Interview with Ramesh from Business Musings

Anyone who's ever clicked on the "Comments" section of this blog should be familiar with Ramesh from the blog, Business Musings. Ramesh has been reading and commenting here frequently for a couple years now.

Whether it's on his own blog or commenting on what I've written, I always enjoy reading what Ramesh has to say. His perspective - which comes from being an Indian with extensive work experience abroad in China, Europe, and the US - is one-of-a-kind. Add on to that point-of-view the positive and constructive attitude he brings (something that can be tough at times to find on the internet) and I'm really glad that I've been able to get to know him through his writing these past couple years.

I asked Ramesh for an interview several days ago. I wanted to pick his brain on a number of big issues and questions I've had about China, India, and the US.

His responses did not disappoint:

On China
Where did you work and how long did you live in China?

Ramesh: I lived in Guangzhou for 3 years and a bit.

What are some of the positives and negative aspects of doing business in the Pearl River Delta region?

Ramesh: Positives of doing business in the PRD were:

- Huge government support. I am in the outsourcing industry and Guangdong had realised that it was overweighted in manufacturing and underweighted in services. So the government was willing to do a lot to get services to grow. Professionally – not pork barrel.
- Talent availability and their proficiency in multiple Asian languages. China is unbeatable in sheer proficiency in every imaginable Asian language
- Great infrastructure as everywhere else in China
- Proximity to Hong Kong . We often underestimate the influence of Hong Kong in the economic growth of China. You see it for real in the PRD

Negatives of doing business in the PRD

- Surprisingly, educated talent from other parts of China don’t want to come to Guangdong. Climate, “funny language” (real quote !), miss home, all sorts of reasons. While workers are incredibly mobile in China, the educated elite don’t want to move !
- Unwillingness to go global. This amazed me as Chinese have traveled everywhere in the world. The worker still goes anywhere. The educated elite wants to stay – in three years I couldn’t coax a single guy to work outside China
- Too much factory mindset. Aptitude for the service industry is still in its infancy
- Not a specific PRD problem, but English is a huge huge challenge. This is where I don’t see China competing with India for the next 50 years.

Did you have a chance to work in any other regions in China? Do you have a feel for how business operates in Guangzhou compared to the rest of the country?

Ramesh: I think PRD has a much higher Hong Kong influence and hence much more global. The Canton fair is really one of a kind. Otherwise I think business up and down the Eastern coast is not very different. I have no experience inland.

Is there any advice that you would give to a foreigner moving to China for a new work opportunity?

Ramesh: Learn Chinese before coming !! I didn’t do that and really suffered in the first year. Otherwise an open mind and willingness to make the effort to accept the culture will do wonders. The Chinese are so friendly that its easy to get well settled.

What were the greatest positives and negatives you found in Chinese workers? Management?

Ramesh: While generalisations are never correct, I’ll attempt some anyway. Easily the biggest positive was the work ethic. Everybody works hard without supervision. It was easy to bond a team – much less distraction, politics, etc. There was a sense of pride in what they do; so easy to motivate.

Greatest negative was a real paucity of creativity. Innovation comes very hard and unless really driven , does not happen. But my biggest surprise was the difference between the factory worker and the educated elite. I noticed the educated elite starting to become soft. The virtues of hard work, ambition, drive all seem to be waning away. This was a shock to me ; totally unexpected. Maybe just my experience, but I could see it big.

On India
Where in India are you now? Are you planning on staying indefinitely?

Ramesh: I am now in the southern Indian city of Bangalore, famous for its IT companies. It has a population of about 5.5 million, has a big economy because of IT and is fast growing. Yes, I plan to stay in India for the foreseeable future – don’t think I’ll live in another country for at least the next 5-10 years.

Does India's growing economic growth trickle down to all? Or is opportunity limited to major urban centers?

Ramesh: The answer is a paradoxical Yes and No. The rich poor divide in India is extreme. For the rich and upper middle class it has been a bonanza time. The lower middle class has also risen, but compared to those above, less so. The challenge in India is the poor – both urban and rural. The benefits of growth are trickling down, but slowly. The problem is that the majority of the population is dependent on agriculture which hasn’t grown all that much. Having said that, there has been significant improvement for all; but human nature is such that it’s easy to look at somebody who has benefited more and feel having been left behind.

Why has China grown faster than India? Can India be competitive with China in the global economy?

Ramesh: China has grown faster because it started reforms earlier and has implemented them far better. One major difference is the public vs private ownership of land. China has financed much of its growth from government ownership of land. Its far more difficult to do so when faced with private ownership in India. India and China will compete and in some areas where there is natural competitive advantage India may score. But by and large my belief is that for the next 20-30 years, China will be significantly ahead of India. After that, who knows !

Do you feel India's democracy in anyway puts it at a disadvantage to China? I've heard pundits in the past say China's "decisiveness" has helped put it ahead of India. Does India's leadership put the country in a position to succeed?

Ramesh: Yes, India’s democracy does put it at a disadvantage when it comes to economic growth. China can implement better. India for example struggles with getting big factories up and running, because there is always opposition to land acquisition, especially in agricultural communities. Land being privately owned, there is always opposition, so starting a factory takes much much longer. Another problem with India is that there isn’t a single party government, but a coalition. That’s the worst case scenario for reforms. I believe democracy with a single party in government is the ideal solution for India. If that happens, then democracy will not be a major deterrent to growth. Unfortunately that’s an unlikely situation given the fractious nature of Indian democracy.

On the US
When did you work in the US and for how long?

Ramesh: I have been on and off to the US for the past 15 years. Never lived permanently, only a few weeks and months at a time, mostly in the East coast. I have probably been to 20 out of the 50 states.

In the past, on posts on your blog and on comments on my blog, you've spoken very optimistically about the US and the entrepreneurial attitude of its people. Could you expand on this a bit more? In a globalized world, is there still something that sets the US apart from other countries?

Ramesh: I could go on and on. The US is in my opinion unique in the world. There is an absolute meritocracy that I haven’t seen anywhere, and I’ve worked in Europe too in addition to Asia. It’s the easiest culture in the world to assimilate in or do business with, because most Americans respect people for their ability, not their background. The US is the freest country in the world to do business in and that’s why it attracts the best talent in the world. Work ethic in the US is miles ahead of Europe and on par with Asia. For sheer creativity no country even comes anywhere close.

Its reflected simply in one undisguised fact. Ask anybody where he would live, if not in his own country, most people would say the US. The Economist once carried a brilliant piece. Covering street protests in Iran against the US the reporter said – the chants were Death to America, Privately the protesters asked him – How can I get a green card !!

What are some differences you found doing business in the US as a foreigner compared to China?

Ramesh: There is almost no comparison ! In the US, I came and simply did business – the system is familiar, the language is familiar, the business practices are familiar, what you see is what you get, I am not a lao wai, and there isn’t a stacked deck when competing against a local company.

In China, I had to learn to do business. And by the time I left, I don’t think I learnt half of what I had to !
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I want to thank to Ramesh for taking the time to share his thoughts with me. Be sure to keep up with his blog here.