Dr. Jagdish Sheth

U.S. businesses need to prepare to either partner with or be bought out by Chinese firms in the near future, as companies in all countries, including those in Georgia, benefit from China and India’s rapid rise as economic powers, said Jagdish Sheth during a May 15 seminar on doing business with China.

With $1 trillion in reserves of capital, China is positioning its companies to buy out major U.S. firms, said Dr. Sheth, the Charles H. Kellstadt professor of marketing at Emory University’s Goizueta Business School. He spoke during an MIT Enterprise Forum of Atlanta event sponsored by Sutherland Asbill & Brennan LLP. 

China’s gross domestic is set to surpass that of the United States in 2020, but China’s economic growth will plateau sooner than India’s, Dr. Sheth said, because its population is ageing more quickly due to its past “one-child policy” that restricted population growth.

In a few years, the G-8 organization of the world’s wealthiest countries will likely expand to be the G-10 to include China and India, Dr. Sheth added. Currency wars will then be fought rather than trade wars, leading to the eventual emergence of a single Asian currency, he said.

Dr. Sheth highlighted the growing importance of an economic partnership between China and India, referred to as “Chindia,” a term coined by Indian economist and politician Jairam Ramesh.

“With the growth of Chindia, all boats will rise,” Dr. Sheth said.

In his pending book “Chindia Shock,” Dr. Sheth said he discusses the rise of Chinese and Indian companies into the global marketplace. With $50 billion in annual trade between the two countries currently, Chindia will soon represent the world’s largest consumption markets, driving new innovation in business to focus on affordability of products, he said.