the box without fear, supervision or the need to conform. Diversity and tolerance for diversity and ambiguity are key for allowing and sustaining a culture for higher end thinking.

Top-down seems to only work for infrastructure and procedural skills based manufacturing which quite frankly is routine and can be automated. . Whereas the bottom-up culture thrives on risk. India has done well so far . But it needs to address its infrastructure which is choking.

Having said that, Malaysia is an example where heavy infrastructure investments by the government hasn’t panned out, but cronyism thrives. Top-down here is a failure while India’s bottom-up is a success so far. Even so called 'agent skiols ' failed dismally in the process of promotion and securing IT work for Malaysia for teh simpelreason of there being no skill sets in place , nor can they be developed quickly enough for competitive global delivery models .

India’s advantage isn’t just about IP protection but IP per se. Its bottom-up approach by default is just by the virtue or frankly the lack of it thereof, of good strong government leadership such as what China has. India’s quirk has forced its brains and entrepreneurs to be more entrepreneurial and independents of state help.

My old firm Accenture is planning to recruit 35, 000 in India . Their CEO Bill Green says India is the only country that they can grow from 0 to 35,000 in 4 years for organic consulting, software development and project management because of the intact skill sets population. What about Dalian? Yet here too there was much hype even by Accenture until 4 years ago, but now the ‘proof of the pudding is in the eating’ and a ‘putting your money your mouth is’ type of reality scenario , not PR research agencies nor government hype but hard business decisions based upon proven skills and ROI. India wins on these counts.

IDC ‘s citing ‘agent skills’ is quite frankly shallow, cheap and gimmicky . Far more critical is the fact there is a whole range of hierarchical variation in the value chain for offshoring , not just call centers but development work, research and complex project management . As an example, we can see even in manufacturing, how it intersects the knowledge economy in the area of design competencies. Here too India seems to thrive. The Indian automobile manufacturing space is smaller than China’s but its exports are higher value adds because of engineering design competencies. In fact the Ferrari F1 and the Renault F1 engines designs have been outsourced to India.

Please read McKinsey’s 2005 study on China ITS which says that China is at least 8 years behind India in IT. Chinese IT lacks scale and is fragmented .

Note that the McKinsey study was in 2005 and is reproduced below from Cnet and if you can, the Forrester research at the end of May 2007 that says why India still has the edge for the long haul.

Report: China's outsourcing industry lags India's
By Ed Frauenheim

Story last modified Thu Feb 03 17:55:55 PST 2005

The Chinese tech economy has been racing forward, but neighbor India has a comfortable lead in the field of software outsourcing.

That's the conclusion of a recent study from consulting firm McKinsey, which said the fragmentation of China's software-outsourcing industry is a limitation. Of China's 8,000-some software services providers, only five have more than 2,000 employees, the firm said in its first 2005 McKinsey Quarterly report.

India, by contrast, has fewer than 3,000 software services companies, McKinsey said. At least 15 of these have more than 2,000 workers, and some--including Infosys Technologies, Tata Consultancy Services and Wipro Technologies--have "garnered international recognition and a global clientele," McKinsey said.

Although revenue from information technology services is rising in China, it is barely half of India's $12.7 billion a year, McKinsey said.
"It will be many years before (China) poses a threat to its continental rival in this arena," the report said.

China and India have been pushing to take on technology tasks from more developed countries, such as the United States. The practice, sometimes called offshore outsourcing, has been blasted by critics as hurting U.S. workers and threatening America's technology leadership. Defenders say it helps the U.S. economy overall.
Sending services work to lower-wage nations is in some ways an evolution of the overseas flow of manufacturing work. While China has been a manufacturing leader, India has emerged as the services king, with a number of U.S. companies locating operations there as well.
Now on

Citing estimates from research firm IDC, McKinsey said China's annual revenue in software and IT services rose by 42 percent a year, on average, from 1997 to 2003, to $6.8 billion. In addition, McKinsey said, the number of engineering graduates and software applications professionals in China has grown considerably in recent years, and the number of English-speaking graduates in the work force has doubled since 2000 to more than 24 million in 2004.

But the country's less prominent IT services providers aren't likely to attract top international clients, McKinsey argued. "In general, smaller companies are riskier and less reliable partners," McKinsey said. "They are more vulnerable to the loss of key personnel, may not have the financial muscle to survive for the duration of a project and often don't have the capacity or breadth to absorb large projects easily."

There is little movement among Chinese businesses to consolidate, McKinsey said. But, it said, "several Indian companies are considering acquisitions of Chinese firms to expand their operations."

McKinsey suggested that other challenges face Chinese IT services companies, including better talent management. "Organizational and operational changes are also needed to protect the intellectual property of clients," McKinsey said.


July 9, 2007 11:21 AM

India has advantages over China in developing IT industry. The biggest advantage that India has is they are English speaking people while Chinese will be speaking Chinese.


July 9, 2007 11:29 PM

If indian are so good with their "soft power" as they claim they are, which popular software applications that they acutually designed, tested, and implemented by themselve. what is the state of indian software development level? are they design any 3-D graphic engine for gaming industy? are they design any computer-aided-design software for IC automation? Do they design application for microsoft? Do indian companies design any scientific applications like remote-sensing, Real-time OS scheduling application, multi-threading programming for multicore processors applications? As I know, most if not all, is done in the united states of america. What kind of R&D works is currently done in india, I would like to know. China will never become a major IT outsourcing that is the fact. Are indian happy for now despite the fact that they can't do any r&d work.


July 9, 2007 11:43 PM

If one is comparing only shoes, then indians may have a better shoes for some long time to come. But friends, china is focusing more on the suite ! They are trying to get a decent one.

We are trying to get the one.

Tung Yuen

July 10, 2007 1:07 AM

Everyone is thinking the Chinese should improve their English for more outsourced jobs. I am thinking the world should improve their Chinese to work with China. To me India is wanting to butler to the US and World IT demand while China is working to build its own IT for itself. India want to serve IBM, and Lenovo buys IBM. China does not want to get the outsourced jobs. China want to be the and that competes with Google and the like. Why fight to be the butler and maid of the software company when you can achieve to be the master of the household? I suppose the place that has the most and best hackers and game programmers would groom more talents and best companies in the long run. I believe in term of outsourcing, the Eastern European countries will be a stronger player than China. Chinese want to be the Microsoft and Google and Yahoo in China, not so to go to someone else's home and sweep their floor and take out their garbage. Chinese will write codes to support their fleets of new planes to compete with Boeing and AirBus, while India repair codes written by Boeing and Airbus. Its a different way of thinking.
Unfair to my Mumbai friends, if the price and quality of outsourcing is the same in India as in ShangHai, I feel that the US company would choose the coder in ShangHai. That is still despite the pet food scare of late.

Folks, I may be wrong. I think the Chinese good citizens want to be the next Bill Gates and to compete with Microsoft not fixing Bill's codes. They will write Chinese codes, chinese characters. Will India WiPro write in Indian language?

Hey, who wrote the codes of Apples' iPhone? Was it a Chinese, an Indian or an Angel blessed it?

Let's watch the 2008 Olympics.


July 10, 2007 2:26 AM

Outsourcing may be a low end job but every business needs someone, somehwere to do it! If Indians have built a niche for themeselves doing the "low end" work cost effectively, and have established outsourcing as a successful business model (to the extent that other coutries are trying to catch up with Indians) then they have actually done a great job.

Most of the 30 something indians today have grown in their lives by consistantly building a superior skill set and competing with their peers at every phase in their life-for getting admission to a school, college, getting a job or even while keeping it!

Every Indian in this industry knows that he'll lose his job the day he gives up upgrading his skills; and he's also spurned by healthy competition-be it from across the cubicle or across the border. This, and abandonement of protectionism by the government, are the only secrets to India's economic growth witnessed largely over the past decade. As long as the Indians work with this philospohy, it shall be quite a challenge stopping them.

Rather then taking such comparision to heart, i feel its for the betterment of the industry that these countries compete with each other by bettering their service offerings. After all, business has always flown (and will flow in the future too) to a place where it can be done more efficiently and cost effectively -Amen. Besides, if you don't want to compete in the outsourcing sphere-why so much of heartburn at this article?


July 10, 2007 5:33 AM

Everybody is talking in this board as if there are only two countries in the world, China and India. As if, China is the only country capable of creating infrastructure, and others are not. There is Latin America, and Eastern Europe which are currently working on developing their economies. Russia is seriously re-inventing itself as an economic power to reckon with. Africa is waiting in the wings.

Again, everybody is making an assumption that GLOBALIZATION will not be ROLLED BACK. If globalization pinches the developed consuming economies, their citizens can rollback and go into a protectionist mode. All export driven economies will be impacted by that. Already we are seeing WTO teethering and faltering, and more and more countries are entering into bilateral trade agreements.

It all depends on the direction globalization will take in the future, and only history will tell. If it continues its march in the current path, there will be more or less even development throughout the world.

Udit Mitra

July 10, 2007 6:28 AM

Dear Bruce

You have dun it again!!! Congrats...its the same old India China story. The message board is full, with comments..what more do you require as a blogger..congrats once again. But tell me bro, do you have any other work in life other than putting these two countries at loggerhead every now and then on different issues, from service to manufacturing. Our Chinese brothers will comment and Indians will react...the cycle goes on...and a non asian sitting far away enjoying it..hmm, quite interesting. Let me tell you a fact, we Indians know we are lagging far behind in multiple ways..we dnt win medals, we can't feed our 1 bn people why bother discussing about us..just leave us. I know someone is even more scared with China's rise than Indians are, those ppl's sudden closeness to India tells the story....ha ha.

So leave us and watch your own backyard, its a kind request from one poor, not a medal winning, limited IQ Indian. Lets meet after 50 years and discuss India, China and Uncle Sam(u know whom I mean)One more request bro, get a life!!!!



July 10, 2007 9:15 AM

Infosys, Wipro, Satya, Tata are all Indian - owned and controlled. Infosys 'market capitalization is 28,000 times its IPO. That is wealth generating. Its founders are humble.

Its one thing to brag and dream of wealth, to be the next Bill Gates and so on, yet it is another to create it without government help. They are not office boys . Also for the Boeing Dreamlnier and Airbus 380 the outsourced work is high end and mission critical. Reva is an Indian designed and exported electric vehicle.

Thre is to much patronizing and overstating the the obvious here . Lets' look at what's subtle and underneath.

I look forward to India and China coopting and leveraging off each other. Culturally it 'll be wonderful too. Lin Yu tang always spoke highly of this learning process.


July 10, 2007 11:09 AM

MRG PhD, I don't know what kind phd you are in, it does sound like you are in the computer R&D industry. All you know is gathered the PR statistics from WWW which are superficial. You claim no other country in the world better than India in IT outsourcing is just plain stupid. Since you claimed have worked for indian outsourcing companies, what types of software engineering tasks the indian IT can do. I can train a 8th grade student to do coding and testing in 3 weeks if you refer this is IT qualifed professionals, then billions of people in the world can do that as well!

Shawn Brandaw

July 10, 2007 6:28 PM

Look at it this way.
1) The average Chinese is about twice as rich as the average Indian.
2) China's population is aging because of it's stupid one child policy.
3) 50% of India's population is under the age of 25.

Ya sure, infrastructure matters but in the long run, wage inflation and skills shortages will be a bigger problem in China than in India.

Ultimately, the IBM's, Acenture's, Infosys's, Microsoft's, Cysco's, Wipro's, Google's are going to send programming jobs where ever they can find the cheapest programming. Period.


July 11, 2007 9:33 AM

Sirilon, maybe you should try ordinary literacy more. I never said that I worked for an outsourcing industry. Neither did I claim the exclusive superiority of Indian IT outsourcing. I was merely responding to cheap shots such as that Indians are cheap coders, back end call center operators etc.

I am not from India

There is also no need to get personal here. A blog isn’t graffiti. I also agree that it shouldn’t be India or China centric. But lessons to be learned from these two giants who have quite opposite variations in their economics and in many respects are mirror opposites. The question then that naturally leaps to mind is why not complimentarily?

BTW, English isn’t the only factor, its the ability to abstract mathematically. TATA and XANSA software are designing the Ferrari and Renault F1 engines respectively. These designs are subject to computer simulations. Whoever can identify , manipulate and simulate mathematically sits at the top of the value add pyramid. The competency to manufacture then can be outsourced lower cost nations.

As for R& d, its far too wide and deep to get into basics here or piece meal work. The areas are in biotech, pharma, sattelite and navigation systems, and physics’. To name but a few. Of course many other countries are also dong this for that matter. So that was just my response to an ethnocentric stimulus.


July 11, 2007 9:45 AM

This is an earlier response that somehow didn’t get into the blog. I was merely responding to the "which country is better taunts". So please excuse me if some of the points and tone are echoed in my earlier postings. Overall I believe in synergy and globalization. As always, there is much to be gained from cooperation and coopting.

Well. Well.

Both the Boeing Drealiner and Airbus 380 have outsourced mission critical work to India . So has Ferrari and Renault for Formula 1 (F1) engine design. It isn't cheap code grunt work. It is integrative and certainly higher end at this end of the cognitive value chain. Such cheap stereotypes being bandied about here of Indian expertise is reminiscent of associating the Chinese with laundry services. This isn’t insight at all to keep harping on India’s woeful infrastructure. Everyone knows that. What is sublte isn't obvious .

Yet enormous business value is being created there as we speak and not proclaimed upon linear extrapolations into the future as some are doing so here in claiming an ascendent if not world dominant status.

Ultimately its the infrastructure between the ears, (read brains) and managing diversity psychology for the global delivery mechanisms that count, and not even just drilling like robots in English vocabulary and sentences . You can’t ramp up from 0 to 35,000 in skill sets overnight in India unless you have skill sets in place especially when you need strong development teams, design, research, and large integrative program management competencies. Ask Bill Green CEO of Accenture.

Yasheng Huang of MIT and Tarun Khanna of Harvard have presented the facts about Indian home grown entrepreneurs, knowledge capital and how its companies are doing far better than China’s with no government connections, nor help in the global capital markets such as the NASDAQ and NYSE. Even financial ROIs are higher in India than China. Check Businessweek itself. Others who concur with the same hard data are McKinsey, A.T. Kearney, KPMG, Standard & Poor’s, BCG and The Financial Times. As a matter of fact, Indian companies are growing twice as fast than MNC’s within India itself and with their higher ROIs. Can you say the same for China? Even at the low end, just who is Aptech and why is it the largest market share holder (15%) for teaching computer skills in China? The answer is that Aptech is Chennai based.

In Malaysia the ethnocentric government bragged about the infrastructure being better than Silicon Valley and that Malaysia would be the IT hub of Asia if not the world . They had commissioned high end ‘agents’ with agent skills to sell, they had even favored China and had offices in China. But they arrogantly and ignorantly left out India. They poured hundreds of millions into top down patronage of growing IT ‘techno-entrepreneurs’. The result? Zilch.

The irony is that the German LHS and Indian Satyam are here in the Multimedia Supercorridor (MSC) replete with Indian workers . Its the software, not the hardware the stupid. Then again, If it’s the hardware at all, then its the brains. The buildings, roads and broadband are much easier to build and will come.


July 11, 2007 11:59 AM

In respond to Shawn Brandaw's comment. What is wrong with one child policy in china? shrinking population growth helps environments, reduces poverty, and better schooling. So what if india has 50% under the age of 25, most of them will end in poverty. Where will india find enough resource to feed its growing population? Do you seriously think the world will come and share their resource with india? Yes, india may someday take over china per population, but india just like china faces with water shortage and limited land space. Problem with india today is not poverty, is not employment, is not a lazy government, is not education, it is a growing population time bomb will destroy india as a nation. unlike china, india has a long way to learn how to plan its future on the map. talking is not good, clear vision and planning helps india to achieve in the long run.

Jia Ming

July 11, 2007 2:54 PM

Bruce: I think China kicks India's butt.
Idiot#1: What? we can kick China's butt any time any where.
Idiot#2: You wish! we kicked your butt everywhere, and we're gonna kick some more.
Idiot#1: we'll kick your Chinese butt back to the Tang dynasty.
Idiot#2: Oh yeah? we are already kicking your Hindu butt.
Idiot#1 & 2: #%^%$&^&^%$!%*&^*!!!!!!!!!!

maharaja heir

July 12, 2007 1:26 AM

I never cease to be amazed by BW’s obsession with the “India vs. China” comparison. Here is my comment on this from my lifelong experience with India. China is growing much too fast for India to be able to catch up any time soon - also, it has a twenty year head start.

India, I believe, has a greater number of super high IQ men at the top of the pile - more than China (but these men never stay in India - they leave for the United States at the first available opportunity and there isn't much chance of that changing any time soon). However, India also has huge masses of super low IQ people at the bottom of the pile who are going to be a problem in the long run.

When the divisions of Caste begin to disappear in the Urban Jungles and only money differentiates between people, the masses of poor will be a much bigger problem. In previous times the poor were divided among themselves by a thousand different distinctions - of language, regions and of course castes. As these distinctions disappear and a more homogenous (sort of) society emerges, the country will have giant classes that are more directly antagonistic to each other.

China doesn't have this problem as its a more homogenous country. So I would say China stands on firmer footing. But the question that needs to be answered is whether the Chinese are capable of technological innovation to the degree necessary to overtake the United States. We haven't seen any evidence of that so far.


July 12, 2007 2:49 AM

While India might be creating critical component for Boeing and Airbus but China also create, manufacture and will very soon assemble Airbus plane such as A320 and create composite component for Boeing Boeing 787.

China is working on her own large commercial plane to compete against Boeing and Airbus and China already started with AR-21 (Advanced Regional Jet). China expect that by 2015 to 2020 could start producing large commercial aircraft and there is talk of Chinese aircraft companies such as AVIC 1 and AVIC 2 to work closely with Ukranian and Russian aircraft companies to produce large commercial aircraft.

What if India is designing part of the Formula 1 car for Western companies while China is doing R & D and manufacturing her own brand of car. China is exporting car to Europe and very soon to USA. Chinese cars have a long way to go but still the first step is the most important since it would be an important learning experience for Chinese car companies.

Also, India is doing IT outsourcing for the Western companies and very soon for Chinese companies but China is working in her own patents, own technology such as 3G and 4G technology such ZTE & Huawei that compete with Cisco

Do you see a pattern here? China is working to create her own companies to rival European, American , Japanese and Korean firm in car, airplane, ship, communication and other while India companies are trying just to server Western companies.

Finally, India companies have higher ROI is due to the India government protectionist law that does not allow foreign competition to get into Indian market. For example, if India allow foreign car to freely enter India car market by reducing any tariff for foreign car, then Tata car industry would become history since it lack the capacity to compete with the rest of the world!


July 12, 2007 4:16 AM

Please let me sign off by stating the obvious.

Yes India’s infrastructure is abominable for sustainable development. It has 300 million people in poverty. It s democracy is often an excuse for anarchy in drag. Its primary education is poor. It has a huge Aids problem, along with human trafficking. Everyone knows this and I notice Indians don’t hide these facts but often point them out to me without any stimulus from me.

Chian has fantastic infrastructure, strong leadership and a government in my opinion that is of much better quality than India’s. India as someone said here, has a government that has no will, vision, stuck in the drab discourse of socialism of the last century. China has also lifted 200 million people out of poverty and its streets have no signs of beggars unlike India’s which has far too many. That says it all.

The success of the Indian IT and private business is in spite of India’s government and these are world class achievements. For me that is more noteworthy than bragging about world domination etc. Straight line linear extrapolations of statistics is often wrong when it deals with multidimensional contexts. Let that be warning.

Thank goodness that India still values and thrives on its diversity despite all its problems. That is its blessing. Indeed that may well be its secret of relative success transcending all the stereotypical poverty and backwardness’ of India. And this is this probably the most valuable lesson for us all in this 21st century, so that the Brazil’s and the rest of the Americas’ and Australias’ and the South Africas’ can participate in a diverse new world of talents. How boring if its just India vs China. I for one wouldn’t want to live in such a world. Would you ?

India isn’t homogenous, nor does it ever want to be. So of course is rest of the world. Leadership isn’t abut GDP but harnessing and managing diversity . the first step is tolerance and managing it will be more far more challenging, as it always is. The U.S despite all criticisms still has this and thrives on this. Its ecosystem is still more fertile for innovation than India , China and Europe.

In Malaysia we thwarted our very strength which is diversity. Let that be warning to us who make take this for granted.


July 14, 2007 10:36 AM

My oh my, how the goal posts have changed.

From China to beat India in offshoring, to now about Chinese companies and Chinese brands future plans to dominate the world. The chest beating and the ‘future plans’ seem to be the only constant. What about right now? The responses have seem to have wryly changed from back-end coolies and 8th grade code competencies to “well its actually about Chinese companies and brands in the future , not skill sets in place now, nor offshoring”. How convenient a way to debate, to change the goal posts in the light of muddying statistics. The straight line extrapolations into the future that don’t neatly fit into the picture right now and their original claims. The big Indian companies are making money overseas as well and their listings overseas particularly Infosys . In the seventeen years, Infosys has grown to revenues to a market capitalisation of more than $28 billion, 28,000 times richer than the offer of $1 million on that day.
In the process, Infosys has created more than 70,000 well-paying jobs, 2,000-plus dollar-millionaires and 20,000-plus rupee millionaires. It is admired and ranked in the top 1% of the most profitable and transparent companies on the US’s NASDAQ.

To stay on the offshoring topic, once conspicuous absence in the discussion is that of CMM Level 5. Much has been railed against it but the fact remains its still enjoys currency for the global supply chain for quality assurance and negotiation, but most importantly concrete operationally defined expectations of business value. Without this all claims and assurances remain largely, faith based dogma. Over 85% of the CMM Level 5’s are in India. In contrast China has far fewer and has less motivation seeing it as irrelevant. China’s CMM Level 5 ‘s are less than 1 or 2 %. The first CMM Level 5 accreditation for Chinese IT was helped by an IT Indian consulting firm. CMM Level 5 helps in evaluating proposals at the higher end of the game involving project management through to robust design. Shanghai Bleum was one such firm that concretely benefited from the Indian experience. It also demands an overhaul of the organizational culture currently in Chinese software firms. That is not a casual demand but a critical success factor and no easy task as anyone who has domes business process reengineering will tell you that culture is the softest dimension yet is the most powerful and the hardest part to change. It’s made worse by recalcitrant attitudes and false dogmatic concepts of perceived superiority in competencies. Humility and the willingness to learn and recognizing diversity management as someone said are key here. If the Chinese argue that their focus is on the domestic market, then fine. But to claim that they will dominate the offshoring landscape with no or little interest in CMM Level 5 is incoherent. Again it appears as changing not just goal posts, but even benchmarks when convenient.

Why are the Indians silent? Maybe they have better things to do than chest beat. Though I wish they’d wake up.

And now to the wider conext.

So what? Reva is 100% Indian owned, designed and exported Present and past tense. Period.

Also from the Economic Times :

“…India zooms past China in car exports”
4 Jan, 2007,

“…NEW DELHI: Here’s where the dragon will have to dig its heels. China’s car market may be double that of India, but when it comes to exports, it clearly lags behind. China’s auto exports doubled to 340,000 units in 2006 but were less than half of India’s total vehicle export tally of 970,620 units (including two- and three-wheelers). Sedan exports tripled to 90,000 units in China but fell far short of India’s 191,723-unit passenger vehicle export tally.

According to SIAM statistics, India’s passenger vehicle exports, dominated by cars, quadrupled from 46,028 units in 2001 to 164,965 units in 2004, hitting 171,608 units in 2005. India’s total export CAGR in the 01-06 period was 41.72% with cars and jeeps clocking 33%. China’s total vehicle exports, on the other hand, jumped 120% from 78,000 units in 2004 to 173,000 units in 2005. In terms of value, China’s vehicle exports have hit $1.58 billion while India’s tally is expected to be $2.8 billion, up from $2.25 billion clocked in 2005. Just passenger vehicle exports from India (mostly cars and some jeeps) were worth an estimated $1.4 million in 2006...”

Analysts say the reason behind the skew lies in China’s predominant position in parts exports as opposed to vehicle exports..."

My comment: All in present tense. No chest beating plans about the future.

Indian companies that are listed globally are doing better than Chinese companies in terms of ROIs please read more widely. No government protection here in the U.S.

Of the domestic economy that would indeed be a perverse correlation between ROI and government protection. This is nonsensical to say the least. Check your own logic and math.

As for languages the number system we still use are Sanksrit and misnamed as 'Arabic' are actually 'hindu' in origin and from the Bhrami script . The Arabs took them from India and called them 'hindsat' or 'from India'. Of course the Chinese have their own calligraphy which is visual based and peraps less abstract than a sound based code. Indian languages also have a 'context free ' grammar 'somewhat akin to computer languages.

From what I sense of Indians , they don't like to aggressively assert with patents, and that they had invented this or that .

For example even the Shaolin Kung Fu was initiated by Bodhidharma from India , and hails back to Kalari from South India. Of course Shaolin today is 'branded' to preserve its brand integrity but you can see Bodhidarma's picture in the caves of Henan. But of course it all went underground during the repression of the cultural revolution.


July 15, 2007 3:24 AM

China more entrepreneurial?

India’s companies are doing better than China’s ,they keep their profits. Infosys, Ranbaxy, Wipro, Tata, Satyam, Dr. Reddy's and many more. This all present tense. And not plans in the future. Their ROIs are better and they are listed overseas in unprotected markets. Moreover there hasn’t been one corporate bail out or default in India in the last 6 years.

Can you the same for Chinese companies? Many are state owned enterprises with connections to the government and vulnerable to crony capitalism. China Jet Aviation Fuels suffered huge losses in hundreds of millions, and its CEO was voluntarily arrested in Singapore. India has also the mort billionaires in Asia and the fastest growing millionaire nation in the world along with Singapore which is managing funds into Indian.

Plus in India Clean development Mechanism (CDM) patents under the Kyoto protocol are NGO, bottom up and privately developed , administered and owned, unlike China’s which are state owned and controlled. India has huge numbers of these CDM which can be traded into US dollars. The point? These are private initiatives and reveal the entrepreneurial bottom up innovation culture of the Indians beyond government help. That is the soul of innovation and enterprise.

India’s stock markets are better regulated and have better sustainable returns than China’s for all these reasons. Its bank have far less non-performing assets ( under 10%) in terms of loans than China’s which are bordering 40%.

BTW, Reva is a non-fossil fuel electric powered vehicle and its being exported to the UK and Japan. Its drive train is already proven and accepted in global developed markets. It is Indian owned and designed. Apart from the United Kingdom, the company is targeting exports to USA, Norway, Switzerland, Cyprus, Japan, Srilanka and Malta.

India’s acquisitions by its private companies, not state connected like Chinas’ in the global market are also doing better than China’s. For once, into the future – India’s external FDI will touch USD35 billion this year.

According to consultancy firm Ernst and Young India has been rated as the second most largest foreign investor in the UK for the last 2 years running 2005-2007 , acknowledging India Inc's growing competitiveness and willingness to take up global challenges.

According to the OECD, India among the Brazil, Russia , China in the so called “BRIC” groups created 11 million more jobs than the rest in the BRIC group.. IN the UK, it had added over 55,000 high value add jobs in 2005-2006.

Sure it has poverty, That’s a cheap shot to keep harping on this and ignoring the silent progress. Let’s not overlook these changes going on


July 15, 2007 3:46 AM

Entrepreneurialism isn’t crony connections, nor state help such as China’s state owned enterprises ( SOEs) or with state links.

Case in point Asian Pulp & Paper was a crony ethnic Chinese company that was listed in Singapore and embarrassed the Singapore governing . It boasted about supplying timber to China from Indonesia’s rain forests . Its investors lost over USD6 billion. Today its in trouble causing environmental damage in Yunnan, China.

At least India’s entrepreneurs and companies s are bottom up and compete globally on their own .

As mentioned before , its one thing to drop benchmarks such as CMM Level 5 and then to change goal posts concerning outsourcing to who is more poised for entrepreneurialism. But even so, the spin isn’t so straight forward in the light of facts in the present time.


July 15, 2007 3:57 AM

Sorry for double posting – typing problems. Please ignore previous).

Entrepreneurialism isn’t crony connections, nor state help such as China’s state owned enterprises ( SOEs) or with state links.

Case in point Asian Pulp & Paper was an ex-President Suharto crony ethnic Chinese company that was listed in Singapore and embarrassed the Singapore goverment . It boasted about supplying timber to China from Indonesia’s rain forests . Its investors lost over USD6 billion. Today its in trouble causing environmental damage in Yunnan, China.

At least India’s entrepreneurs and companies are bottom up and compete globally on their own with no state help. That is the spirit and psychology of enterprise which demands transparency by default .

As mentioned before , its one thing to drop benchmarks such as CMM Level 5 and then another to change goal posts concerning outsourcing to who is more poised for entrepreneurialism. But even so, the spin isn’t so straight forward in the light of facts in the present time.

Mark Lewis, London, UK

July 16, 2007 7:57 AM

As an adviser for the past 5-6 years to Western corporations that have set up captives, hybrid and other structures in both India and China, and as a lawyer, I have experienced the following: in deciding where to establish and with whom to do business, even allowing for stockholder value, Western corporates seem to be more comfortable doing business in a democracy, where the rule of law is understood and applied through a constitutional judiciary, however imperfectly. It is vital to keep in mind that India is a democracy, whatever other issues it may have.


July 16, 2007 9:25 AM

jwcc, dont be stupid...
Chinese crownies connectionshiph and SOE has nothing to do with chinese enterpreneurshih, and it doesnt prove that chinese has no enterpreneurship.

they are only small fraction of all chinese enterpreneur. Most chinese big company is SOE because china has experience capitalism only 25 years.... compared to 60 years of India. No wonder India has more tycoon due to her longer time in capitalism.
You should see that behind SOE, there are so many small chinese company which is purely enterpreneur than crownieship or SOE


July 16, 2007 4:52 PM

JWCC wrote

“…India zooms past China in car exports”
4 Jan, 2007,

“…NEW DELHI: Here’s where the dragon will have to dig its heels. China’s car market may be double that of India, but when it comes to exports, it clearly lags behind. China’s auto exports doubled to 340,000 units in 2006 but were less than half of India’s total vehicle export tally of 970,620 units (including two- and three-wheelers). Sedan exports tripled to 90,000 units in China but fell far short of India’s 191,723-unit passenger vehicle export tally. "

Apple and orange comparison: Total number of Chinese four wheeler export comparing again India export (two, three and four wheeler vehicle)and somehow this flaw comparison is considered a valid point to support all that hot air of yours!
Most of your other points are nothing but chest-thumping preach by other Hindus like yourself in the past! Show some creativity and not be like a scratch disk that keep harping the same message over and over.

China is the biggest motorcycle exporter of the world
China to export 8 million motorcycles in 2006

Beijing, Dec. 1 ¨C China's motorcycle industry has been developing swiftly in recent years, and its output has kept ranking first in the world during the last 13 years, and its export volume has also ranked first in the last 6 years.

It is estimated that China's motorcycle output will surpass 18 million in 2006, or half of the world's total output. Some 8 million will be exported to more than 180 countries and regions, with total value amounting to US$3 billion.

China's motorcycle watchdog has tightened export control and kicked nearly 400 low-qualified and illegal domestic exporters out of the market. Dumping cases have been reduced dramatically since last January, and the average unit prices have risen. According to statistics released by the Ministry of Commerce, the gross export value of motorcycles will increase to at least 3 billion yuan ($380 million) from $2.25 billion.
"China's motorcycle industry zooms ahead in Q3

China's production and sales of motorcycles accelerated in the first three quarters of the year, with growth of both output and sales the fastest in recent years. According to statistics from the China Association of Auto Manufacturers (CAAM), China turned out a total of 15.5499 million motorcycles in the first three quarters of this year, and sold 15.3654 million, surging 25.64 percent and 24.68 percent year-on-year. The sales ratio stood at 98.81 percent in the period, and the inventory was 776,000 by the end of September. Of the total, production of two-wheel motorcycles was 14.9126 million, up 24.43 percent, and sales were 14.7339 million, up 23.42 percent. Production of three-wheeled vehicles was 637,300, up 62.71 percent, and sales were 631,500, up 63.86 percent."


July 17, 2007 6:05 PM

Quality of the India car. It got only two points out of 120 points in term of safety.
Conquer the automotive world sure....,23599,22068345-421,00.html

JUST weeks after its release onto the Australian market, an Indian-built ute has been crowned the nation's least secure vehicle by a leading motoring group.

The Mahindra “Pik-Up” ute only managed to score two from a possible 120 points in the latest RACV Vehicle Security Rankings report. "


July 17, 2007 11:24 PM

"..But Mahindra’s affiliate in Australia, Tynan Motors, said the tests were based on an older model that was no longer being marketed in Australia.

“There are probably only 20 of them in the country,” Tynan Motors CEO Claire Tynan said.

Ms Tynan said all current and future models of the vehicle boast many more security features, including immobilisers and automatic door-locking..."


July 18, 2007 5:37 AM

Ha! Ha! How pathetic! Now its about motorcycles, not cars. First it was about offshoring, then what happened to the CMM Level 5 Facts. Stay on topic please. If you choose to digress then make sure you can still stay on the other topic and criteria that you yourself(yes) have invoked. Yes, cars with cars, apple to apples.

As for SOEs now we are indulging in the politics of the apologetics. No one said that Chinese aren’t entrepreneurial. that would be ludicrous, if not racist. . Its the polarized extremis of a mind that can’t tolerate ambiguity. Such a neuroses. What was said as I recall form earlier commentary is that Chinese were more entereorensurail than Indians. So the facts others and myself had presented do provide amore balanced picture. So who’s chest thumping? From the offensive that Indians are low end in offshoring, and then not as entrepreneurial as the Chinese to please we are stil learning. that's defensive and what's more a 180 degrees turn of posturing.

The responses here reflect more on the commentator's psychology than the topic.

I'm not stupid and am not Hindu. I'm also not from India.

Singapore's Indian population is 9% and they represent over 50% of the services industries as mentioned before . Even their Prime Minister Lee Hsien Loong praises them as“being a creative and entrepreneurial group, Indians are a great asset to our economy,”

Goodbye. Wake up and smell the diversity of fragrances in the world , not just one. They all add value.


July 18, 2007 10:34 AM


"Interestingly, India is increasingly a hotbed of high-quality inexpensive car design and engineering. Unlike the Chinese, who are copying everything in sight, and using OEM components from foreign manufacturers to assemble their cars".

From India The Future Auto Giant
Brendan Moore, Autosavant, 2007

Why would China's Nanjing Auto buy Rover which nobody wanted to touch, not even with a ten foot pole? Rover was forced out of the US market in the late 80's because of poor quality. The best thing then according to U.S. auto journalsts was at least the Japanese Honda drivetrain.

The 'Connoly leather upholstery and 'walnut burr' advertising couldn't sell in the U.S. Brit brand loyalty has its limits especially when quality is severely compromised. After that the next owner,BMW dumped Rover for the princely sum of 1 pound sterling but wrote off a USD4.5 billion loss.

Rover's cuurent owner is Nanjing. But Nanjing 's parent Shanghai Auto (SOE) has taken legal action against Nanjing. Rover obviously took Nanjing on a solid British rubbish ride minus the design blueprints. Is this entrepreneurial and business savvy?

Cut to 2004:
Indian auto component manufacturers have gone through a steep learning curve and are all set to make an impact on the global scenario. The industry's competitive edge stems from the availability of highly skilled manpower at relatively low cost, its ability to adapt to low-volume production using appropriate technology and automation, its capability in terms of just in time (JIT) supply using active support from logistic providers and its track record in adopting Japanese concepts and best practices like Total Productive Maintenance/Total Quality Maintenance (TPM/TQM), Six Sigma and Toyota Production Systems/Lean to improve productivity and quality.

According to the Auto Component Manufacturers' Association (ACMA), there are now 384 companies with ISO 9000 certification, 223 with QS 9000 certification, 83 with TS 16949, 63 companies with ISO 14001 certification and nine companies with OHSAS 18001. Five companies have also won the Deming Prize, and one has won the Japan Quality Medal.

Boston Consulting Group holds that India's edge lies in its capability to turn out low volume, high variety of parts in which the engineering content is high - despite the fact that the size of its factories are much smaller than those in the US, China and other emerging economies.

Circa 2004. BTW, Updates in 2007 are more daunting! Stay tuned if interested.

Thank goodness this isn't s't Xinhua. Information flows freely.

Coming to back to IT Offshoring,
As for small Chinese entrepreneurs that is of course true and good for them amd the rest of world, but scale in IT offshoring can't rely on small fragmented firms for global delivery process and execution. The risks and coordination of quality are too intense and extensive. LIke or not, that 's where CMM Level 5 is the obstacle to overcome. Check McKinsey 2005.


July 18, 2007 10:49 AM

Oops! Forgot to me to mention that Nanjing bought Rover for USD 50 million. Thy should have talked to BMW first for advice on valuation.


July 18, 2007 11:15 AM

Oh BTW, Malaysia's crony infested auto SOE Proton also bought the British 'high end' brand Lotus and lost big time in finance and transfer of technology.

Why, they also bought Italian hottie branded motorcylce Augusta and sold it off at a loss. Why? Glamour, ego, top down patronage, corruption and money to be made in terms of oiling the big deals by the well connected. Taxpayers lost the mst of course . Result zilch in terms of the goverment hype on technology transfer

Shawn Brandaw

July 18, 2007 2:29 PM

Did some say China will overtake India in outsourcing? See the article below. It's like I said before, multinationals will go where ever they can get more bang for the buck. Wage inflation is as big a problem in China as it is in India, but you were never know it by reading the western newspapers which always seems to place China in a more favorable light.

China tops India on average pay

"Skilled workers earn more in China than in India, a new survey of pay in two of the world's fastest growing economies has revealed."


July 19, 2007 2:59 AM

Thanks fo the article tip Shawn. I think there's more to the picture than individual articles but the overall stats and trends. Overall India has an attrition challenge, and higher costs along with the infrastructure. That's a fact .China has still lower costs over all with Indian IT companies outsourcing the lower end work to China. Satyam, Infosys, Tata and Wipro all have offices and workers in Shanghai ahd Dalian.

But returning to IT offshoring, CMM level 5 is the kicker for high end design and delivery becuse of the complexity in execution. CMM stands for the "Capability Maturity Model" and was launched by the Carnegie Melon Institute in the U.S.

A Level 5 is indicative of a perfect score and is no mean achievement. India has over 85% of the global pool of CMM Level 5's, China I think has only has one or two in number, not even per cent.
This really cuts to the chase . Otherwise its all just talk without any operational definition of IT high end quality assurance that gives you the confidence and trust for major business outcomes in an organization's capability far, far away.

Because of the complexity in the global delivery models involving project teams across the globe, Global IT Business value as expected by clients adn customers can't take care of this in short shrift but need to see CMM Level 5 certification. Its not an esay process to attain this. It involves major culure change and business process rengineering.

Finally I wish China and India well. They are emerging, nay surging economies and markets.

Their poor deserve better. Nationalsm is good but globalism and glocalism ( awful sounding word)are better. I am an optimist. I see the glass as half full and and think that the world will benefit from these two Asian, ancient giants beyond the chest beating for now. That's the unstoppable force of nature.


July 19, 2007 3:57 AM

CMM Level 5 is the global standard and ‘perfect score' for IT.

Indian IT Satyam, Infosys, Tata and Wipro are looking to tap into the huge domestic IT market in China for their own business cases. But in the process they have also invested hundreds of millions and are training the Chinese in IT and project management. Narain Murthy of Ifosys is positive about China's potential .


July 19, 2007 1:40 PM

In SE Asia, we generally refer to India as the largest democratic beggars land full of Muslim oppressing Hindus. These folk are superstitious, backward and yet extremely arrogant. LOL, even with average IQ at 81, they still think their country is a tech superpower because they can do some low-end IT. We have some of their IT folks working here in Malaysia ranting about how wonderful India is; how brilliant and resourceful their people are and how their people literally broke the IQ meter etc. until we are totally fed up. A few months back, I was sent to India on a business trip. I would say it is total western conspiracy to take advantage of poor India’s scarce resource of limited supply of talents to hype up the “India superpower/shining” hoax.

Indians are totally chaotic and undisciplined peoples. On the streets of Bombay, Hydra bate and Bangalore, cows, pigs, dogs, donkeys, monkeys, elephants and hordes of Indians are all chasing the rights of ways. Funny thing is it IS THE ELEPHONE that respect more the traffic light. I saw some elephants stopped at a traffic light but not a single India! Indians government is also too incompetent to enforce some very effective laws on basic hygiene protections. People urinate and defecate everywhere, behind the bushes, poles and even on the main streets on Bombay. Infosys has a nice camp. From our windows, we saw people release themselves behind the Infosys garden. My Infosys colleagues do not seem embarrassed at all. India also has big stratification of society and class antagonism between upper and lower castes and shameful oppression of Muslim. Only a small portion of Indian elite are taking advantages of recent IT outsourcing opportunities. Indian upper castes demonstrate discriminatory behaviors that would stir a riot here SE Asia. Lots of my upper caste friends told those lower castes only deserve to work outdoor and under sun. Such lower castes account for 85% of Indian population. I wonder how India can move to a more developed country with such many illiterate, weak, isolated under caste peoples. Indians are also spineless coward. Any countries can kick India butt. Arabic ruled India for centuries. So do Persian and Aryans. A few hundreds British went there, defeated and conquered India for 200 years without much a fight. Basically, any country shows up and India knees down and beg for mercy. Even our Paki brother can give them a bloody nose. You can forget about the superpower and already get a SUPERCOWARD. Indians are also leaving an impression of being sneaky and politicking, always ready to take credit and blame other for failures. Indians are also lazy and chic chat a days and ready to surrender whenever there is a hardship and endurance. That is why India has never ever won a single Olympic G medal. You can forget IQ gap. What excuse can India ever come up for a billion plus people no to win a single medal! If India ever wants to improve, start with STOP OPPRESSING NON-INDUS!


July 19, 2007 7:46 PM

All talk and nothing to show for as fully displayed by some of the Hindus on this blog.
China GDP will surpass Germany on this year or early next year. India still behind Italy GDP or even just a bit better than South Korea, a country that has fewer than 10% of the population of India.

Results speak louder than word either spoken or written.
Chery is selected by Chrisler to produce car for them and not Tata. Chinese car companies are preparing to enter European and American car market and it will be next several years. Tata have yet to ship any real car to any of the above market. The Reva is just underpowered and slow toy car for city drive and not for highway at all.
Moreover, Chinese auto part is being providing car component not only for MNC in China but also outside of China.

China is the third and very soon the 2nd major ship producer in the world. Also, China is creating her own patten and many more concerning the shipping industry.

China has SMIC, Grace Semiconductor, and other Wafer fab companies and Chinas has built her own CPU and what India done for themselves other than working for other? Entraprenurial?! Nothing but big monopolies protected by the government.

India has many more billionaires so what? This only accentuate the "Have" and "Don't Have" that is so prevalent in India where the upper caste live like gods and lower caste in hellish condition.

Type as much as you want but we all know that it is only hot air from Hindus such as yourselves.
India did not make it after independence since 1947 and I don't see it that it would make in the next 20 to 30 years either before it consumed all her resource to feed the masses of lower caste Hindus.

Finally, Bruce Einhorn, please stop posting more provocative opinion that is more based in hearsay, shallow research than real fact.

You must get a real kick seeing the Chinase and Hindus fighting for you!


July 20, 2007 12:55 AM

Thanks Bruce for the space. To jcage, please don't dismiss the above facts and stats. Your tone and attitude reflects more on you and not all Chinese. GDP growth does not equal development.

You seem to be in active, not passive denial . Maybe you should try to log off Xinhua or China Daily for some time. As a matter of fact, its not even the global travel nor free access to media that is important in knowing the trends , but whether the mind chooses to remain open or closed. If the mind remains closed, then it can only be a case of active denial.

What have you got against Hindus?

Modern Chinese writer Lin Yutang writing in "The Wisdom of China and India" -p. 3-4 and 135 -141 and 265-7:

"India was China's teacher in religion and imaginative literature, and the world's teacher in trigonometry, quadratic equations, grammar, ."phonetics.

BTW, REVA and other eletric cars represent the future of metropolitan cars. They are small and that is how the trend will be for non polluting fossil fuel based technology, and reliable utilitarian vehicles. Have you heard of global warming? Try to look beyond, pardon the pun, the GDP smokescreen, .


July 20, 2007 12:19 PM

No one is in denial other than you JSMR,
Lin Yutang has been a very polite way to praise India (which is a great country before India became UK servant) and it should not be taken as face value like you are doing right now.

Electric vehicle are also produced in China and hydrogen powered engined are also developed in China as well. What India is doing is nothing especial like you make it sound, it is good but nothing out of this world.

China's first hydrogen refueling station goes into operation
"China's first hydrogen refueling station goes into operation
(Xinhua Online) [9 Nov 2006]
China's first hydrogen refueling station went into operation Wednesday at a suburban high-tech industrial base on the outskirts of Beijing.

The station, in the Beijing Hydrogen Park opened the same day, is the largest hydrogen station operated by world energy giant BP."

China has spent a lot of money in renewable energy such as wind power:
"China Makes Huge Breakthrough in Wind Power Technology
Zijun Li – July 4, 2006 – 5:53am
ChinaWatch Logo
China Watch Home
About China Watch

Chinese developers unveiled the world’s first full-permanent magnetic levitation (Maglev) wind power generator at the Wind Power Asia Exhibition 2006 held June 28 in Beijing, according to Xinhua News. Regarded as a key breakthrough in the evolution of global wind power technology—and a notable advance in independent intellectual property rights in China—the generator was jointly developed by Guangzhou Energy Research Institute under China’s Academy of Sciences and by Guangzhou Zhongke Hengyuan Energy Science & Technology Co., Ltd.

The Maglev generator is expected to boost wind energy generating capacity by as much as 20 percent over traditional wind turbines. This would effectively cut the operational expenses of wind farms by up to half, keeping the overall cost of wind power under 0.4 yuan ($US 5 cents), according to Guokun Li, the chief scientific developer of the new technology. Further, the Maglev is able to utilize winds with starting speeds as low as 1.5 meters per second (m/s), and cut-in speeds of 3 m/s, the chief of Zhongke Energy was quoted as saying at the exhibition. When compared with the operational hours of existing wind turbines, the new technology will add an additional 1,000 hours of operation annually to wind power plants in areas with an average wind speed of 3 m/s."

Beside alternative energy, China is growing strong in term of hardware-wise such as ZTE and Huawei
EJL Wireless Research Reports Nokia Siemens Networks #1 BTS OEM in 200, ZTE and Huawei Are Top CDMA BTS Suppliers

EJL Wireless Research Reports Nokia Siemens Networks #1 BTS OEM in 2006 With Huawei #3
Chinese OEMs ZTE and Huawei Are Top CDMA BTS Suppliers

Highlighted Links

REDWOOD CITY, CA--(Marketwire - July 17, 2007) - The global base station market grew by 19.1% in units in 2006, down from strong growth of over 50% in 2005, according to the latest report from EJL Wireless Research titled "Global Base Station Market Analysis and Forecast, 2006-2011, 3rd Edition." "The base station market grew slightly faster than we had predicted a year ago with GSM technology continuing to drive the market," says founder and President, Earl Lum. The report provides a unique perspective on the global shipments and demand for mobile base station equipment covering all major OEMs including Alcatel-Lucent, Ericsson, Huawei Technologies, Motorola, Nokia Siemens Networks, LG Nortel Co. Ltd., and ZTE.

"The newly formed Nokia Siemens Networks, coupled with NEC 3G, was the number one ranked OEM globally in terms of total base station shipments with long time leader Ericsson just slightly behind at number two. The surprising top three OEM was Huawei," says Lum.

"The GSM market continues to have remarkable resiliency and strength with continued strong demand in 2007 and beyond as emerging markets in China, India and Brazil continue to upgrade and deploy GSM/EDGE technology," says Lum. "In the CDMA market, Chinese OEM ZTE remained the top supplier with Huawei second."

China is moving into the knowledge economy with deed and not hot air like some member of this forum.

Asia: In China, a great leap forward with research into science, technology

As you can see, China is moving into high tech whether you like it or not or accept it at all.
Result count more than anything in this world.


July 22, 2007 7:14 PM

a indian guy said:
...china will take a very long time to catch up to india in the IT field.
The reason: Soft skills...especially the command of english.
Indians have 2 HUGE advantages over the chinese:
1. Most indians speak english ( and quite well too).

my answer:


July 23, 2007 5:59 PM

There are lot of countries that does not speak English very well but can read good enough and have done well such as:
South Korea
Even China is improving without having a great English Speaking population and many people outside of China are actually learning Chinese...

Just because India was created by the British and their colonized people must speak the language of their master does not make the servant as an equal to the master in eyes of everyone else. I hope this is clear enough so stop bragging about your English skill.

India is a great country and I wish India the best and hope one day it can regain her self-respect when it does not need the approval of the West in order to feel herself well. When India can be confident without the need of being patronized by the West when the West could manipulated India for the West own purpose and not for the interest of India

Charles Drake

July 29, 2007 1:02 AM

I work in the UK and as an IT consultant I have found that a great majority of my indian compatriots are quite proud of there country. However there is a denial in that there outlook is completely in IT and that they themselves percieve they dominate this outsourcing/insourcing venture. Working for a multinational, I have found countries such as China, Russia, Romania and Phillipines are just as successful from being cmm level 5, perform great project management skills and run projects under budget. The typical indian viewpoint is that they have the largest democracy, have large it centers, have university institutions committed to IT excellence and speak better english then the likes of any country other than the US/UK. This is not true, I have tasted my share of bad "ind"-glish. I do enjoy my cup of tea when it comes to cricket but on the contrary to India being the dominant factor in the coming years in IT, I would say the turtle will always be the turtle, especially when it can't come to grips with its own country (pollution, poverty, corruption, attrocities to sikhs and muslims, hiv/prostitution). What good is a democracy when its dominated by hindus that hates any other race, still in the year 2008 has a caste system and have 800 million people below living below poverty? Indians are very competitive but they are not team players, that is witnessed in IT work. I would rather bet on China, Russia, Phillipines or Eastern Europe for IT in the future. These countries are more predictable. Yes, they do have a stricter form of government in the past but who knows if unstable India will have another bomb in their railroads, or parliament assasination or worst a war with Pakistan. India is too unstable. Stick with the predictable where you investment won't go down the drain.


July 29, 2007 4:59 PM

Working in the UK, I have seen a gradual sense of pride from Indian consultants transform to arrogance. I hate to tell Indians but IT does not belong to you. Any country that can provide low-cost IT outsourcing needs can be replaced by another that gives better incentives. Here's why I believe that China will win out. The Chinese have all of their grade 1 to university learning English now, the English gap will be totally removed. Total cost of development in China is less as they have the state of the art facilities and infrastructure, and as media and audio development become realized, this will become more apparent. Chinese are more fast-paced and they work in smaller team-based groups and are therefore more agile and adaptive to changing requirements. Compare that to a team in India where there's hundreds if not thousands of people all working on segmented tasks. These teams are always under high-pressure and therefore always take shortcuts in development task. This compared to the chinese who are design oriented and try to fix issues at the root of the issues. I believe that in the future, the higher-end applications will definitely require better, faster and more stable network systems. This requires a good stable power supply. Is that present in India? Furthermore, China not only serves the US. Japan, South Korea, Taiwan, Australia, Thailand, Indonesia, Phillipines, Vietnam, Malaysia are other countries who heavily trades with China and it economically and timezone wise, it makes sense to outsource to China instead. These countries combined in fact within the next 15yrs will have total gdp surpassing those of the US or EU. It seems the Chinese are quite the entrepreneurial and take whole country has finally waken from the Marxist communist credo. Communism with chinese ideals don't seem much different from Confusionism as the rule of law and working for the family and community are always at heart. I think in the future, India will continue handling low-level development task while high-end design and application development will go to the country with better infrastructure and willing people to make it happen. In this case, it seems like China will win out sooner than later.

Bee Yian

August 2, 2007 5:00 AM

Come see China. Start with taking the train from Shanghai airport.. 7min to cover 30km.


August 7, 2007 6:14 AM

Love to see the fight between Chinese and Indian supporters. I recon people should come to read this tread often to improve their debating skill. It makes sense for Chinese supporters to admit that India does have an edge in IT outsourcing over China and for Indian supporters to understand that IT outsourcing alone will not take India to next level. China has built a very strong fundation for the further development - manufacture and infrastructure but India has not. Yes, India is miles ahead China in IT outsourcing but IT itself would not make India a strong and rich country. The dream that a lot of Inidan have to make India a superpower will not be realised if India does not have a strong manufactural industry and adequate infrastructures. If India relays only to its IT, it will never break its poverty circle. You just can not make everybody to write the codes. I have some advice to Indian friends. Do more homework on your agriculture, more homework on your manufacture and more homework on your infrastructure. Those are your core issues but not IT.


September 6, 2007 8:05 AM

worzelimama, shutup your bloody mouth, you fellows, suppressing Muslim Women's rights in Malaysia, then you talking so much about India. First you correct your country's dirty menace of Muslim Fundamentalism and oppression of muslim women. Hey fool Indian Muslim women has much freedom than in any muslim country, you should know this. Don't bring religion in this discussion. Its our Indians mistake work in Malaysia, you kind of mannerless brutes. First save your country before its go into Fundamental groups hands.


September 6, 2007 8:49 AM

My dear friends, If you guys say India or China is great or become super powers, and blaaaa, they couldn't become super power simply with your stupid arguments. I am an Indian, but I knew very well about both Indian and Chinese rural poverty, as I have traveled several times to China. Both countries need address the poverty first, then only you can say the country is developed. Just built Skyscrapers in Shanghai, Beijing, Guangzhou, Shenzhen or Hangzhou and built nice roads along north to south, forgot about other parts of China or in India just with IT sector. Both countries never be a developed country, until every citizen in their country can have food, house and decent education.

You people stop stupid arguments about which country is great. Put your efforts, how u can improve your fellow countrymen's living standards.


September 17, 2007 12:45 AM

We are fed up with the most barbaric Brahmin parasites. The Brahmin not only shackles India with the evil caste system for thousands of years; polluted Indian mind; it but also sold India to RAJ. These Brahmins enslaved backward castes, raped their people, ripped India of her wealth. Majorities of them benefited Indian public funded education and yet try all the way to immigrate to US or UK at the 1st opportunities. They praise India and brag fully knowing Indian people are living in destitute and poverty. They try to sell India as paradise and yet abandon their countries at all costs. If they love India so much, THEN WHY LEAVE India in the first place! Stop lying! They are social parasites and we despise them!



September 22, 2007 12:26 PM

why not?
At least China has the following advantages:
1. Thousands of fresh graduates can not get employed every year. These people can be easily trained as programmers. ---they have the talents

2. China has a much larger market. More specifically, they have a large manufacturing sector to support. Software is mainly used to support other economic sectors. Therefore, software developpment should get close to its customers. Therefore the service industry which support manufacturing industry should be and will be in China. -----they have the market

3. Somebody may claim that English is a big problem for Chinese. While, this is totally non-sense. the mistake they make is that they wrongly assume that all the sourcing software project is going to come from USA. But how about if I tell you more and more project is going to come from china. this is quite reasonable, since they are the world factory and they need software to support their industry. Are you expecting indinas to get these projects? I think the local chinese software companies should be the preference,since Indians does not know Chinese and this will becomes their disadvantage. And what's more, Project from Japan and south Korea probably will also go to china instead of india.

4. china's software industry is much healther than india's. Why? china's software industry create their own brands. like WPS Office, Rising anti-virus software, etc. But its india counterpart mainly do out-sourcing without their own brands.

And here is a common mistake most people make:

They claim that india is the IT giant. Its IT industry is much much better than China's. Think about it twice, is there true? First of all, how do you define IT? In other words, what is IT and what is the sphere of IT? does it include internet technology, IC, and telecomm? or IT is just outsourcing? People should stop bullshitting before they can answer these questions clearly.

Whenever you comment on these issues, here is my suggestion or warning:

1. do not take anything for granted.

2. do not comment on chinese issues from a western's view or indian's view. If you really want to know how they think, think they way they think.

3. do not trust those medias. why? reportors==unprofessional. they can comment on IT, while they are IT idiots. this is true for all public medias. for each problem they report and each comment they make you had better think about it twice before accepting them.


November 27, 2007 5:05 PM

In my American neighborhood we just argue about which Indian or Chinese girls to date.


November 27, 2007 11:52 PM

Bee Yian,

You are a prime example of the overproud Chinese person. You think your country is so great because of a fast train and other impressive technological advances. And what makes me laugh is that it has nothing to do with this trends topic.

Can China really catch India? Most likely not. The Chinese do not have the same prowess and talent the Indians have in software development. And don't give this s*** that China has its own brands. Many computer companies in China are companies just bought by the Chinese. For example, Lenovo. Lenovo actually bought the PC producing sector of IBM and just marketed it a little better and produced some unreliable wanna-be software. The only real authority that China has in the IT world is only through investments.

India produces amazing talent, especially through their IIT schools. The talent level is going down to the quantitative need of IT workers, rather than qualitative, but it is still much higher than China and many other countries.

S Registers

September 2, 2008 5:13 AM



September 15, 2008 12:31 PM

China is a communist party with strong government. Taking advantage of this, in the past three decades the chinese develop their economy step by step. They started from textile industry, and now gradually occupy the world market in almost every fields. This is why you can see so many made-in-china products everywhere. The situation that india is better than software engineering is only an inccidence because chinese government had no plan to to develop this field before 2003. But now they changed their mind. Since 2003, the chinese IT industry started to accelerate. At present, chinese companies have already been important players in east asia market.
Moreover, it seems many people misunderstood the definiation for "democracy". Democracy does not only mean the right to speak, but also mean the right to eat. I guess the later right may be more important. At present the population without adequent food in india is more than 5 times than that in china.
In terms of "cheap" labours, it seems that labours in india are much cheaper than china. As far as i can remember, in 2007 the GDP/person in china is about 2700USD, compared with about 1000USD in india. Labours in china are no longer cheap any more. This is why in the past few years many companies, including many chinese companines, have moved away from china to other countries such as vietnam.
Many people think english is important. But look at Japan and Korea, we know this idea is not meaningful. In fact, the most important thing is education itself. Chinese has started to update chinese education system a few years ago. Now you arbitrarily pick up any university ranking list, you would find there are much more outstanding chinese universities than indian universities. In terms of research outputs, such as sci papers, china seems to already rank no 2, only second to USA, while india ranks about no 10 in the world. This again attests that english is not as an important factor as many people have assumed.

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