Prof Rama Velamuri

The Emerging Markets Club launched its activities for the year with a talk titled ‘Demystifying the Dragon’ by Prof. Rama Velamuri, Associate Professor for Entrepreneurship at CEIBS. Having spent 20 years in India, 20 years in Europe, and four years in the US, he moved to China two years ago, completing a global journey, and provided us with his own unique perspective. He started off by giving a personal account of his time in Shanghai, where he lives with his family. The city offers the best of both the developed world (e.g., infrastructure) and the developing world (household help for instance).

Though he agreed that there is some merit in questioning the quality of economic data from China, he also highlighted that the micro data is consistent with the macro data. CEOs of multi-national companies say that their sales are much higher in China due to the country’s higher per capita GDP.

On practically all macro fronts, China’s numbers are significantly higher than India’s. In China, technology diffusion is faster, its labour migration to industry higher, and its healthcare and literacy infrastructure better. On gender equality at workplace (in this context determined by the ratio of working women), China led most European countries.

However, he pointed out that India’s advantages lie in its democracy, free press, younger population, the economy being dependent on private investment, less dependence on foreign trade, and strength in knowledge industries such as IT and pharmaceuticals.

He also said that India lags because of lower literacy, higher manufacturing costs, poorer fiscal position, and weak infrastructure. On manufacturing Prof Rama said that the gap had narrowed on costs due to China’s increased labour costs, the currency appreciation compared to other emerging markets, and stricter labour and environmental regulations in the country.

During the following Q&A session, Prof Rama recommended The China Price by Alexandra Harney and Smoke and Mirrors by Pallavi Aiyar to all interested in learning more.

-  Sohel Bohra, Class of 2010