Indo-China Joint Ventures a Big Deal?

August 17, 2000

Pramod Mahajan's (India's IT minister) recent visit to China and Wu Jichuan's (China's minister of Information Industries) earlier visit to India have resulted in India and China signing a Memorandum of Understanding (MOU) for collaboration in software and hardware.

As per the MOU India is to capitalize on its software expertise while China offers its hardware manufacturing strengths. The two countries are to bid jointly for international IT projects.

China recognizes India abilities in software and India likewise realizes China's proven skills in computer hardware. As per the Wall Street Journal, Mr. Mahajan said, "China already has hardware but they are no masters of software. India has software. Hence we are natural allies. Together we can be global players."

There have been interesting developments between the two countries in the last year. These include NIIT and Aptek (two of India's leading software training institutes) opening up centres in China. Also, Huawei Technologies Co., one of China's leading Telecommunications-hardware manufacturer has opened up a research centre in Bangalore.

India having opened up its markets for Chinese home appliance companies has created a huge market for Chinese companies facing market saturation within China. It remains to be seen how Indian software companies can remain competitive and innovative to address the needs of fast growing China.

What will be interesting to see if it is indeed possible for leading Chinese hardware manufactures and leading Indian software giants team up together on bids for international projects. Would it be possible for these companies to employ some of the same tactics as American companies like KPMG, Cisco, IBM etc (who often bid jointly on large scale projects)? Can two different cultures socially and politically come together smoothly and take on the West?

Nevertheless it is very positive that the two largest populations have an intention to work together despite their democratic and social differences. One surely hopes that the two countries jointly execute a major project.

There is no doubt that India and China can indeed hasten the transformation of the world into a single global digital economy (if there is ever going to be one). What is more immediate is the opportunity for Indian and Chinese entrepreneurs to tap two huge markets of Indo-China.

- Bangalore Nanjunda, Washington DC, USA

The views of this column are the author's own, and do not necessarily represent the views of NRI Online.

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