A simple example is using mobile telephony to leap over the requirement for fixed line networks. The need for sustainability will drive technological change that in turn will make it possible to realise a better standard of living without repeating all of the mistakes of the developed world.

What do you think are China’s major problems? Are there currency and repatriation issues to contend with?

China has not yet completed its transition to a market economy. Notably retail prices for energy are still controlled, capital allocation is inefficient, and the exchange rate regime is not market-oriented. The focus on growth has produced major air and water pollution problems. Finally, growth has been uneven, faster in urban areas and the coastal provinces, leading to income disparities and social tensions.

Over the next few years, there need to be adjustments in the economic growth model to improve sustainability and distribute the benefits of growth more widely. The Chinese currency is now in a period of managed appreciation and the pace of appreciation is expected to increase, while the currency regime gradually becomes more flexible. So far this process has not affected export growth or economic growth generally.

Corporate repatriation of profits is a routine business decision, subject to approval of the annual corporate tax return. Most foreign companies are reinvesting their profits for growth in China rather than repatriating them.

You have worked for governments and government bodies across the world be it Hong Kong or Gujarat. Is it a good idea for governments to use their swelling forex reserves for investing abroad?

In the current global environment, some governments unavoidably accumulate large surpluses due to the large current account and fiscal deficits of the US, and the demand for energy and other commodities. When those surpluses exceed the amount required to manage the risks associated with cross-border exposure, the question then is how to invest them productively. I do support sovereign investment funds as one way to accomplish this. One must recognise there will be resistance if investment decisions by such funds appear to be made on other than commercial grounds. This will probably lead to the establishment of new government review and approval processes (such as already exist in the US) and to the expectation of greater transparency on the part of sovereign funds.

Do the Chinese make good JV partners? Are there lessons that Indian business can learn from China, and vice-versa?

As is the case everywhere, joint ventures are difficult to manage because the aims and interests of the partners tend to diverge with the passage of time. We generally advise clients to pursue wholly foreign-owned entities unless there is a specific regulatory or business reason to go for joint venture, but there have been many successful joint ventures with Chinese partners. The key to success is patient and thorough due diligence when the joint venture is established.

What is the road ahead for India and China together?

My recent experience in both countries suggests that China and India are very interested in each other, don’t yet know each other well, and have yet to realise the potential of working together as trade and business partners. Clearly India needs to improve its basic infrastructure and education system with the goal of making the entire population functionally literate. China needs to improve economic efficiency and learn how to nurture innovation. Undoubtedly they can learn from each other, but each has to find its own path based on its distinctive society and culture. In that sense, I don’t think the learning process will be simple or straightforward, but it will be fruitful for both.

Bio:

Mr Murck, a graduate from Yale, taught for two years at the Chinese University of Hong Kong. He subsequently took a doctorate in East Asian Studies at Princeton and was a Mellon Fellow at Columbia University before becoming a banker. During his doctoral research, he spent two years as a research fellow at the University of Kyoto in Japan. He is a current trustee and former chairman of the Yale-China Association. Mr Murck speaks and reads Chinese.

He joined Apco ( www.apcoworldwide.com), a global communication consultancy, in 2001, and has focused on financial services, corporate advisory and intellectual property rights. Mr Murck has served two years as a director of the Bank of Shanghai, having been nominated to the Board by the International Finance Corporation.

His prior experience includes: a five-year stint in Beijing as managing director and senior country officer of the Chase Manhattan Bank; another five years in Taipei, where he ran Chase and its predecessor institution’s Taiwan operations; and a 11-year stretch in the international division of Manufacturers Hanover Trust Company in New York, with responsibility for various countries in the Asia Pacific region, including Japan, Hong Kong and Australia. Mr Murck was also chairman of the American Chamber of Commerce for 1995 and 1996.