As a well-timed prelude to his travels with Governor Tim Pawlenty’s trade mission to the Indian cities of New Delhi, Bangalore, and Mumbai, State Representative Erik Paulsen, (R-Eden Prairie), explored China and India in July and August.
Paulsen traveled with 19 other recipients of the Rodel Fellowship in Public Leadership awarded by the Aspen Institute, a Washington, D.C.–based nonprofit organization. The excerpts below, taken from Paulsen's online travelogue of his trip, give an insiders perspective on the Chinese and Indian economies.
Biz
Ops Still Abound
Beijing, China, July 30. At a business dinner meeting tonight, I met an American gentlemen (married to a Minnesotan) who works with several Minnesota companies by connecting their engineers and ‘know-how’ with Chinese companies. He said it’s the smaller- and medium-size businesses with 100 to 500 employees where there is great opportunity. This is because they provide a needed ‘value-added’ component, such as labeling products with a barcode at the factory (as opposed to shipping products to U.S. customers who label the products themselves), or using other technology to streamline services at the manufacturing level.
This is where American jobs will continue to grow. And he emphasized that there is a strong value in having Minnesota students learn Mandarin and Chinese culture.
China-India
Comparisons
August 4. Indians have a high personal savings rate of about 34 percent. (For the first time since the Depression in the United States, Americans are spending more than they earn!) But most Indians use this money to pay for education, especially studying abroad. India comes in first with the largest number of students in the United States: 80,000. China has the second-largest student population in the United States.
There are many similarities and differences on the energy front for China and India. Unlike China, India does not have coal natural resources, so it must import vast amounts to create electricity. Today, India imports 100 million tons, but by 2030 is expected to import 1 billion tons. This presents a real environmental concern and is another reason why India is looking to wind and nuclear energy supplies.
Unlike China, only 55 percent of energy needs in India are for commercial development purposes. [Editor’s note: China uses twice as much energy as India for commercial purposes, according to Nationmaster.com.] And, due to theft and inefficiencies in the electrical networks that keep India humming, anywhere between 18 percent and 50 percent of the electricity is lost during the transmission process.
Like China, India ranks high as a world consumer of energy and the trend is moving upward. Currently, 57 percent of the Indian rural population doesn’t even have access to electricity yet, so the demand for energy will only increase.
One for the Road
August
7. I could tell you that the key to
driving in India is
simply remembering
to tap on the horn
every 15 seconds and maintain camel
eyes (just
looking
straight ahead like you don’t see anyone else) because
that’s what
drivers here do. But it’s much more than that, and you need to
have nerves
of steel.
The over 130-mile drive from Agra to Jaipur is not for the faint of heart, and it was an interesting experience. It took me about six hours moving on a frequently congested, narrow road that included camels, herds of goats, tractors, buses, industrial trucks, bulls bathing in large mud holes on the road’s shoulder, motorcycles carrying up to four people, overloaded jeeps and vehicles carrying 25 passengers or more hanging off the sides and sitting on the roofs.
After experiencing road transportation in India, it is very evident why an economist told me there are three constraints to India’s continued growth: Infrastructure, infrastructure, and infrastructure. It takes an inordinate amount of time to get from place to place in India, whether by road, rail, or even air.
The government has built 3,355 miles of highways, with another 1,600 under construction and an additional 3,700 miles planned. The massive growth in domestic and international air travel is why dozens of new airports are being built or upgraded. All together India will spend about $150 billion on infrastructure between 2005 and 2010. China invested more than that ($200 billion) in the year 2005 alone.
