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Chinese boomtowns wake up to India Inc

On a chilly December 1 morning, a busload of shivering Indian business leaders made their first journey from Shanghai to a southeast city nicknamed 'dragon city,' that makes every car part except tyres and the chassis.

world Updated: Dec 14, 2009 13:20 IST
Reshma Patil

On a chilly December 1 morning, a busload of shivering Indian business leaders made their first journey from Shanghai to a southeast city nicknamed 'dragon city,' that makes every car part except tyres and the chassis.

The bosses from Indian banks to tractor, steel and drug-makers, queued to meet the vice-mayor in a gilded room with two golden thrones. A row of Communist Party officials on one side of the room stared silently at thrice as many Indians seated opposite -- more Indians than they had ever encountered before. One by one, the Indians stood up to describe brands the Chinese may not have heard of...L&T, Thermax, Bhel, Infosys.

The global economic crisis has snapped awake this city with a population slightly bigger than the number of cars in Beijing but over 3,000 global companies -- none Indian. From January, India and China will enter their 60th year of diplomatic ties. But China’s younger business ties with India are now the focus of Chinese factory cities that must diversify for a recession recovery.

“I read about India’s 7.9 per cent GDP. Very marvellous!’’ Zou Hongguo, deputy secretary of the municipal committee told the group.

The interest is mutual. The recession has compelled Indian CEOs to face a China future beyond unaffordable Beijing and Shanghai. Indian industry heads now make frequent trips beyond Shanghai to explore a cheaper China like Changzhou, where business cost is a third of Shanghai’s.

Changzhou sits south of the Yangtze in the eastern Jiangsu state. In 2008, India’s USD 6.3 billion trade with this single state exceeded Indian trade with entire nations like the Netherlands and Russia.

India now wants to collaborate to make hi-tech products, not just buy them from China. “We request Chinese companies to come to our factories and see the high quality products we manufacture,’’ said J J Shrikhande, China head of Larsen & Toubro and head of the India China Business Forum. He also pitched for Chinese investment in Indian infrastructure.

“Our export basket continues to be dominated by raw materials. We would like to see our hi-tech products in China,’’ said Shanghai consul general Riva Das Ganguly before presenting Changzhou a mini Taj Mahal. Indian trade with Changzhou city was worth $392 million in 2008, based on exported textiles, chemicals and electrical, mechanical products.
But Changzhou is obsessed with Indian IT.

“Indian manufacturing? Really? We only know of Indian IT and biopharmaceuticals,’’ replied assistant director Willa Song of the foreign trade and economic cooperation bureau, when HT asked why Changzhou had ignored India until now.

“We want to put Indian IT in every sector of our manufacturing,’’ Michael Liu, investment promotion director in the city’s seven-year-old science and education town, told HT. In July, the town offered classrooms and computers to NIIT, the first Indian presence in a city where vocational colleges produce graduates to work machines in the 60,000 factories. Changzhou wants NIIT to train thousands of students to transform the factory city into a global outsourcing destination.

Next year, Changzhou will be closer to Beijing and Shanghai but cheaper. Beijing, over 1,000 km away, will be four hours away by high-speed rail. Shanghai will be 30 minutes away. The city’s Bus Rapid Transit system was finished in two years. “Tell your government officials to come and see it,’’ said a Chinese official as we drove past the blue bullet-train shaped bus stops on eight-lane roads.

But despite a 439 sq km industrial zone and an ocean port under construction, Indian investors will face a shortage that Changzhou cannot build overnight --- skilled and managerial English-speaking manpower. “It’s a dynamic city but there are not enough managers, engineers,’’ pointed out Nicholas Vautherin, Deputy GM of Longcheng, a Chinese company.

On the surface, the 2,500-year-old city gives the impression it lacks nothing. “I need GPS to drive from the factory to the city,’’ Vautherin told HT. “All the roads are new so I get lost.’’