Chinese Hare, Indian Tortoise?

[cybernaut]

An Interesting read, not intended for this versus that

Chinese Hare, Indian Tortoise?
About this programme by Peter Day

Chinese intellectuals who visit India are - I know - baffled by the place. The smells! The noise! The chaos! How on earth (they ask me) can this be a country which the experts think will jostle with their own China for the top place in the global economy some time in around 2030?

The prediction is part of the now notorious BRICs thesis, propounded almost 10 years ago by Jim O'Neill, chief economist at the giant investment bank Goldman Sachs. It was not rocket science, but few people had seen so clearly what Jim saw then.

He got his ruler out, placed it on some graph paper, and projected forward the then prevailing economic growth rates for several developing countries, and their population trends. He graphed them against the economic growth rates of the current top economic superpowers ... the USA, Japan, Europe.

And he observed that if the trend lines continued unchanged, then sometime towards the middle of the 21st century, the size of the Chinese (and then the Indian) economy would overtake the size of the hitherto No 1, the USA. And then, since the wealth per head of both much larger nations would still be much smaller, they would go on growing and growing. Russia and Brazil were the other developing countries pushing up the league table, hence BRICs.

Basic stuff, but Jim O'Neill's predictions got world-wide attention, and 10 years later he sees no reason to alter them. China is still apparently growing rapidly, and the pace of growth in India has recently been quickening.

Media

This year China overtook Japan as the second largest economy. Jim has been moving forward his projected crossover point for the eclipse of the US economy by China to around 2028.

So where does this leave India? The question is fascinatingly addressed in a new book by a prominent Indian businessman, Raghav Bahl, founder and CEO of the influential Indian media group Network 18. The book’s title is "Superpower? The amazing race between China's hare and India's tortoise".

He points out that 20 years ago, India's economy was actually larger than China's. Now India's total economy is the size that China had grown to by the year 2000. The Indians are ten years "behind".

Looks a little like no contest, but Raghav Bahl thinks there is time for India to catch up China and the overtake it. And that time may be now.

He thinks that China's dramatic rise was propelled by raw materials such as land, cheap labour and huge public investment that may now be running out of steam unless it embraces much more freedom and transparency. He thinks that India's innovation, entrepreneurship and democratic institutional robustness may prove to be huge advantages in the next stage of this "race".

And thanks to its One Child policy to control its population, China is going to age very fast indeed over the next few years, unlike India.

Umbilical

At Goldman Sachs Jim O'Neill now says: "India has the biggest potential of the four BRICs nations".

Raghav Bahl says that writing the book has reshaped his perspective on the argument; it is not about who will win in the great economic race, he says, but who will lose. Maybe China can - as he elegantly puts it - slice through the (perceived) umbilical cord between democracy and prosperity.

Maybe India's democracy has been overestimated as a national advantage - by the rest of the world and (I would add) by itself. India needs new leaders.

China has the advantage in terms on velocity and momentum, is the way that Raghav Bahl sums it up. But it’s odds on India as the institutional favourite.

The ultimate outcome is still fifty-fifty. Anyone's guess, he thinks. But what an extraordinary race this is ... for everyone, anywhere in the world.

my addition
Jim O'Neill is the first economist to coin the term BRIC and to come up with the thesis on the potential of emerging market. He is one of the first to predict china's expontential rise. So i believe this would be a good read.inviting your comments, i hope the discussion will be a civilized one and not a versus thread.
Thanks

BBC World Service - Business - Chinese Hare, Indian Tortoise?

 

[Chinese-Dragon]

As long as Asia eventually throws off the shackles of Western hegemony, I will be happy with the outcome.

Asia was historically the great power center of the world. The only reason the West managed to dominate, was through the Industrial Revolution and Colonization, with which they stole 200 years of history.

But now the world is reverting back to the original order. And no one can stop the re-emergence of Asia.

 

[cybernaut]

CD,
Well i appreciate your post and i agree to most of it.But in my opinion west stole couple of centuries because they had the lead in technology.
East were the champions in science and maths for a long time in the history and it reflected in our way of life and prosperity.
Until and unless the east , excluding japan take the lead in technology, we will still be behind the west.

 

[Chinese-Dragon]

Well i appreciate your post and i agree to most of it.But in my opinion west stole couple of centuries because they had the lead in technology.

That's what I meant. The reason they had the lead in technology, was because of the Industrial Revolution.

The reason the Industrial Revolution first occurred in Britain, was because the coal reserves were close to the surface and easy to access.

If the Industrial revolution had happened in Mongolia, the world would have been completely different.

 

[Nalwa]

To be fair, the West (and a lot of us Indians) over-exaggerate the advantages of Indian democracy. What is to say that the Chinese cant find a middle path between democratic rights and CCP control? They did find one through socialism and capitalism, right?

Us Indians will do best to keep away from the head-filling cr@p dished out by the Western media. We dont need to worry if China will combust internally or if its population will age. If we can put out our internal fires and bring more and more people out of poverty, we would do well.

 

[Chinese-Dragon]

And thanks to its One Child policy to control its population, China is going to age very fast indeed over the next few years, unlike India.

The one-child policy is something that can EASILY be modified, or even scrapped if it needs to be.

Demographic change happens over decades.

If the Chinese government thinks that it poses a significant problem, they could go out tomorrow and modify the policy to allow more exceptions, or even just over rule it completely.

 

[aimarraul]

the race between a modest hare and a bollywood tortoise.....It will be interesting to see how is the story gonna end

To be fair, the West (and a lot of us Indians) over-exaggerate the advantages of Indian democracy. They did find one through socialism and capitalism, right?

Us Indians will do best to keep away from the head-filling cr@p dished out by the Western media. We dont need to worry if China will combust internally or if its population will age. If we can put out our internal fires and bring more and more people out of poverty, we would do well.

 

[cybernaut]

I feel the article is a right mix of optimism and pragmatism. The article is not to feel good about us in anyway.
Most Indians would love to have some kind of centralized control like CCP and democracy at grass roots/state level .
What we should really keep out is unnecessary arms race and conflicts with both our neighbors

 

[GUNS-N- ROSES]

As long as Asia eventually throws off the shackles of Western hegemony, I will be happy with the outcome.

Asia was historically the great power center of the world. The only reason the West managed to dominate, was through the Industrial Revolution and Colonization, with which they stole 200 years of history.

But now the world is reverting back to the original order. And no one can stop the re-emergence of Asia.

well said bro. asia will be centre of power in years to come.

 

[dabong1]

As long as Asia eventually throws off the shackles of Western hegemony, I will be happy with the outcome.

Asia was historically the great power center of the world. The only reason the West managed to dominate, was through the Industrial Revolution and Colonization, with which they stole 200 years of history.

But now the world is reverting back to the original order. And no one can stop the re-emergence of Asia.

I agree that things are going back to there natural order with the chinese being the dominant economy in the world which it has kept for the 1800 years and only in the last two centuries has the west been bigger.

 

[Nalwa]

I agree that things are going back to there natural order with the chinese being the dominant economy in the world which it has kept for the 1800 years and only in the last two centuries has the west been bigger.

Not to go off on a tangent, but there's a very widely read article that says the same about India. About undivided India contributing close to 25% of the world's GDP uptill the 18th century. Anyways, it could have been China as well. As long as it was an Asian nation, it doesn't matter.

 

[cybernaut]

Tortoise and hare will able to compete as long as we give that cost advantage. But how long can we be the back office and manufacturing centers of the world instead of being the center of learning and center of excellence in innovation
In India-Regional politics is hampering the growth in a big way , the underground economy and corruptions are the single biggest evil for India right now. Is there a way to account the underground economy , tax it and let the country benefit from it. Also below poverty line estimation in india is skewed because of the unaccountability of underground economy

 

[conworldus]

Funny thing is that when China was at India's current development stage, we had attention from NO ONE...

 

[Jade]

Chinese advantages

1.Balanced industry across all sectors
2.Public investment
3.Better manufacturing base
4.Effective state machinery
5.Better human development indicators
6.Better land reforms
7.Disciplined workforce
8.Superior infrastructure

India’s advantages

1.Private sector
2.Financial intermediaries
3.Young demographics
4.Entrepreneurship and Innovation
5.Better service sector
6.English as a medium of education

If India has to overtake China then it has bank and take advantage of its Private sector and Young demographics, otherwise China will keep it's position

 

[ChinaRocks]

Useless India always aiming so low ,it is poitnless to compare yourself with China, World fastest growing economy super power india should be compared with USA.