Business Economics & Services Team (BEST)
Will India Pip China?
There is an undercurrent of competition between India and China in many fronts. The competition is hotting up with every passing year. To a discerning watcher, China is far ahead of India in many fronts. It has had the advantage of a sustained higher growth for almost more than a decade, that has transformed its economic landscape considerably and no country in the recent history can match up with that pace of development it has achieved. It has it gradually grown from a communist country to one that heeded to market forces, from a closed economy to an open one attracting investment from all corners of the world, from averse to investment abroad to one looking for all opportunities to spread its foothold everywhere. On a macro-scale, these are remarkable feats.
India could have a head-start in liberalization, but it was slow in implementing them from a policy perspective. India had a ticking private sector, though it was in the back burner in a mixed economy which kept its policy framework in an equivocal manner. It never swayed from one extreme to the other with the accompaniment merits and demerits. Therefore, its growth might not been spectacular but more balanced. The strong democratic institutions, it has built over the years, might have slowed down the decision making, but did not give powers in a platter to anyone. There were checks and balances and inefficiencies and corruptions were dealt more democratically in the vote bank politics and not through any bloody upheavals. Even the most dictatorial regime during the emergency days was defeated only through a democratic process and not otherwise. Even the switch over to market economy was more through consensus and not through a top down process of imposition. Every important legislation however trivial or important they may be was implemented through a democratic process and that trend is still continuing.
For the developed western economies, both India and China are important since both the continental economies can make or break the world economy. Along with the combined population of close to over three billion, the combined economies can overshadow the rest of the economies put together. Also, these are the two countries where people with aspirations, drive and entrepreneurship live. Of course gaining market access is one thing and more importantly the gains that these countries can lend to every country for absorbing their technologies, funding their investment and also to a very great extent gainfully absorbing their investments and cash flows is another one.
While the rest of the world is clamoring to keep their foot both with India and China for their economic ends, a silent competition is breaking open between the two largest and most populous countries. What are the dynamics of that competition? Both China and India want to check each others growth prospects. For instance, China is far ahead of India in manufacturing, infrastructure and agriculture. India wants to close the ranks with China by embarking massive focus on manufacturing through its Make in India. India is ahead of china in IT segment and it wants to close the ranks with India by indulging in a panoply of tricks and manoeuvrings including sending large number of students to the US for picking up English and getting themselves oriented to the technology developed there. It is also investing heavily in research and development (R&D). It is also carefully nurturing world class ICT companies such as Xiaomi, Huweai and Heir. These are reckoned as world class companies. Importantly, these companies are mostly workers cooperatives unlike companies elsewhere in the world.
Unfortunately, India lags behind in many such areas. Till date, it has not evolved a single world class company or brand as powerful as any developed by China. Its investment in R&D is deplorably low so also its type of management control. Almost all its well known companies are either with multinationals or private sector. Workers cooperatives are laggards in India with some exceptions like Amul. Also, being a democratic country, decision making in India is slow and lethargic. Any attempt to streamline them meet with stiff resistance. So also is corruption, which is deeply rooted in Indian psyche.
Now the question of India piping China to the number one slot among the comity of nations, it is something that has to wait and see. Perhaps, the advantage is now with China.
Will India Pip China?
There is an undercurrent of competition between India and China in many fronts. The competition is hotting up with every passing year. To a discerning watcher, China is far ahead of India in many fronts. It has had the advantage of a sustained higher growth for almost more than a decade, that has transformed its economic landscape considerably and no country in the recent history can match up with that pace of development it has achieved. It has it gradually grown from a communist country to one that heeded to market forces, from a closed economy to an open one attracting investment from all corners of the world, from averse to investment abroad to one looking for all opportunities to spread its foothold everywhere. On a macro-scale, these are remarkable feats.
India could have a head-start in liberalization, but it was slow in implementing them from a policy perspective. India had a ticking private sector, though it was in the back burner in a mixed economy which kept its policy framework in an equivocal manner. It never swayed from one extreme to the other with the accompaniment merits and demerits. Therefore, its growth might not been spectacular but more balanced. The strong democratic institutions, it has built over the years, might have slowed down the decision making, but did not give powers in a platter to anyone. There were checks and balances and inefficiencies and corruptions were dealt more democratically in the vote bank politics and not through any bloody upheavals. Even the most dictatorial regime during the emergency days was defeated only through a democratic process and not otherwise. Even the switch over to market economy was more through consensus and not through a top down process of imposition. Every important legislation however trivial or important they may be was implemented through a democratic process and that trend is still continuing.
For the developed western economies, both India and China are important since both the continental economies can make or break the world economy. Along with the combined population of close to over three billion, the combined economies can overshadow the rest of the economies put together. Also, these are the two countries where people with aspirations, drive and entrepreneurship live. Of course gaining market access is one thing and more importantly the gains that these countries can lend to every country for absorbing their technologies, funding their investment and also to a very great extent gainfully absorbing their investments and cash flows is another one.
While the rest of the world is clamoring to keep their foot both with India and China for their economic ends, a silent competition is breaking open between the two largest and most populous countries. What are the dynamics of that competition? Both China and India want to check each others growth prospects. For instance, China is far ahead of India in manufacturing, infrastructure and agriculture. India wants to close the ranks with China by embarking massive focus on manufacturing through its Make in India. India is ahead of china in IT segment and it wants to close the ranks with India by indulging in a panoply of tricks and manoeuvrings including sending large number of students to the US for picking up English and getting themselves oriented to the technology developed there. It is also investing heavily in research and development (R&D). It is also carefully nurturing world class ICT companies such as Xiaomi, Huweai and Heir. These are reckoned as world class companies. Importantly, these companies are mostly workers cooperatives unlike companies elsewhere in the world.
Unfortunately, India lags behind in many such areas. Till date, it has not evolved a single world class company or brand as powerful as any developed by China. Its investment in R&D is deplorably low so also its type of management control. Almost all its well known companies are either with multinationals or private sector. Workers cooperatives are laggards in India with some exceptions like Amul. Also, being a democratic country, decision making in India is slow and lethargic. Any attempt to streamline them meet with stiff resistance. So also is corruption, which is deeply rooted in Indian psyche.
Now the question of India piping China to the number one slot among the comity of nations, it is something that has to wait and see. Perhaps, the advantage is now with China.
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