India, China growth race 'silly', says Nobel winner

[Chinese-Dragon]

If I had a nickel for everytime I've heard the "India is just like China only reformed 10-15 years later" argument... Well I'd have a lot of nickels

And the sad thing for them, is that China and India had a similar GDP in 1990. So we essentially started from the same place, considering that China's economic reforms were originally limited to special economic zones, and not the whole country.

The difference of course, being that China was able to sustain double-digit growth rates for decades, while India was unable to.

Once you get rid of the myth of "China having a ten year head-start", you can see the the gap is actually increasing every year.

 

[harshad]

And the sad thing for them, is that China and India had a similar GDP in 1990. So we essentially started from the same place, considering that China's economic reforms were originally limited to special economic zones, and not the whole country.

The difference of course, being that China was able to sustain double-digit growth rates for decades, while India was unable to.

Once you get rid of the myth of "China having a ten year head-start", you can see the the gap is actually increasing every year.

economic reforms in china started in the late 1970 and early 1980,reforms in india started after 1991 so its pretty much no comparison
also the timing of the economic boom is important,india cannot grow the same as china with recession at hand

 

[Chinese-Dragon]

economic reforms in china started in the late 1970 and early 1980,reforms in india started after 1991 so its pretty much no comparison
also the timing of the economic boom is important,india cannot grow the same as china with recession at hand

In 1990:

China GDP - 390,278
India GDP - 325,928

What people forget, is that the early reforms in China were limited to special economic zones, and in fact the national economy shrunk for many periods after that. It only went nation-wide much later.

So like I said, once you get over the myth of "China having a 10-year head start"... you'll see that the real problem lies in India's inability to sustain double-digit growth rates. That is why things turned out so differently.

 

[jdme]

And the sad thing for them, is that China and India had a similar GDP in 1990. So we essentially started from the same place, considering that China's economic reforms were originally limited to special economic zones, and not the whole country.

The difference of course, being that China was able to sustain double-digit growth rates for decades, while India was unable to.

Once you get rid of the myth of "China having a ten year head-start", you can see the the gap is actually increasing every year.

Even worse that China already had 12 years of reform in 1990 and India was bankrupt in 1990..

India will never have double digit growth for single reason..Government doesn't use public money to construct buildings in India.

 

[below_freezing]

In 1990:

China GDP - 390,278
India GDP - 325,928

What people forget, is that the early reforms in China were limited to special economic zones, and in fact the national economy shrunk for many periods after that. It only went nation-wide much later.

So like I said, once you get over the myth of "China having a 10-year head start"... you'll see that the real problem lies in India's inability to sustain double-digit growth rates. That is why things turned out so differently.

Also, India's gold isn't in New York. We actually had the triple handicap of sanctions, gold reserves being shipped by Deng to his American daddy, and economy shrinking due to Deng's suicidal inflation policies. Yet still recovered.

Even worse that China already had 12 years of reform in 1990 and India was bankrupt in 1990..

India will never have double digit growth for single reason..Government doesn't use public money to construct buildings in India.

Was half your gold in New York in 1991? If not then India was better off than China was.

 

[jdme]

In 1990:

China GDP - 390,278
India GDP - 325,928

What people forget, is that the early reforms in China were limited to special economic zones, and in fact the national economy shrunk for many periods after that. It only went nation-wide much later.

So like I said, once you get over the myth of "China having a 10-year head start"... you'll see that the real problem lies in India's inability to sustain double-digit growth rates. That is why things turned out so differently.

And ofcourse you presumed that India unleashed slew of reforms all over the country!

 

[Chinese-Dragon]

And ofcourse you presumed that India unleashed slew of reforms all over the country!

The point is, we started from the same place in 1990, which finishes off the whole "10-year headstart" BS that people love to tell themselves. Reforms are pointless if they don't lead to actual results.

If India had been able to sustain double-digit growth rate like China did, then today there might not have been such a big gap between the two economies.

 

[harshad]

The point is, we started from the same place in 1990, which finishes off the whole "10-year headstart" BS that people love to tell themselves. Reforms are pointless if they don't lead to actual results.

If India had been able to sustain double-digit growth rate like China did, then today there might not have been such a big gap between the two economies.

i dont know how hard is it to understand but it takes time to implement policies and get returns
its not like the the growth starts just by announcing we are going to implement new policies,it task time to lay foundation,proper strategy,etc
so when china started in 1980s that got time to set up policies and stratigies till 1990 so when you say india started reform in 1990 it means it started and required more time for setting up policies

 

[jdme]

The point is, we started from the same place in 1990, which finishes off the whole "10-year headstart" BS that people love to tell themselves. Reforms are pointless if they don't lead to actual results.

If India had been able to sustain double-digit growth rate like China did, then today there might not have been such a big gap between the two economies.

Nonsense. In 1990, you were surging ahead with slew of reforms and 12 years of growth in various regions of China. India had just put tons of gold in UK bank so that it can pay for gas. It struggled for next 10 years to create a framework for future growth. If anything, by 2000, Gap between India and China was already 20 years wide. It's illogical to compare the PCI in 1990 and conclude that both countries were starting were equal footing in 1990. There are bunch of developing countries with higher PCI than China and yet China will outgrow them. It's the momentum that matters, not one year of PCI.

 

[jdme]

i dont know how hard is it to understand but it takes time to implement policies and get returns
its not like the the growth starts just by announcing we are going to implement new policies,it task time to lay foundation,proper strategy,etc
so when china started in 1980s that got time to set up policies and stratigies till 1990 so when you say india started reform in 1990 it means it started and required more time for setting up policies

Very hard if you are Chinese. China had a framework in 1990, India doesn't have in 2011! And that is precisely why India growth is remarkable in some sense unless it is all on books. Unlike China, India government actually hinders growth. India has not bothered to reform one law, including labor. Bureaucracy is as bad as it was in 1995. Government moves one step forward and takes 2 step backward..

 

[Chinese-Dragon]

Nonsense. In 1990, you were surging ahead with slew of reforms and 12 years of growth in various regions of China. India had just put tons of gold in UK bank so that it can pay for gas. It struggled for next 10 years to create a framework for future growth. If anything, by 2000, Gap between India and China was already 20 years wide. It's illogical to compare the PCI in 1990 and conclude that both countries were starting were equal footing in 1990. There are bunch of developing countries with higher PCI than China and yet China will outgrow them. It's the momentum that matters, not one year of PCI.

It was not PCI, it was total GDP.

It's the momentum that matters? Yes, that is the entire reason that India was unable to catch up with China. Growth rates.

And India's growth rates are currently slowing down to around 7%.

 

[jdme]

It was not PCI, it was total GDP.

It's the momentum that matters? Yes, that is the entire reason that India was unable to catch up with China. Growth rates.

And India's growth rates are currently slowing down to around 7%.

For once, someone give me an argument worth having. I am sure you will feel better having this discussion with "like-minded" people. You sound like a broken record.

 

[below_freezing]

Nonsense. In 1990, you were surging ahead with slew of reforms and 12 years of growth in various regions of China. India had just put tons of gold in UK bank so that it can pay for gas. It struggled for next 10 years to create a framework for future growth. If anything, by 2000, Gap between India and China was already 20 years wide. It's illogical to compare the PCI in 1990 and conclude that both countries were starting were equal footing in 1990. There are bunch of developing countries with higher PCI than China and yet China will outgrow them. It's the momentum that matters, not one year of PCI.

You had gold in the UK, but at least you got gas in return. We gave the US 600 tons of gold in exchange for its word. At the time that was our whole gold reserves. Right now, half our reserves are still in the banks of a country that publically declared that it is our enemy.

China and India both have 5 year plans. There was a framework in 1976 called the Four Modernizations, which was basically useless "big talk" about how we had to modernize in 4 aspects:

agriculture
military defense
industrial production
political system

which is obvious for developing countries. Otherwise, we just have the standard 5 year plans, same as India.

 

[jdme]

You had gold in the UK, but at least you got gas in return. We gave the US 600 tons of gold in exchange for its word. At the time that was our whole gold reserves. Right now, half our reserves are still in the banks of a country that publically declared that it is our enemy.

China and India both have 5 year plans. There was a framework in 1976 called the Four Modernizations, which was basically useless "big talk" about how we had to modernize in 4 aspects:

agriculture
military defense
industrial production
political system

which is obvious for developing countries. Otherwise, we just have the standard 5 year plans, same as India.

You gave gold for goodwill. For all the hyperbole from US, US companies accepted China fully and in the process, pushed 30% blue collar Americans in poverty over 30 year period. Indian Rupee only saw free fall in 1990 and inflation was unbelievable. Overnight rupee lost 50% of its value. It's not the gold that affected India, it's what led to India being forced to pay in Gold. Indian reform was not a conscious choice for economic growth but an act of desperation because no one has unlimited gold. India is still acting in desperation. It only passes a reform when economic slows down. Always in reaction...

China has 3 times the landmass of India but less agricultural land than India. Indian lands are very fertile and get lot of water (like 15-20 rivers), yet Indian per acre output is much lower. Government never bothered to bring reform to agriculture even though India has potential to feed a continent...Indian 5 year plans are joke. 50% success is dream of policy planners.

 

[below_freezing]

You gave gold for goodwill. For all the hyperbole from US, US companies accepted China fully and in the process, pushed 30% blue collar Americans in poverty over 30 year period. Indian Rupee only saw free fall in 1990 and inflation was unbelievable. Overnight rupee lost 50% of its value. It's not the gold that affected India, it's what led to India being forced to pay in Gold. Indian reform was not a conscious choice for economic growth but an act of desperation because no one has unlimited gold. India is still acting in desperation. It only passes a reform when economic slows down. Always in reaction...

China has 3 times the landmass of India but less agricultural land than India. Indian lands are very fertile and get lot of water (like 15-20 rivers), yet Indian per acre output is much lower. Government never bothered to bring reform to agriculture even though India has potential to feed a continent...Indian 5 year plans are joke. 50% success is dream of policy planners.

How "freefall" is "freefall"? We had 25% inflation in the late 80's due to Deng's suicidal inflation policy... now you know why Tiananmen occured. Is that freefall enough?

Deng explicitly said that our method is also in reaction to events. He even called it "crossing the river by feeling stones". Everything is done in reaction; even the 5 year plans are just used to fix the mistakes of the previous 5 year plan.

So what made India slower than China?