Buzz Archive:
Private Equity in the Age of Globalization: China and India - Part 2 of 2

by Arjun Sethi, An advisor and angel investor in early stage startups, 3/20/2008

With populations of roughly 1.3 billion and 1.1 billion, China and India are respectively the first and second most populous nations on the Earth. They share parallel interests - and face equally concomitant difficulties - in succeeding in their struggles to meet the needs, demands and ambitions of populations of such magnitude. Widespread poverty, inequality, social unrest and even political upheaval are conditions that persist both in remote rural regions and concentrated urban centers and represent genuine challenges to those nations' prospective emergence as major players in the world community.

By the same token, the magnitude of potential inherent in such national labor forces, consumer interest and resource authority increasingly has coincided with a heightened openness toward internationalization of corporate and trade interactions. On both the global scale and within their domestic contexts, the Chinese and Indian political leadership have come to recognize that it is in their respective national interests to engage in economic activities that presuppose largely unencumbered economic interdependence.

We first focused on India, now the author focuses on China, reviewing such topics and issues as:

• Cronyism in China
• Fiscal considerations at prospective odds with western moral preferences which, oddly enough could lead to:
• Prospectively diminishing attractiveness of investment in India
• Long-term attractiveness of the Chinese market