Monday, September 05, 2005

Elephant in the Dragon's Shadow

It's been a long time, isn't it? Yep, now that I know that I can live without blogging, let me live with it.
In the past week I've read quite a few news clips on Indian IT firms planning their entry into China. As China is expected to a major player in the IT scheme of things for the future, our companies are setting-up their development centers in China. Except for their English skills, the Chinese are as good as the Indians. I'm just wondering which of the countries would be cheaper, given that the main reason behind western companies sending their projects to the east is to save on costs.
Now that raises another doubt. If Indian IT majors see gains in setting their centers in China, then wouldn't the Chinese manufacturing firms also gain by setting their manufacturing plants in India? Or is China too cheap compared to India?
I know of one China-based MNC in India - Huawei. That's a telecom major that used to absorb lots of employees from the French telecom MNC that I used to work for. They used to pay twice the salary for the people shifting. I recently heard that they charge at one-half to one-third of their western counterparts. That should mean that the western companies are used to making a huge margin, isn't it?
Now what made me think about Huawei all of a sudden? This did http://www.business-standard.com/bsonline/storypage.php?&autono=199184
When the telecom ministry can run behind Intel to get it set-up its plant in India, then why not just accept Huawei's plans of investing $100 Million in the country? There is more to it than what meets the eye. So it seems from the Financial Times report http://news.ft.com/cms/s/417c28aa-17f4-11da-a14b-00000e2511c8.html that claims the India's security agencies' "reservations regarding [Huawei's] links with the Chinese military, their clandestine operations in Iraq, and close ties with the Pakistani army"
Going back to the topic I started with, will dragon and the elephant be direct friends, or will they only be common friends to the kangaroo and the 50 states?

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