China, India should compete for openness

By Ding Gang Source:Global Times Published: 2017/9/27 20:23:39

Illustration: Liu Rui/GT

Competition between China and India is a hot topic of debate in both countries, but opinions are divided about what exactly the two are competing for.

An article along these lines "Will 'Indian corporate management' become a secret weapon to overtake China?" has become popular on the China Internet.

The article notes that in the Fortune 500 there are 75 foreign CEOs, 10 from India and zero from the Chinese mainland. In a study published in 2005, one-third of engineers in Silicon Valley came from India and 7 percent of high-tech company CEOs were Indian. That ratio should be higher today.

So Indians outnumber Chinese at senior management levels in the top 500 American companies. Does that mean India is more competitive than China?

The answer is "no." It does not even indicate that Indian companies are any more competitive than Chinese.

The fact that Indians work for Fortune 500 companies demonstrates more about how the US and US companies attract talent. The statistics used to prove Indians' management skills owe much to a selective interpretation of US competitiveness.

The Chinese people do lag behind their Indian counterparts in terms of management capabilities at global companies. But that gap does not result from a deficit of leadership skill among Chinese people. It should instead be attributed to the poor global integration of leading Chinese companies as well as a lack of openness notably in their recruitment practices among the global corporate elite.

This is a common problem faced by India and China, with different degrees of assimilation. Thus the number of CEOs in top US companies does not hold much significance.

So far Chinese companies have been trying to make excellent products relying on Chinese talent and technological resources while US companies make theirs using global talent and technological resources.

No one would say Americans are the smartest people on earth. Even Americans do not view themselves this way. They are just good at utilizing talent from all over the world.

When the most capable Chinese, French, Indian and British people, each with their own distinct advantages, work for Americans in a harmonious way, it is not surprising that they can create the best companies, universities, commercial and cultural products.

Apple is the obvious example. With a research team comprised of talent from countries such as the US, China and India, Apple has designed its own graphics processing unit.

Together with world-class accessories such as South Korea-made screens and Japan-made chips and China's manufacturing capabilities, Apple has produced the world's most valued smartphone.

iPhone products combine multiple global advantages such as flexible human resources, an institution that encourages innovation and an open corporate development environment. To put it simply, open-mindedness. Without an open societal and economic system, there would be no world-class companies.

Although the scale of Chinese companies and their globalization surpasses Indian counterparts, frankly speaking the openness of Chinese and Indian companies lags far behind any leading global company. This issue restrains even the most dynamic Chinese and Indian companies.

China-India competition is therefore not really about which side can cultivate the most global CEOs, but which country can create the most open economic system to attract the most global talent.

The author is a senior editor at People's Daily and a senior fellow with the Chongyang Institute for Financial Studies at Renmin University of China. dinggang@globaltimes.com.cn. Follow him on Twitter @dinggangchina

Posted in: DING GANG,ASIAN REVIEW,CHINA-INDIA

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