The State and the Internationalisation of Business:
Is There a China or India Model?
29-30 October 2009
Edinburgh University, U.K
A conference to be held jointly between the Confucius Institute for Scotland and the University of Edinburgh Business School
The governments of China and India have pursued significantly different economic development paths over the last twenty years, yet each has continued to assign a key role to state ownership of large sectors of the economy and privatisation has been pursued cautiously. Although both governments have recognised the need for reducing state control, many large state enterprises continue to operate though many now have minority private shareholdings. Large privately-owned and often family-controlled business groups have remained important players in India’s political economy since independence. The private sector, while growing fast in China, is much less influential in the policy making arena than large state and local government-controlled businesses whose links to provincial and city governments are both economic and political.
Although China gradually opened its doors to foreign direct investment (FDI) from 1978, it began to actively pursue FDI from 1992. Local government was incentivised by the centre to compete to attract FDI and was provided with effective tools with which to promote inward investment. India only started serious macroeconomic liberalisation from 1991 yet at a micro-level, protectionist sentiment remained resilient in the business community and bureaucracy. Eventually, competition between Indian states, mostly in the south, for FDI and domestic investment led to a general shift in the business climate. Once the economic benefits of expanding private investment were obvious in the southern states, adopting business-friendly policies rapidly became the new orthodoxy.
Going into the current global financial crisis, both China and India have substantial foreign exchange reserves, yet retain dissimilar economic structures. Foreign trade accounted for more than 60 percent of Chinese GDP, double Indian foreign trade’s proportion of GDP. India’s non-traditional exports are dominated by the IT and IT-enabled services sector, while China’s exports are manufacturing-led and highly diversified. Trade tariffs are low in China and still relatively high in India. Wide regional disparities in wealth exist in both countries. Almost all sectors are now open to FDI in India and China yet protecting domestic business interests is still a strong political impulse in both China and India. Flows of outward foreign direct investment began to build up in 2008 but have since peaked as elsewhere.
The conference seeks to answer some of the key questions about the similarities and differences in the internationalisation paths of China and India and to consider to the long term resilience of their economies. Is China developing an outward-oriented, collectivist growth strategy that is always going to be very different from India? Can this be reconciled with domestic politics? Is India’s preference for a domestic-oriented, large business house-driven political economy compatible with mass democracy, increasing trade dependency and foreign direct investment? Will China and India’s paths converge or diverge? Topics to be covered include:
- The relationship between government, business and political processes at national and provincial/state level
- The role of the state in managing external trade and investment relationships
- The role of provincial/state-level institutions in encouraging inward FDI and private domestic investment
- Impact of the changing structure of domestic industries and enterprises on foreign investment
- Motives and strategies behind outward foreign direct investment from China and India
- Knowledge transfer from foreign investors at home and abroad
- Progress with business climate reform compared
- Corporate governance and environmental protection
- Domestic market development as an alternative to exporting for India and China
- The future position of China and India in the world economy: Are there common features of China or India’s development path?
Call for Papers
Papers are invited that address any of the topics above. The organisers are particularly interested in papers that offer a comparative perspective on China and India’s internationalisation path.
The conference will be held in the Confucius Institute for Scotland in the University of Edinburgh. Some financial support for paper presenters is available through the Confucius Institute.
Deadline of abstract: 30th June 2009
Deadline for full paper submission: 31 August 2009
Please send your abstract, preferably by e-mail to Prof. John Henley at John.firstname.lastname@example.org and Dr Ling Liu at Ling.email@example.com.