China & India : a comparative analysis of two of Asia's powerhouses

Vallabhjee, Bhavtik Choonilal (2004-12)

Thesis (MBA)--Stellenbosch University, 2004.

Thesis

ENGLISH ABSTRACT: According to the Economist, India and China (amongst others countries) are expected to be the leading economies of the 21st century (The Economist, October 2003: 78). Significant FDI has been invested into both these countries - China to a much larger extent than India (2003 - China: US$58 bn; India: US$3.8 bn - Refer to Table 2.2, Table 3.2, and the graph in Appendix 6.4). To the best of the writer's knowledge, there has not been any study comparing the economic and operating environments of these two nations, and the attractiveness of investment in them. The purpose of the project is to conduct a comprehensive study to examine whether equal investment in India would be worthwhile, by comparing the economic and operating environments of India and China. The research methodology included both primary research and secondary data analysis. The primary data were gathered through personal and telephonic interviews, while the secondary data were obtained from books, journals, the financial press, articles, the Internet, and case studies. The interviews comprised a blend of open and closed questions to extract the most accurate responses from interviewees. Six South African companies were interviewed - four operate in India and three operate in China. (One of these companies - SAB Miller operated in both these countries). The companies operating in India were Shoprite Checkers, SAB Miller, Nando's International, and Old Mutual. The countries operating in China were Kumba Resources, SAB Miller, and Barloworld. The research identified several similarities as well as some differences between these Asian nations. In conclusion, the research revealed that China and India are at present seen as the favourite investment destinations by many multinational businesses wishing to expand abroad. Yet both these countries, despite their similarities and the lure of great potential, are very difficult markets to operate in, and require careful planning, analysis and thought before expansion into these countries.

AFRIKAANSE OPSOMMING: Volgens The Economist sal Indië en China (onder ander lande) na verwagting die toonaangewende ekonomiee van die 21ste eeu wees (The Economist, Oktober 2003: 78). Beduidende bedrae in buitelandse direkte investering is in beide hierdie lande belê - tot 'n baie groter omvang in China as in Indië (2003 - China: VS$S8 miljard; lndië : VS$3,8 miljard). (Verwys na tabeI2.2, Tabc1 3.2 en die grafiek in AanhangseI 6.4.) Na die beste wete van die skrywer bestaan daar geen vergelykende studie van die ekonomiese- en bedryfsomgewings van hierdie twee volke, en die aantreklikheid van belegging by hulle nie. Die doel van die projek is om 'n omvattende studie te onderneem om vas te stel of gelyke investering in Indië lonend sal wees deur die ekonomiese en bedryfsomgewings van lndië met die van China te vergelyk. Die navorsingsmetodologie het beide primere navorsing en sekondere dataontleding ingesluit. Die primere data is deur persoonlike en telefoononderhoude versamel, terwyl die sekondere data uit boeke, joernale, die finansiele media, artikels, die Internet en gevallestudies verkry is. Die onderhoude het bestaan uit 'n mengsel van oop en geslote vrae om die akkuraatste reaksies van onderhoudelinge te verkry. Daar is onderhoude met ses Suid-Afrikaanse maatskappye gevoer - vier doen sake in Indie en drie doen sake in China. (Een van hierdie maatskappye - SAB Miller - doen sake in albei hierdie lande.) Die maatskappye wat sake doen in Indie is Shoprite Checkers, SAB Miller, Nando's Internasionaal en Ou Mutual. Die maatskappye wat in China sake doen, is Khumba Resources, SAB Miller en BarloworId. Die navorsing het verskeie ooreenkomste asook sommige verskille tussen hierdie Asiatiese nasies geidentifiseer. Ten sIotte, die navorsing het onthul dat vele multinasionale ondernemings wat graag in die buiteland wil uitbrei, China en Indie as die jongste beleggingsbestemmings oorweeg. Tog is albei hierdie lande, ondanks hulle ooreenkomste en die lokmiddel van groot potensiaal, baie moeilike lande om in sake te doen. Dit vereis versigtige beplanning, ontleding en denke voor daar na hierdie lande uitgebrei word.

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