Smart Grids: China’s Edge over India

Posted by: Bruce Einhorn on December 5, 2009

On the eve of the Copenhagen conference was a two-day meeting in Beijing about the smart grid in China. Check out the Cleaner, Greener China blog for some interesting analysis of the event, which included speakers from companies like IBM, ABB, Alcatel-Lucent and Enel.

Estimates vary on how much the Chinese are going to be spending to modernize their electricity grid, but the presence of execs from those companies is an indication that multinationals see big opportunities to take advantage of Beijing’s smart-grid push. At the same time, companies are also keen on getting a piece of the action in India, where governments are also making ambitious plans to build up smart grids. According to Kristian Steenstrup, research vice president at Gartner, “there’s enormous activity going on in India; every one of the states is simultaneously building up smart grids.”

So which Asian giant has the edge? According to Steenstrup, China has more of a top-down approach to smart grids that should make it easier for the Chinese to move quickly. In China, there are only a handful of power companies and grid operators; in India, there are lots of different players across the country. When it comes to the electricity infrastructure, it’s “easier and better to coordinate if you have fewer parties and more centralized control,” Steenstrup says. “I think there’s more potential with the Chinese approach to leverage successes across different areas and sectors.” For some industries, a decentralized approach works well, and certainly there are businesses where Beijing’s grip stifles innovation: Chinese consumers are not well served by having a choice of just three cellular operators for the whole country, for instance. If there’s one thing the Chinese really know how to do, though, it’s build infrastructure. Not many people say that about India.

Reader Comments

rob

December 5, 2009 6:38 PM

But yet we have democracy in India. With democracy everything is possible, and will be done efficiently and effectively. With the letter "d", we will have smart everything in Delhi, with the letter "e" we will have smart everything in Mumbai, with the letter "m" we will have smart everything in Kolkata, and so forth. All in all, we can eat democracy, dream democracy, sleep democracy, and even peepi democracy. Unlike in the rest of the world, especially China, they will have to eat, sleep, and wear their hard work. How pity the Chinese. Jai Hind!

Sam K

December 5, 2009 8:25 PM

Except for Western news reporters that spread disinformation about China, anyone who has visited China and India knows that China is now light years ahead of India. In terms of infrastructure, India has progressed much beyond when the British left. Sure there is a a growing Indian middle class, but the caste system relegates hundreds of millions of Indians to destitute poverty. Over 70% of Indian children experience malnutrition. IN our lifetimes, India will never catch up to China. Period

gailo

December 5, 2009 10:47 PM

China has been and will always be better than India.

babuds

December 6, 2009 4:05 AM

Yes. China has an edge over India, not only in smart grids, but in almost all spheres of technology and development. In fact they are 15 years ahead of India, considering China and India opened up their economies in 1978 and 1993 respectively.

But the crux of the matter is; China is susceptible to catastrophic disruption as they lack the safety valve called democracy, which India has. So MNCs investing heavily into China should factor this and have their plan Bs ready.

Xiang Yu

December 6, 2009 6:30 AM

Indonesia has centralized power company, controlled by the government. Only one word to describe it, sucks. The most important thing is not the system, but the political will of the government to provide for its citizens.

Brar

December 6, 2009 8:00 AM

It's easier to get things done in China vs. India, because of one fundamental difference i.e. Democracy. India is a democracy, where democratic processes takes a lot of time because you have to listen to everybodys objections or better than other's solution. Compared to that in China, we have dictatorship, so "it's either my way or highway'. This makes, making decisions easy and simpler, where as Indian counterparts would have to spend years negotiating, setteling differences and compromising.

@Bruce Einhorn

December 6, 2009 1:49 PM

Here we go .. another inflammatory article from the official PRC's b**tch Mr.Einhorn himself. Don't you get tired of all this? You provide no proof, no evidence and no references. Do you even know what journalism is?
Oh, and I'm sure you won't post my comment. Here's a suggestion Bruce - come out the closet already. Its okay, your kind is now tolerated.

logic

December 6, 2009 2:30 PM

Good bottom line take by Bruce. China and technocracy is I think going to give the English-speaking world and democracy quite a run for the money this century. An Indian journalist lamented that in India, "everyone has a veto" and that broadly applies to the U.S./U.K. as well.

Confronted with a crowded world and the need to make trade-offs, technocracies like China will be able to make the necessary choices to avoid greater pain decades later. Democracies simply won't make the decisions, and that will pull us down this century.

Jeff

December 6, 2009 6:33 PM

But India has this magical substance called democracy. With it, India can build the most advanced smart grid in the world overnight, without putting in any work. Silly Chinese, they have to work for it; whereas the Indians will only have to talk about it.

fardream

December 6, 2009 7:47 PM

You should not compare the cellular operators - China has far better 2G network in the world with the best coverage - and in some way, cellular networks are just one kind of infrastructure.

Mr Pepper

December 6, 2009 9:05 PM

The Chinese always keep in mind the imperative of keeping their country in one piece. Anything that avails them that imperative in the slightest way they attach maximum effort and attention to. The single-mindedness of this fact should not be lost on businesses, politicans, and anyone else who deals with the Chinese. Also, in taking a long term view, their infrastructure projects are necessarily centralized for maximum impact.

Girish

December 7, 2009 1:00 AM

Indians have made it clear to so called developed nations- we will incorporate technologies that benefit us and not some fat cat enjoying on beaches of Florida. The technologies that will offer positive ROI in terms of reduction in T&D losses, tampering etc for every Rupee of investment will be used. The climate control is responsibility of so called developed nations who have polluted climate in the first place. once they act and show there is merit in some of these fancy ideas, India can decide after consulting its own people. For now climate control is not India's priority and focus.

Saul

December 7, 2009 2:24 AM

Bruce, how dare you write any more articles pointing out China is in any way better than India!!! Doesn't India have democracy as is therefore destined to beat every other country to become the world's next superpower? Isn't it part of your job as an American journalist to brainwash everyone into thinking that that democratic India are always triumphant over authoritarian China?

Snoz

December 7, 2009 3:16 AM

The degree of capitalism allowed in China or India will decide which of the two will have the better smart grid system. In the People's Republic of America excessive regulation have preserved the status quo for the utilities as well as formed entry barriers against new competitors. Incumbent utilities have fraternized and "gamed" the regulators into passing regulations that stifle competition and raised rates. Is it any wonder that US utilities are slow to build their own smart grid?

Jeff&Bob

December 7, 2009 5:11 AM

I am waiting to see how Bruce going to be trashed by an onslaught of indians troppers for this shameless article.

hehehe

Jeff&Bob

December 7, 2009 5:24 AM

Bruce why you must put China in your articles to criticise india? Replace China with any Far Eastern countries name like Japan or SK the result will just be the same. They all have the edge over India. Japank/Sk is a better example because both are democracy. Indian cannot use the democracy argument to deny any critic. See more effective :)

Bill Sardi

December 7, 2009 7:45 AM

Americans do not understand that their power companies are not working in the public's interest. The power companies want shortages of power and greater demand than supply to prop up rates. Power is being shipped and sold from Arizona to the East Coast because it is more profitable, while California pays top dollar for electricity. China sees power as a cost item that burdens its factories (many Chinese factories can only operate 3-4 days a week because of limited power). The U.S. sees power as a growth industry that needs to increase profits. There is cable technology that the Chinese are embracing that eliminates line loss and transmits twice the amount of power on a transmission cable. U.S. power companies are dragging their feet, even though this technology could be implemented with no net cost due to $60 billion of electricity that now can be billed instead of lost in transmission from point A to point B. Keep this up and the U.S. will become a second-rate country.

Miles

December 7, 2009 9:22 AM

Girish - very well said! What's next from the "developed nations", you would never know. At the same time, India should accelerate the deployment of new nuclear power plants and the recent agreement with Russia would help!

Bilanski

December 7, 2009 1:55 PM

Interesting about the perceived stifling effect of having "only" three cell phone companies in China.

How many does the US have? How "innovative" are the services they provide? Please actually do a comparison before such a blanket statement. Compare to European and Asian cellular markets, US' is far behind.

Bilanski

December 7, 2009 2:12 PM

Saul, very funny.

Can't disagree with you. When reporting on China and India, the difference is China's achievements aren't reported (eliminating hunger, reducing poverty, better infrastructures, more peaceful society despite those shark-feeding-frenzy reportings of Tibet and Xinjing) nearly enough. Our media seems to have an ax to grind digging up social ills as if they are unique to China. Whereas India have many folds in those social ills, corruptions, rebellions and insurgencies.

This political correct crap created by the politicans and media instructing us which countries to hate and which to love undoubtly creates a lot of lemmings in our societies.

FriendsofIndia

December 7, 2009 10:06 PM

How dare you compare India to China? India is the world's largest democracy; with Indian democracy, even pigs can fly. For proof, talk to my pig in my kitchen; he is fully content with his little fence and the leftovers we feed him. Whenever I mention our Hindu democracy to him, he is so happy and flies all over my kitchen with whatever dirt I have to clean up later. So with our Hindu democracy, we will pass China in no time, and in a little bit more time, we will pass the USA too. By ten years time, the world will be covered with smart grids from India. Jai Hind!

Demo

December 8, 2009 7:33 AM

There's a thin line between love and hate. Judging by the nature of speech deployed above by our democratic friends here, I bet Indians will start loving Bruce in no time.

And Bruce, what grids? Please, you need to learn one thing that Indians are FREE. So what are grids for? It's value that matters!

Grids or no grids, democratic India already is the superpower of the world, before we even count in enormous demographic dividends yet..

Do you know that Indians is the richest community in the US?

Do you know how many Indians billionaires are within the World top 10 rich list? Needless to mention how many CEOs are Indians...

Do you know India is THE IT superpower of the world? Call centers of India has are start-of-art, with operators speaking fluent English. They worth much more than Microsoft, Oracle, Sun combined and are light years ahead of China.

Do you know that India missles can reach Harbing - the most northern province in China?

And once India's world-class nuclear sub leaves the harbour, even cows in Mongolia will run wild aftering noticing its engine sound... And what grids you are talking about? BAH!

Jai Hind!

Sorry to be here

December 8, 2009 6:24 PM

Why are there so many trashy comments? Is this a rant section for Chinese and Indian nationalists? I felt like reading a tabloid than a blog from a respected business magazine. Why is business week putting up with this?

sapan

December 9, 2009 1:49 AM

Bruce, India may be behind china as u can see from outside, but when dig inside and check then you will find that the internal freedom, which is extremely important for the growth, which is seen in US model, which has been tremendously successful. And this freedom tha will drive india beyond china. And here you have to find the meaning of freedom....

AChinese

December 10, 2009 3:36 AM

-Sorry to Be here
As a Chinese nationalist, I enjoyed the comments. They are so amazing and a lot of fun.
-Demo
Sorry, but some typos: it's Harbin rather than Harbing, and it's a city rather than a province. And Mongolia is an independent country - I hate to say this but China has only a province called Inner Mongolia.

Prashanth

December 14, 2009 1:13 PM

I am a happy Indian.
Stop all the country bashings.Both have advantages and disadvantages.
Businessweek ought to be given a lesson in journalism.
I am happy because my beloved country gives me freedom and peace.

Prashanth

December 14, 2009 1:16 PM

China started economic reforms in 1965 and India in 1992. You cant compare both.

C. H. Ng

December 16, 2009 1:54 AM

1) @Prashanth : you are right; there is nothing to compare since China got a headstart of 27 years.

2) @Demo : Your country might have the largest number of billionaires, the richest community in USA, the brightest brain in IT..etc, etc but why you never ask yourself how come your country still lagged poorly behind many other countries, no need to mention the superpower nations? And so what if your country's made missile can reach as far north of Harbin in China? Are you going to tell your government to fire one there? Would your leaders so stupid to do it? I don't think so as they don't have cow's brain like some of you people do...!

3) @To The Rest Who Always Like To Mention About Your Democracy :
Democracy or Dictatorship or Monarchy or
Totalitarianism...they are more or less the same, meaning they got both the good as well as the bad points. It's only good IF the system and/or the people behind the power HAVE the nation & her people's interest at hearts. The government can be anything but if it can bring much development, peace & progress to the country & her people, only then it's a good government. Other than that, it means NOTHING. So what's the point of boasting the world's largest democratic nation when many of her people are still living in poverty & lack many basic necessities? But then again for those who still think it's worthed it for the sake of their so-called "freedom", by all means live the life you want to as it's your choice anyway but please try not to "promote" it here. To us it sucks & we do not want it that way.

Michael Smith

December 21, 2009 7:25 AM


Einhorn articles comes across as incoherent rants and rambles. Unprofessional and low quality journalism.

Michael Smith

December 21, 2009 7:33 AM

Einhorns modus operandi, views and articles are based on the fact that he is paid by the Chinese the monetary rewards to act as informal Chinese spokesman in return for bribes and fees.

Einhorn will keep this a secret.

I am sure this comment will not be printed by Einhorn.

Anita

January 1, 2010 2:18 PM

I think Mr. Einhorn is so shortsighted to ignore the fact that India's population growth is about 5 times more than China's. In the next 50 years, India's population will reach 2.75 billion, while China's will shrink to 1.1 billion. Even with conservative estimate of 20% middle class, India will have 600 million strong by 2060. That will change the world.

RP

January 17, 2010 2:14 PM

The more important issue is why someone like Einhorn would post this at this time. Perhaps because after the defiant response Google to the Chinese tactics of robbing everyone in sight, the western investors are less keen on investing in the myth of chinese "smart grids"? They are looking for alternatives be it India or anywhere else where, things may move slowly due to democratic process, but at least your investment is safe. You don't have the "Pigs" from "Animal farm" rip you off after making you do all the hard work. The world is realizing the myth of the "huge chinese market" and seeing the truth that it is just a trap to lure you into investing your resources and more importantly technology and other intellectual property and stripping it bare and kicking you out.

AJ

January 20, 2010 1:13 PM

While I must agree that China is substantially ahead of India, there is one lingering fear that I have about the country. Contrary to popular belief, China is a highly managed economy. While this has clearly worked wonders for the Chinese so far, there's nothing in the system that appears sustainable.

Ask anyone in Japan, and they'll tell you that success never lasts forever in a guided economy. Good bureaucrats eventually give way to bad bureaucrats, and imbalances build up. China's great, but the risk is unquestionably there.

VC

January 20, 2010 3:45 PM

Again Indians are beating the democracy drum and I am sure, 70% of these Indians are not even in India. I dont know, what good is a democracy if it delays every freaking small project ever concived. Rather be a communist and get the job done. EAT DEMOCRACY !!!

Overseas Chinese

January 31, 2010 6:10 PM

The white christian devil desperately tries to push india against CHINA in the hopes it will be a thorn in CHINA's sight. But they realize that india can NEVER be on the same level as CHINA because they know damn well that india doesn't have "it." The funny thing is is that the indians themselves know that they don't have "it." That certain extra to make one the BEST in the world. No doubt india is developing, but not on the same wave length as CHINA. But like many of you have already pointed out CHINESE people will have to get used to this kind of jealousy from the white christian devils and from the indians. That is just too bad. What sore loooooosers!

The point in comparing???

March 18, 2010 3:34 PM

I am little baffled by this urge for reporters such as these to compare two countries. Neither India nor China are competing with each other. They really are just trying to build their nations up. If China beats India (or vice versa) by say a 100 years, it is going to do nothing except make some stupid and disgruntled people happy or unhappy (And how does that matter). Will these authors next measure superiority by diversity/language etc?..I would rather have articles that constructively critisize progresive efforts in any country, so that people have something to learn, and to use as reference. Grow up, small time journalists. And grow up, people who get into country bashing with every small instigation.

hindu nationalist

April 19, 2010 10:07 AM

I'd like to see a comparison of India's HINDUS with Chinese, to see who is richer or better off. India's Muslim population is far bigger (both in absolute and percentage terms) than China's .. and that's the poorest group in India.
It is no accident that the POOREST and LEAST DEVELOPED states in INDIA (ie: I'm looking at YOU, BIHAR-UP-West BENGAL)just HAPPEN to have the highest percentage of MUSLIMS.
No coincidence, that.

Imran

April 19, 2010 5:35 PM

@Anita, it is not a very boasting thing to have population of 2.75 Billion, out which according you 600 Million will be in their middle income group, I have lived in India all my life beileve me its not something we should boast about, 1.2 Billion is already little more then we can take it. If China has policy to limit its Population, I think so its not very wron we in India also should willingly educate our people the advantages of Limiting population. Its true that China is growing which makes western nations a bit wary about but only time can say what is next in the box. Thailand is a classic example of this, there were predictions of it growing it was a democracy and all of sudden there is rift in the whole country. Western style super imposed democracy is essentially not in goodd health of every country. Western Nations have been consuming all the world resources at a unsustainable level this is getting some competition from Asia this is really hard for them to digest.

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