Despite being different in many ways, China and India are often perplexing to analysts. One of the best examples of such shared perplexity is higher education. From the vantage point of western education service providers, China and India are typical cases of being ?so near, yet so far?.

Expanding capacities in higher education have been critical imperatives for both China and India. Both realise that government efforts are insufficient for providing matching supply responses to growing demands for higher education. Private initiatives are needed for supplementing state-led efforts in augmenting higher education facilities. Both have been trying hard to create an enabling environment for private education service providers, particularly foreign ones. China, in September 2003, invited foreign universities to set up campuses. India introduced a similar Bill in March 2010.

Both countries are used to long histories of the public sector being the sole provider of education services. The higher education architectures have evolved in manners that are consistent with such monopoly provision. Shaking off the legacies of monopoly service and shifting to a market-based system is not easy. China is relatively better placed to manage this transition since it begun reforming its education sector much before India did.

From the perspective of foreign education providers, China and India are deep and wide markets. While the size of the domestic market is the key determinant of their interests, there are many challenges for foreign providers with respect to operations. Many of these challenges emanate from cultural dissimilarities, particularly language barrier and unfamiliarity with local market conditions. Indeed, in this respect, western education providers encounter the typical problems of ?information asymmetry? that arise when entities from entirely different markets interact with each other. These problems became evident in the 1960s, following growth in transfer of patented technology from developed countries and its licensed use in developing country markets. The issues, from a developed country perspective, have resurfaced with respect to trade in education services between advanced economies and China and India. The current asymmetry, however, is more one-sided; education providers argue that recipients know more about their services than they do about the recipient market conditions.

Insufficient information has confined initial forays of foreign education providers in China and India to distance education programmes and efforts aiming to recruit students for home campuses. The latter efforts have been successful. China and India have become leading exporters of students to higher education institutions in the US, the UK, Canada, Australia and Europe. Lately, Singapore, Hong Kong and New Zealand have also become popular destinations for Chinese and Indian students. But problems have begun surfacing with foreign providers shifting to more ambitious models of service provision entailing setting up campuses in host countries.

India?s latest initiative for attracting foreign universities may not receive euphoric response, given the difficulties in choosing the right mode of entry. India?s cupboard for foreign campuses is almost empty, barring rare examples such as the Leeds Met in Bhopal or the forthcoming Georgia Tech in Hyderabad. Even after the latest Bill becomes an Act, campuses may not start hatching overnight. Foreign providers will be hamstrung in their efforts to locate enabling local partners.

In China, degree-granting foreign institutions need to collaborate with a local partner. In India, while the Bill proposes that such institutions can function ?independently or in collaboration?, most providers will scout for partners for better management of local operations. Lack of adequate knowledge about varieties and systems of local educational institutions will make the search for the right partner a long and arduous one. Further, in India, worries will be significant on account of the limited outreach of the regulatory purview. Out of India?s 18,000 colleges affiliated to central and state universities, a little more than 6,000 are recognised by the UGC. There are a large number of institutions offering degree programmes that are yet to be sanctified by the UGC.

What foreign providers also find difficult to comprehend is the nature of involvement of central and provincial authorities in managing education. Both China and India have a large set of compliance requirements in this regard. Thus, much as they understand the virtues of digging into the two countries, they are baffled by the complexities. Indeed, foreign providers must be patient and persuasive. The University of Nottingham, Ningbo, and the Xi?an Jiaotong Liverpool University are good examples of rigorous exercises yielding fruitful results. They can also be useful instances for the Indian market.

The author is a visiting senior research fellow at the Institute of South Asian Studies in the National University of Singapore. These are his personal views