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In Business, Persistence Key to Braving Indian Hospitality

By Huang Shan and Chen Chao

Despite various achievements, Zhao Quanzhen, country manager of Air China's India office, considers his station a challenge rather than a success. In 2004, he was sent to Mumbai for the opening of a new flight route linking China and India. Seven years later, Air China launched its newest route on May 2 from Shanghai to Mumbai, adding to more than 20 flights a week the airline now operates between the two countries.

However, the business development progress is not living up to Zhao's expectations.

"It's very hard to make profits as the operation costs skyrocket due to oil price hike and various taxes imposed," Zhao said.

The airline manager also knows he is not alone in his struggles, and many other companies from China endure similar obstacles. His sentiment is supported by data on the airline's passenger demographics. Of all the passengers, less than 30 percent are Chinese nationals.

According to statistics, 600,000 to 700,000 Indians travel to China annually while only 60,000 to 70,000 Chinese make the trip to India. Attributing to this disparity could be the imbalance between the numbers of transnational companies: Indian companies in China far outnumber Chinese companies in India despite a US$27 billion trade deficit in China's favor last year.

Perhaps to that end, India has imposed tough restrictions on visas for the personnel of Chinese companies entering India.

"I was holding a business visa during my first few years in India, which meant I had to renew my visa every three to six months," Zhao said. Chinese businessmen also complained about application procedures to get a visa, some having to supply an exorbitant amount of documents while others are made to wait a long time.

"It took my finance director two month to renew his visa early this year," said Zhao.

Visa restriction stands an even bigger barrier for Chinese companies operating construction projects in India.

Chinese people going to India for projects in infrastructure sectors are required to hold project visas, which are issued based on project capacity with the allowance often far from being sufficient.

"The prolonged processing time [of visa application] delayed the completion of our projects," said a representative of a Chinese construction company. "Many technicians were unable to reach the constructions sites in time."

In order to tackle the visa problems, Chinese companies has shifted to employing workers locally, which also enabled them to reduce operation costs and increase profit margins.

"More than 50 percent of employees [of our branch in India] at managerial level are Indians, including translators, human resources directors, financial officers and deputy project managers," said a manager of the same company. "We have created more than 10,000 jobs for local Indians."

However, the Chinese employers worry that this may have created problems with efficiency.

"Sometimes you can't have [Indian workers] getting to work on time, but we have learned to live with the problems," said a human resource manager at the company. "We stipulated regulations and have boosted Indian employees' morale through their Chinese peers. I think the situation is changing for better, though very slowly and indistinctively."

Other challenges for Chinese employees in India include climate, traffic and even difficulty to find an authentic Chinese restaurant. Some, however, have learned to embrace the local customs and culture.

"Everything could happen here – difficulties beyond your imagination," said the representative, "But I do find myself starting to love this place. I've been attracted to its glamorous culture and traditions, and its people's laidback nature in particular."

Despite the obstacles, India's huge market potential continues to lure more Chinese companies to expand in the world's second most populated country. India will invest US$1.2 trillion in infrastructure construction during its 12th Five Year Plan (2012-2017), which could give numerous opportunities to Chinese contractors and heavy machine manufacturers. And once the Chinese companies become accustomed to their surroundings and take advantage of local resources, they will find their trademark lower cost, high efficiency and leading technology make them competitive in India's market.

"Usually, it takes a foreign company more than 10 years to establish a foothold in India," said Zou Yonghong, the spokesperson with the Chinese embassy in India.

"Persistence is what you need in India," Zhao agreed. "That's a conclusion reached by nearly all the Chinese businessmen here."

VOL.59 NO.12 December 2010 Advertise on Site Contact Us