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'Both India and China look down on each other'

Journalist. Author. Entrepreneur. One of the Western world's top authorities on China.

James L McGregor, the former Beijing bureau chief of The Wall Street Journal and best-selling author of One Billion Customers: Lessons From the Front Lines of Doing Business in China, wears many hats.

A pioneer of the Chinese Internet, he served as an advisor to many Chinese Internet startups, served as chief executive of Dow Jones & Co in China and vice-president, Dow Jones International Group.

He is a founding partner of BlackInc China LLC, an advisory firm which deals with cross-border investing involving Chinese and American Internet technology and online media companies.

In Mumbai for the Asia Society's 16th Asian Corporate Conference last month, McGregor spoke to Deputy Managing Editor Ramananda Sengupta and Nikhil Lakshman to discuss India and China, and the challenges ahead.

Part I: 'Manmohan is India's Deng Xiaoping'

What about Chinese nationalism?

Chinese nationalism is worrisome if China feels threatened.

In the 1990s, after Tiananmen, China was worried that their young people were too enamoured with the West, particularly with the US.

A propaganda line ran through the media that if China gets rich, others get poor, especially America, so America has a secondary agenda of keeping China poor. So when the American Congress would make noises about democracy or try to block China's bid for the Olympics and things like that, it would resonate among many people in China, that this is part of the American agenda to keep us poor.

Then there was the bombing of the Chinese embassy during the war in Yugoslavia.

Yeah, that was incontrovertible evidence, wasn't it?

So at the end of the day, they built a nationalism of resentment. That they were victims. And that they had to all be together to take on the world. That is very dangerous. And we saw some of that with the anti-Japanese demonstrations a year ago.

But since they got the Olympics, and since this new government came in, Hu Jintao and Wen Jiabao, they are now talking about a nationalism of pride. 'We are Chinese, look what we've accomplished. We've got the Olympics, we've got the Shanghai Expoworld in 2010, and we are feeling good.' And that's much better.

If China feels weak, it could get irrational. And then we've always got that Taiwan issue sitting there.

We in India tend to believe that the Chinese look down on us. How do the Chinese see us?

I think you guys both look down on each other in your own way. You both feel that you have the superior civilisation than the other one.

The Indians feel they have a much stronger intellectual system, a much stronger political system, with debates, and courts and freedom. The Chinese think the Indians kind of waste their time on all these debates and things.

Last night, after Prime Minister Singh's speech, I asked a Chinese guest what he thought about his plans to convert Mumbai into a Shanghai, and he said, 'The Indians just talk, they never do.' That's their attitude. So it's very mutual. But I don't think it's mean-spirited, it's just different civilisations.

Maybe like the way America and France look at each other. Or France and Britain. We can travel to each other's countries, we can be friends, we can inter marry, but as civilisations, as cultures, we kind of have this resentment of each other. But we work and co-exist together quite well. I don't think there's any hatred or strong ethnic rivalry.

Image: A Chinese child waves China's national flag at Tiananmen Square before the opening ceremony of the National People's Congress or parliament, March 5, 2006, in Beijing.

Photograph: Cancan Chu/Getty Images

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