Back in 1997 when I landed here, China was a different country.
It was still opening up. Expats were very few and China wasn’t yet making the headlines. Private education was a big no-no. NIIT had to take permissions from six bureaus and was allowed to do business only in Shanghai.
Today, NIIT is working with 135 universities in China. NIIT’s course is now part of the college curriculum. China, the world factory, too, has come a long way with its sizzling growth.
What strikes you most about China is that once the goal is set, the entire state machinery works towards it. Last year, 1.4 million Chinese graduates could not find a job. Last year, the mayor of Wuxi city came and said, “Tell us what you need — we want you to train our kids.” They did everything — set up a physical infrastructure to train 1,000 and a dorm for 600 students besides offering 3,000 Renminbi as course subsidy — 30 percent of our annual fee. Now, the mayors of Chong Qing, Dalian and Chengdu have asked us to replicate the model in their cities. As long as our course helps the Chinese youth get jobs, they are willing to support us.
An Unromantic Country
The Chinese Wall defines their state of mind. They are building the $30-billion Three-Gorges Dam, the largest hydro-electric power station. It’s not that Chinese labour is cheap — it’s the indirect subsidy in the form of outstanding infrastructure that makes it work for companies here.
China’s impressive infrastructure awes foreigners. But after the initial awe, they soon realise there is no romance in the society. India is just the reverse — pathetic first impression. But slowly it grows on them as they begin to see the country with all its complexities. Its strength lay in the maturity of its institutions — parliament, judiciary et al — where you are treated like a free citizen with access to certain rights. If only India was able to fix one thing — its infrastructure — it will be sheer magic.
China isn’t a democracy and for the common man it is no big deal as long as his needs and growth is taken care of. So far, the Chinese government has done well — there is progress, lives have dramatically improved. But there is a difference. Unlike India where no one person can change the country’s destiny, China has a dictator — albeit a benevolent one. This centrally governed China is its boon and bane. The government plays God here controlling everything. Hence, decisions are quick, policy-execution is well aligned and progress more certain. But at a time when the economic slowdown is taking its toll, the tendency to blame the government is high. Amid growing inequality, there are 23 million people with no jobs.
Money is the Message
Money is the biggest driver for Chinese workers. Initially, no matter what we did, everybody left office at 5.30. I thought people were disengaged. It took me two years to fix it. I decided to make 50 percent of the salary variable. If you achieved 80 percent of the goals, you got 100 percent of the variable and your take home would be 20 percent more than the industry. Guess what? We had another problem. Nobody wanted to leave.
Unlike Indians, Chinese are great at execution but poor problem solvers. A Chinese professor aptly summed up the difference between India and China for me: Indians can’t work, and Chinese can’t think. But overall this is a nice place for expats. In most big cities, you will find at least one international school. Major hospitals have a foreigner section. China feels safe. Almost 90 percent of the women here work. But economic slowdown has had its impact. You hear of stray cases in Guangzhou where factories have shut down and are relocating to Vietnam.
Export-oriented sectors are reeling. I see an exodus of manufacturing, especially low-end ones, to Vietnam. China may see the bottom 20 percent move out of the country. The average middle class Chinese aren’t yet seriously affected. Expats may have lost their jobs but (I) haven’t yet heard of pay cuts and job losses among Chinese workers. Right now, China is in a wait-and-watch mode. At a macro level, I see a significant shift. Earlier, exporters from China were gung-ho and those marketing into China were relatively less so. Today, tables have turned as exporters are hurting badly while those selling into China are upbeat. MNC CEOs here are under pressure from their headquarters to grow business as the US and Europe bottoms out. But cost cuts is high on priority. For many, this crisis could be one of their biggest opportunities.