1
Introduction
Major institutional disruptions and impacts on businesses and society under the leadership of Xi and Modi
China and India, two Asian giants and neighbours, are similar and distinct from one another in many ways (Sardana & Zhu, 2017). Over the past decades, both countries have sought to play a significant role at the global level. Therefore, it has been important to discuss, debate and compare China and India with respect to their growing geopolitical and economic influence in the world in terms of their similarities as well as dissimilarities in a comprehensive manner.
Comparative studies are especially beneficial if done with sincerity and honesty, because they are highly practical and enhance decision-making. International business and policy decisions are not made in isolation but rest on a multitude of choices that need to be weighted and compared. In such real-life scenarios, sole reliance on macro indicator information is likely to result in perfunctory decision-making. In contrast, enriched and holistic comparative contextualized accounts, supplemented by macro data, are facilitators in such decision-making.
In our previous book, Conducting Business in China and India: A Comparative and Contextual Analysis, we focused on developing a more detailed, meaningful and insightful commentary on the context of the two countries. While we delved into the history for an informed synthesis of the contextual account, we kept the focus on more recent institutional reforms. The narrative tried to establish the linkages and logics behind the evolving institutional context, their shortcomings and the implications for the broader public and the nation. The comparative account sought to highlight both similarities and dissimilarities between the two countries.
The previously mentioned book sought to focus primarily on the period up to the time in which new leadership had just taken control in both China and India. In China, Xi Jin-ping became the president of the People’s Republic of China in late 2012, and Narendra Modi became the prime minister of the Republic of India in mid-2014. Since then, the world has seen an assertive China and India, with transformative and consequential institutional changes that have sought to redefine the domestic landscape in both countries with regional and global impacts.
Napoleon Bonaparte once said, “A leader is a dealer in hope”. Clearly, both Xi and Modi have grand visions for their respective countries; Xi unveiled his ‘China Dream’ (BBC, 2013), and Modi often speaks of a ‘New India’ (India Today, 2020). Yet it is not enough for authentic and transformative leaders to peddle hope; their statesmanship is defined by the sincere actions that benefit the public and transform institutions (social, political, regulatory or economic). Even unintended adverse consequences of their actions are also judged by the sincerity demonstrated by these leaders in the approach to their vision; as famously said by Thomas Jefferson, “[h]onesty is the first chapter in the book of wisdom”. For the “satisfaction lies in the effort, not in the attainment; full effort is full victory”, as stated by Mahatma Gandhi.
The transformative changes unleashed by the governments under Xi and Modi, respectively, have been controversial and much debated, both nationally and internationally. There are divergent views on those changes and their impact on business and the public in general. It is thus important to critically assess the policy actions that have been initiated with an intent to realize those grand visions. It is vital not only to assess the coherence of purpose with the grand idea but also to evaluate the sincerity in approach. This would also provide a meaningful background to the intended and unintended consequences in relation to the outcomes. However, in undertaking such a study, it is important to understand the context well because it allows not only an appreciation of the logic behind the visions and policy actions but also comprehension of the outcome. This book seeks to provide a systematic account of some of the major policy initiatives under the leadership of Xi and Modi.
The structure of the book
The two national leaders, Xi and Modi, are often compared due to their similar strong leadership characteristics; both are dominant and undisputed leaders in their respective countries, and both have a strong nationalistic approach. Surprisingly, similarities also exist between the preceding leaderships in both countries. For instance, both preceding leaders (i.e. Hu Jin-tao in China and Manmohan Singh in India) were less vocal and perhaps in less control, thus emphasizing the image of the current leaders as being more vocal, in command and charismatic (Godbole, 2015). The two current leaders imbue strength and power against opponents and display a determination to pursue their goals. Centralized and decisive decision-making is another common characteristic between the two (Chaudhuri, 2015). Both leaders also speak of their own humble origins: Xi of his rural hardships during the Cultural Revolution period (1966–1976) and Modi of his childhood days selling tea (Chaudhuri, 2015) – experiences which seem to connect them to the masses. Astonishingly, anti-corruption has been a major policy priority for both leaders; however, motivations are different, and hence, the approach to tackle corruption is different. Both leaders draw extensively on nationalistic sentiments. Economy and growth are major concerns in both countries, yet the approach to address these challenges is likely to be different due to the distinct contexts.
The striking parallels between the new leaderships draw on the comparison of the changes that each of the leaders sought to bring about in their countries and the profound consequences. The discourse on the ensuing transformations relates not only to the policy breadth and depth but also to the approaches adopted which are likely to be distinct because the fundamental institutions in the two countries are distinct (Sardana & Zhu, 2017).
This research monograph seeks to analyse the key policy initiatives of the two leaders and the contextual reasons for which these became the focus of their attention. Following this approach, we provide an understanding on ‘which’ policy instruments these leaders chose to define their leadership (Chapter 3), but prior to that, we discuss ‘why’ they chose those policy instruments in the first place (Chapter 2). We also investigate the process followed to bring about the transformative policy decisions (Chapter 4). Notably, this study will entail a commentary on the institutions and any changes made to these. Some of the policy initiatives that we discuss for China are developing structural reform programs, strengthening the state-owned sectors and continuing market economic reform with policy shifts in taxation and financial reforms as well as promoting innovation and technological development, namely the policy of ‘Made in China 2025’ (MIC2025) and developing the ‘One Belt, One Road’ (OBOR) initiative for further international engagement. In the case of India, we deliberate on demonetization, Goods and Services Tax (GST) implementation, policy focus on the Ease of Doing Business Index and reforms to recover dues from defaulting companies (with a focus on the Insolvency and Bankruptcy Code [IBC]).
The policies identified and discussed have had significant implications on business, both large and small, as well as medium-sized, enterprises. Nonetheless, the impact of these policy measures may not have the same consequences for all the different types of businesses. We therefore seek to provide a broad interpretation of the policy implications for different scales of businesses across a variety of industries. In addition, Chapter 5 discusses how businesses reacted and sought to address any challenges resulting from these policy measures.
In Chapter 6, we discuss the impact of the major policy changes on the masses. We discuss only those policy measures that were of direct consequence to the public and examine how these impacted people’s livelihoods and well-being in general. In addition to some of the policies discussed in Chapter 4, we also deliberate on a few other major policy initiatives with significant social implications. We briefly discuss the impact of these policies and the process to implement them. Within the China context, we study in detail policies on poverty alleviation, environmental protection improvement, social insurance for protecting workers and addressing social disparities between urban and rural areas as well as within urban areas. With regard to India, we extensively review the impact of demonetization. Thereafter, we study the government’s initiatives relating to financial inclusion and the provision of basic infrastructure for the public good under various missions (such as Clean India Mission, Smart Cities Mission and mass health insurance scheme for the poor and underprivileged). Finally, we debate the general implications for society of the state of the economy and employment under the leadership of Prime Minister Modi.
We devote Chapter 7, the penultimate chapter, to discuss the recent changes under the second term of leadership of both Xi and Modi. We narrate any changes (if any) to their policy focus and direction in their second terms vis-à-vis their first terms. We discuss contextual causes for the change and the consequences to society, both intended and unintended.
Finally, in Chapter 8, we provide a deep-dive analysis to point out key highlights in the process followed by the two leaders to bring about policy and institutional changes. Based on the analysis discussed in earlier chapters, we try to decipher patterns, if any, of the approach to the changes implemented. We also discuss the policy measures in China and India, respectively, that are urgent and significantly important for the benefit of the nations but that are still wanting the attention of a decisive leader like Xi and Modi.
In order to produce this monograph, we conducted extensive fieldwork in China and India. We interviewed many people from various walks of life – academics, members of think-tank organizations, government organizations, senior executives of industry associations, business owners and executives of large companies. We identified secondary sources by extensively researching government notices and reports, news articles of several established news agencies, published editorial notes, working papers, published refereed journal articles and relevant books published by established publishers. The secondary sources comprised both online and hard-copy documents.
We believe that the book provides a significant amount of understanding of the leadership styles and the transformative changes within the institutional contexts of China and India. The book is particularly insightful for those interested in deciphering the leadership approaches of Xi and Modi. By learning in detail about the process followed by the two leaders in bringing about their most substantive policy measures that would eventually define their governments, readers can formulate their own interpretations and opinions of the leadership styles over and above those provided by the authors. Impartial discussion on the outcomes of the policy measures will help readers further associate the approach taken with the policy outcomes.
The detailed narrative about the context of the institutional changes provides learning opportunities for readers to enrich their knowledge of the institutions in China and India. At the same time, the study showcases both consistency and volatility of change and how these impact business and society in general. The book, we feel, will be of use to overseas policy-makers handling the foreign desks of China and India, expatriate managers, business owners and executives seeking to invest in China and India, and students of business and the humanities wanting to develop a nuanced understanding of these two countries. Although experiencing the context and policy implications in their day-to-day lives, the local readers in China and India may also be surprised by certain detailed facts offered, some of which are under-presented. In short, to inquisitive readers, this book promises to ignite thoughts and present them with an ability to debate more eloquently the defining and most current policies implemented in China and India, respectively, under Xi and Modi, undoubtedly the two most dominant leaders on the world stage.
References
BBC. (2013). What does Xi Jinping’s China dream mean? BBC News, 6 June. [Accessed on 1 February 2020].
Chaudhuri, P. P. (2015). The tale of two leaders: Why Modi and Xi are similar yet different. Hindustan Times, 17 May. [Accessed on 15 January 2020].
Godbole, A. (2015). Narendra Modi and Xi Jinping: Different yet same? Institute of Defence Studies and Analysis Issue Briefs, 13 May. [Accessed on 15 January 2020].
India Today. (2020). Nobody must be left behind in new India, says PM Narendra Modi in pre-Republic Day address. India Today, 24 January. [Accessed on 1 February 2020].
Sardana, D., & Zhu, Y. (2017). Conducting business in China and India: A comparative and contextual analysis. London: Palgrave Macmillan.
