Table Of ContentPalgrave Macmillan Asian Business Series
Series Editor: Rosalie Tung
Conducting Business
in China and India
A Comparative and Contextual Analysis
Deepak Sardana
Ying Zhu
Palgrave Macmillan Asian Business Series
Series editor
Rosalie Tung
Beedie School of Business
Simon Fraser University
Burnaby, BC
Canada
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Deepak Sardana · Ying Zhu
Conducting Business
in China and India
A Comparative and Contextual
Analysis
Deepak Sardana Ying Zhu
Griffith Business School School of Management
Griffith University University of South Australia
Gold Coast, QLD Adelaide, SA
Australia Australia
Palgrave Macmillan Asian Business Series
ISBN 978-1-137-54719-4 ISBN 978-1-137-54721-7 (eBook)
DOI 10.1057/978-1-137-54721-7
Library of Congress Control Number: 2017939554
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For
Mom, Dad, Ankita, and Nivaan,
with love and gratitude
and, Naresh, my friend and brother
—Deepak Sardana
Preface
In the past 10 years, the world has witnessed some significant e conomic
and political upheaval, namely the Global Financial Crisis (GFC) and
the Arab Spring. The outcome of these events had impacted people on
a global scale. These two cataclysmic episodes are starkly different to
one another; one is an economic event and the other is a political event
but with similar roots related to governance and fairness. These events
occurred in two very different contexts—the epicentre of the GFC was
the USA, the EU and Japan (i.e. developed countries) with the potential
to affect other countries, whereas the Arab Spring took place in devel-
oping countries mainly around the Middle East region. Despite very
different characteristics of the two events, there is one element which
represents the common cause behind their occurrence, namely failure of
the institutions.
As the world was experiencing the resultant turmoil (the aftershocks
of which are still being felt), two large Asian countries—China and
India—were constantly providing glimmers of hope. The two countries
have been praised for their social and economic resilience. China and
India were not only growing and developing at their fastest pace during
this period but the societies in these two countries characterized by the
vii
viii Preface
largest populations and several diverse cultures were remarkably calm
compared to several other smaller nations. It is for these reasons that the
prestige of the two countries on a global scale has risen phenomenally in
the past decade. This has resulted in a perceptual change among world
leaders about the role that the two Asian giants are likely to play glob-
ally. The world is thus now talking about the ‘coming of the Asian Age’
and the twenty-first century is being described as an ‘Asian century’.
It is thus an opportune time to assess China and India in a compara-
tive manner through institutional lenses. How robust are various insti-
tutional frameworks in these two countries? How have the institutions
been transformed over the past few decades and with what impact on
the society and business? How efficient and transparent is the market
in China and India? The objective of this book is to give readers an
impartial and honest account of the institutional and business context
of China and India.
We believe that the global euphoria regarding China and India based
on macroeconomic indicators such as GDP growth rate and naive
assumption of a large population translating into a huge market gener-
ate an unrealistic expectation and an illusionary effect, akin to a mirage.
It is therefore important to have the ability to self-assess because the
complexities observed in the context of China and India often allow for
multiple interpretations of a singular situation depending on the per-
spective one chooses to assess. Readers will realize the importance and
implications over the course of various chapters. For example, time and
again, overseas businesses refer to China and India as a large market,
simplistically based on the population count. While several businesses
do succeed due to the huge demand of their product and popularity,
many others have to face a very different reality for a variety of reasons.
It is not uncommon for an overseas company to stop doing business in
China and India over questions of viability, citing lack of sufficient cus-
tomers or excessive competition in the local context that leads to a price
squeeze. Such multiple permutations confuse those who do not have
sufficient background information and are thus not able to judge and
predict business opportunities without a comprehensive understanding
of the institutional, social and cultural norms.
Preface ix
The mirage effect has proven equally true for several naysayers and
doomsday predictors of China and India since they have been repeat-
edly proven wrong (at least until now), given the resilience observed
in the two countries for bouncing back from setbacks and overcoming
challenges.
It is for the above reasons that we choose to dedicate this book to
develop an intrinsic understanding of the present social and regula-
tory context in China and India; without having a fair knowledge of
these, it is difficult and unnerving to live and do business in such intri-
cate and complex societies. China and India offer immense possibilities
of various types to a range of people wanting to live and do business
there, but they must also be aware of the challenges that they are likely
to confront. The transformation that the two countries have continued
to witness over the past several decades makes the following lines from
Charles Dickens’ famous novel originally published in 1859, A Tale of
Two Cities, a very appropriate description of current times. The novel
begins with a description of the state of London and Paris during the
late eighteenth to mid-nineteenth centuries as they were undergoing
evolutionary change:
It was the best of times, it was the worst of times, it was the age of wis-
dom, it was the age of foolishness, it was the epoch of belief, it was the
epoch of incredulity, it was the season of Light, it was the season of
Darkness, it was the spring of hope, it was the winter of despair, we had
everything before us, we had nothing before us, we were all going direct
to Heaven, we were all going direct the other way — in short, the period
was so far like the present period….
As we provide a fairly detailed account of the context in China and
India, we not only critically examine social, cultural, historical, politi-
cal and regulatory aspects in the two countries, but also illustrate the
impact these have on the society and business. We situate and embed
the present context in the historical background, social setting and cul-
tural norms of the countries. The objective is thus not to simplistically
inform the readers of the present characteristics of the two countries’
contexts, but to engage the readers and provide a fuller illustration. This
x Preface
is done with a belief that a broad-brush perfunctory understanding of
the context can at best lead to limited abilities to formulate only very
generic strategies. In contrast, a well-formed and a deeper understand-
ing of the two societies will allow discerning individuals to appreciate
the nuances of business dealings or functioning in the day-to-day life in
China and India. This will assist them in making an astute self-judge-
ment about any definite situation, instead of relying on generic and
prescriptive approaches that are ambiguous and not grounded in a
specific context.
We believe that overseas policy makers, foreign business people, expa-
triate managers and students of business and the humanities (such as
sociology and international relations) wanting to develop a meaning-
ful understanding of China and India will find this book interesting
and will benefit from it. The local citizens of China and India may well
have a greater awareness of their own local context, but they may be
surprised by some aspects that are not commonly discussed or widely
known about their own country and the other country (i.e. China vs.
India). The principal attraction of this book for Chinese and Indian
readers lies in the thought-provoking and debatable comparative
account of their respective neighbouring Asian giant. Hence, we have
designed, investigated and developed this book for the wide range of
audiences in Asia and worldwide.
Gold Coast, Australia Deepak Sardana
Adelaide, Australia Ying Zhu
February 2017
