China looks at their economic interest, we should also do the same: KV Kamath

China keeps its economic agenda separate from other ideological issues and India must also strike a balance, while recognising that we can also produce anything at a competitive price for our large consumer base, according to National Bank for Infrastructure Development Chairman and veteran banker KV Kamath.

“China is interested in their economy primarily. The other things happening at the border and all are ideological issues. When Doklam happened, they were very clear and kept the two issues separate because they want the economic agenda to go on. It is very clear they are playing this on two different levels. As long as it suits us, there is value for us, we should look at it,” he said in a response to a question on how India should handle the geopolitical competition from China, at a Fireside Chat on ‘Transitions and Value Creation’ organised by VC firm IvyCap Ventures’ IvyCap Day 2022 in Mumbai.

He added that India should also recognise that it is a large consumer which can produce anything at an equally competitive cost to what they are doing. “We have a large consuming base that can afford whatever we have to buy.”

The former BRICS Bank chief said India’s startup ecosystem does not have a cost issue with China, and neither does our financial services have a disadvantage over China because our incumbent banks are better placed than theirs. “What we acutely lack is speed. Our rollout of infrastructure is not happening, maybe it’s happening with roads, but it’s not happening in other places. Yet, we are the lowest-cost data provider.”

But he pointed out how China uses technology in its infrastructure and how that could be a lesson for entrepreneurs looking for opportunities. “In China, every single bridge, every single tunnel, the amount of modern technology that has gone in, which didn’t exist say 5-10 years before, in terms of sensors and things like that is amazing. There is a whole lot of opportunity in businesses also using technology,” he said when talking about opportunities for Indian startups in the infrastructure space.

He also pointed out that China is an interesting blend of subsidies. “The subsidies given at the time of the 2009 Lehmann Brothers collapse to keep factories working and support people to buy things have still not been repaid. They kept rolling over the debt. It cannot endure too long. It endured when you grew at 10%+, it cannot when you grow at 4% growth. That’s a challenge for China.”