India Next Door, China Over the Horizon: The View from South Asia

[Anonymous user]

The rand report and the graph clearly doesn’t dispute the fact that India has huge advantage over China because of democratic dividend, it in fact supports it. If you observe the graph, China is enjoying the lowest dependency ratio now (2010). No wonder the gap between India and Chinese growth rate is higher. From now on India is clearly closing the gap with China’s dependency ratio increasing while India’s decreasing

The reason why India’s growth will surpass China’s much before 2030 because a younger one is better educated, his/her output will be higher, and he/she will be able to learn faster new things than a older one.

China will fizzle out before it can peak

You do realize in order to achieve this you will require a lot of assistance from China, thats of course unless you expected the manufacturing expertise and the trillions of dollars in infrastructure to support this daydream to appear overnight.

Can anyone tell me what the estimated oil price will be in 2020?

 

[muse]

I think everybody joins to wish India success in becoming a economic power -- this fascination with being as good as the Chinese is embarrassing - India, I am sure, has reasons other than just showing the Chinese - or at least it ought to have better reasons.

 

[Jade]

China only needs 10 years for our growth to become solid like a rock. In general once a country passes the 10,000 USD/capita threshhold it never goes back down.

I did not suggest in any of my post that China would not be able to reach GDP per capita of $10000. In fact China’s per capita GDP will be near $50000 by 2050, whereas India’s would only be near $22000; however by 2050, China total GDP (nominal) will be 2x times that of India’s from the current ratio of 4x, a huge improvement and by GDP (PPP), India and China will have same GDP figures, in fact slightly higher than China’s

 

[Jade]

You do realize in order to achieve this you will require a lot of assistance from China, thats of course unless you expected the manufacturing expertise and the trillions of dollars in infrastructure to support this daydream to appear overnight.

Can anyone tell me what the estimated oil price will be in 2020?

Yes China wants to invest a lot in India. China wants to enter Indian infrastructure markets and its logical given the Chinese expertise in infrastructure development; however, it is Indian government that is reluctant to allow Chinese companies given the distrust between the two countries. Treatments meted out to Huawei, ZTE and other port building Chinese companies in India are examples.

China also sees India as a huge market for its products and most consumer Chinese goods companies have either setup shops here or have big plans to be India in immediate time. Also Indian companies are importing Chinese workers in large numbers for building steel plants, bridges and other mega infrastructure projects in India. Chinese community is ever growing in India and so is its FDI

There is nothing day dreaming about this. Infrastructure developments, FDI, Tech transfer are all functions of economy’s growth rates, markets and government policies. In first two parameters there are few countries that can match India, while government policies are slowly becoming more open towards the FDI

 

[Jade]

I think everybody joins to wish India success in becoming a economic power -- this fascination with being as good as the Chinese is embarrassing - India, I am sure, has reasons other than just showing the Chinese - or at least it ought to have better reasons.

Yes, India is fascinated by China; however it doesn’t mean India wants to be China and given the different political structure of both countries; it would be very hard for India to emulate Chinese way of development.

There are lot of differences between Chinese and Indian models. In China, development is predominantly done by the government, while in India, it is done by the private sector, government being just a facilitator. Chinese economy is planned while India is market driven. FDI policies in China are very friendly while FDI policies in India are regressive. Capital markets in China are controlled by the government, while in India real markets control the capital markets. Exports constitute a large portion of Chinese economy while in India the economy is function of domestic demand. China is systematic while India chaotic. The models are as different as South Pole to North Pole; however, competition is always healthy.

 

[below_freezing]

Yes, India is fascinated by China; however it doesn’t mean India wants to be China and given the different political structure of both countries; it would be very hard for India to emulate Chinese way of development.

There are lot of differences between Chinese and Indian models. In China, development is predominantly done by the government, while in India, it is done by the private sector, government being just a facilitator. Chinese economy is planned while India is market driven. FDI policies in China are very friendly while FDI policies in India are regressive. Capital markets in China are controlled by the government, while in India real markets control the capital markets. Exports constitute a large portion of Chinese economy while in India the economy is function of domestic demand. China is systematic while India chaotic. The models are as different as South Pole to North Pole; however, competition is always healthy.

That's what it looks like on paper.

In reality, China is pretty chaotic too. There's protests and riots every day. Corruption everywhere. The news is 1/3 worthless propaganda and 2/3 scandals that make your blood boil. Government gets deadlocked over even a new interpretation of the marriage law passed in 1950's. State owned companies contribute 40% of GDP but make up only 10% of employment; private sector is rest.

Exports make up 1/4 of GDP in China and 1/6 of GDP in India, not too far off.

The reason China is successful, and India is not as successful, has strongly to do with 2 factors:

1. The socialist practice that land cannot be privately transferred. This prevents farmers from using their land as collateral for loans, which if the farmer fails to pay off, they could be left landless as a permanent rural underclass and contribute to slum formation and armed rebels.

2. Educating a large number of people up to the middle school level, rather than creating a highly educated international business class, coupled with masses of illiterates.

China's success can be attributed to 2 ideas: equality of opportunity, and reduction of risk.

 

[lem34]

Teresita C. Schaffer, Nonresident Senior Fellow, Foreign Policy, 21st Century Defense Initiative

The National Bureau of Asian Research

Main Argument:

For Pakistan, the rise of India is a strategic nightmare, while the rise of China is an opportunity to curb India’s advancement and reduce dependence on the United States. Afghanistan sees its ties with India and China, as well as with the U.S., as vehicles for blunting interference by its immediate neighbors, especially Pakistan. Bangladesh, Nepal, and Sri Lanka generally accept India’s primacy in their region. Bangladesh and Nepal see their ties with China as a way of increasing their freedom of action against India; Sri Lanka sees both India and China as means to emphasize its independence from Western donors.

Policy Implications:

* India’s South Asian neighbors look on India and China with one eye on relations with the U.S. Most of these countries are seeking either to balance a hostile relationship or to hedge against excessive dependency on the U.S. or India.

* India is still the major player in South Asia, and is becoming more active in East Asia.

* China’s security profile and economic heft in South Asia have risen dramatically in the past decade. India’s economic growth will determine whether New Delhi maintains its influence in its own neighborhood.

* The Indian Ocean is the arena where the India-China rivalry will play out. U.S. strategic goals align well with India’s, and U.S. interests would be well served by treating the Indian Ocean as a single policy space.

* The smaller South Asian countries, especially Sri Lanka, will play a greater role in the dynamics of the Indian Ocean region than traditional U.S. policy would indicate.

India Next Door, China Over the Horizon: The View from South Asia - Brookings Institution

Incredible is India. Thats all the west want to see to hide the achievements of china. In fact Asias name should be changed be changed to incredible india. this should be seen as what it is american and western propaganda.

 

[DarK-LorD]

Indian economy to grow 8.1 percent in 2011: UNCTAD
Indian economy to grow 8.1 percent in 2011: UNCTAD | Current Affairs & General Knowledge
UBS cuts China growth outlook to 9% amid global slowdown.
UBS cuts China growth outlook amid global slowdown

 

[Norboo]

Too bad then, that your economic growth is slowing down to 7%.

Just wait for a couple of years to see the Chinese bubble burst. Then we'll talk!

Cheers!

 

[Norboo]

In fact Asias name should be changed to incredible india.

Why not to Incredible Pakistan? You guys have dug your own graves. From a mind boggling 8% growth rate in the late nineties to a paltry +- 2% (and plummeting further). You have come a long way, baby! But in the opposite direction! Get your house in order fast. But this is easier said than done considering the policies of your Establishment and a lame duck government to boot!

 

[DelhiDareDevil]

And for Pakistan, the only way it can change viewing India's economic and military rise, is to focus on it's own economic rise - this and not any confession based policy, is key to ensuring that the Pakistan state can honor the legacy and rationale of it's founding and existence, even as it affords lives of dignity to her population, and can satisfy the populations ASPIRATIONS and EXPECTATIONS.

Failure to liberalize the economy and getting the state out of the business of being in business, as the state protects private and public property and investment, will be instrumental in ensuring that the present form of government in Pakistan will continue to be seen as model deserving preservation.

Agree, India is trying to compete with China by achieving high economic growth.

And Pakistan is trying to compete with India, by buying similar weapons then India buys, which is hurting Pakistan economy.

---------- Post added at 01:42 PM ---------- Previous post was at 01:40 PM ----------

Incredible is India. Thats all the west want to see to hide the achievements of china. In fact Asias name should be changed be changed to incredible india. this should be seen as what it is american and western propaganda.

For once I agree with you mate.

 

[muse]

Yes, India is fascinated by China; however it doesn’t mean India wants to be China and given the different political structure of both countries; it would be very hard for India to emulate Chinese way of development.

There are lot of differences between Chinese and Indian models. In China, development is predominantly done by the government, while in India, it is done by the private sector, government being just a facilitator. Chinese economy is planned while India is market driven. FDI policies in China are very friendly while FDI policies in India are regressive. Capital markets in China are controlled by the government, while in India real markets control the capital markets. Exports constitute a large portion of Chinese economy while in India the economy is function of domestic demand. China is systematic while India chaotic. The models are as different as South Pole to North Pole; however, competition is always healthy.

Thank you for the excellent post, however, I don't think readers understand the source of the "fascination" -- what is it given all the differences you point to, that should still be fascinating to Indians about China???

And if you should answer that it is the growth, then all those differences you point you, mean, exactly what??

 

[kawaraj]

There are lot of differences between Chinese and Indian models. In China, development is predominantly done by the government, while in India, it is done by the private sector, government being just a facilitator. Chinese economy is planned while India is market driven. FDI policies in China are very friendly while FDI policies in India are regressive. Capital markets in China are controlled by the government, while in India real markets control the capital markets. Exports constitute a large portion of Chinese economy while in India the economy is function of domestic demand. China is systematic while India chaotic. The models are as different as South Pole to North Pole; however, competition is always healthy.
Original Post By Jade

I am wondering why I heard GDP made from state owned business in India is even higher than that in China, talking in Percentage.

 

[Vibs]

I am wondering why I heard GDP made from state owned business in India is even higher than that in China, talking in Percentage.

That's not possible. Even the so called "private companies" in China are owned by the state or state players. Figures indicating private sector in China is an eyewash. But it'll be interesting to know what the percentages are. Do you have any figures?

 

[Vibs]

That's what it looks like on paper.

In reality, China is pretty chaotic too. There's protests and riots every day. Corruption everywhere. The news is 1/3 worthless propaganda and 2/3 scandals that make your blood boil. Government gets deadlocked over even a new interpretation of the marriage law passed in 1950's. State owned companies contribute 40% of GDP but make up only 10% of employment; private sector is rest.

Exports make up 1/4 of GDP in China and 1/6 of GDP in India, not too far off.

The reason China is successful, and India is not as successful, has strongly to do with 2 factors:

1. The socialist practice that land cannot be privately transferred. This prevents farmers from using their land as collateral for loans, which if the farmer fails to pay off, they could be left landless as a permanent rural underclass and contribute to slum formation and armed rebels.

2. Educating a large number of people up to the middle school level, rather than creating a highly educated international business class, coupled with masses of illiterates.

China's success can be attributed to 2 ideas: equality of opportunity, and reduction of risk.

A rare candid post. Makes for a good read as far as point of view is concerned. But to be honest China's success was brought about by the huge influx of foreign investment following the second set of reforms and pushed further by it's willingness to be the world's manufacturing hub. The factors you mentioned managed to facilitate all this.
India's growth was primarily driven by services and started loong after the reforms actually took place (to be honest they are still taking place). It is fairly recently that Indian manufacturing has started to find it's own identity in global markets. They will be the drivers of future growth for India. But really I don't see any reason for major disputes between China and India regarding economic growth. Ever since the Doha round of discussions, both countries have been a thorn in the side of developed nations.
Measures of influence is just the western world's myopic view of the world owing it's origin to the Cold war days. The scenario today is honestly something no one can clearly describe.