The following written by a famous Russian new presenter and blogger Anatoly Karlin.
(Sublime Oblivion)
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It is not a secret to longtime readers of this blog that I rate Indias prospects far more pessimistically than I do Chinas. My main reason is I do not share the delusion that democracy is a panacea and that whatever advantage in this sphere India has is more than outweighed by Chinas lead in any number of other areas ranging from infrastructure and fiscal sustainability to child malnutrition and corruption. However, one of the biggest and certainly most critical gaps is in educational attainment, which is the most important component of human capital the key factor underlying all productivity increases and longterm economic growth. Chinas literacy rate is 96%, whereas Indian literacy is still far from universal at just 74%.
Many people claim that Chinas educational success is superficial, arguing that although it has achieved good literacy figures, standards especially in the poor rural areas that have been neglected by the state during the reform period are very low. This is not a minority view. The problem is that for proof they cite figures such as the average number of years of schooling or secondary enrollment ratios - which are still substantially inferior to those of developed nations and assume that they directly correlate to the human capital generated among Chinese youth. This is a flawed approach because it doesnt take into account the quality of schooling. Though not without its problems, by far the most objective method of assessing that is to look at international standardized tests in literacy, numeracy, and science. The most comprehensive such study is PISA, and it tells a radically different story.
The big problem, until recently, was that there was no internationalized student testing data for either China or India. (There was data for cities like Hong Kong and Shanghai, but it was not very useful because they are hardly representative of China). An alternative approach was to compare national IQs, in which China usually scored 100-105 and India scored in the low 80′s. But this method has methodological flaws because the IQ tests arent consistent across countries. (This, incidentally, also makes this approach a punching bag for PC enforcers who cant bear to entertain the possibility of differing IQs across national and ethnic groups).
In contrast, the PISA tests are standardized, and barring a few quibbles largely free of the consistency and sampling problems that tend to plague international IQ comparisons. And they confirm what the IQ data has long hinted at: At least among schoolchildren close to graduation, the Chinese are simply far, far smarter than their Indian counterparts (necessary caveat: As measured by these tests).
I already covered China, so I will simply quote in extenso from an older post. I emphasize the most important part in bold.
As regular blog readers know, I think that educational capital and more broadly average IQ levels are one of the key and frequently under-appreciated due to political correctness determinants of economic development and whether or not convergence to developed country levels is even possible. Its much higher educational capital is one of the key reasons why I think China will continue doing much better than India in development, regardless of its democratic deficit. However, many people argue that Chinas human capital must actually be quite low, because it doesnt spend much on education, resources are bare in the provinces, statistical fudging under unaccountable governors, etc.
The recent results from the international standardized PISA tests in math, reading and science will make this an increasingly untenable position.
Shanghai got by far the best results out of all the OECD countries (never mind the developing ones). Now while you might (rightly) argue Shanghai draws much of the elite of the Yangtze river delta, the Financial Times has more: Citing further, as-yet unpublished OECD research, Mr Schleicher said: We have actually done Pisa in 12 of the provinces in China. Even in some of the very poor areas you get performance close to the OECD average.
Since countries like the US and France get scores close to the OECD average, this means that the workforces soon to be entering Chinas economy, even from its poorest regions, will be no less skilled than those of leading Western economies (note too that the numbers of Chinese university graduates are soaring). And with Chinas massive population, four times bigger than Americas, its road to superpowerdom must be all but guaranteed. [AK adds: I.e., because under market economies, development - as proxied by GDP per capita - tends to converge to a level commensurate with the human capital level of the country in question].
Also in December 2011, but unnoticed by myself until now, PISA released additional information on nine countries*. Critically, this included two Indian provinces, Tamil Nadu and Himachal Pradesh. How did they do relative to China?
On math proficiency, Tamil Nadu scored 351 and Himachal Pradesh scored 338. On science, they scored 348 and 325, respectively. In both cases, they were at ROCK BOTTOM of the league table of the 74 sampled countries together with Kyrgyzstan. Literally no other country did worse.
In comparison, even the poorest Chinese regions performed close to the OECD average of about 500, putting them in the same rank as the bottom half of the industrialized countries such as Russia, Italy, or the United States (high 400′s); but well above other prominent developing states such as Brazil, Mexico, and Malaysia (high 300′s-low 400′s). The better off Chinese regions will have presumably done better, perhaps similar to Australia or Japan, while the most developed Chinese region, Shanghai, blew every other country out of the water with a mean score of 600 in math and 575 in science.
Note that Tamil Nadu is fairly developed by Indian standards, while Himachal Pradesh is about average. One simply shudders to imagine what the results would be in a poor state such as Bihar or Uttar Pradesh.
China and India are both truly exceptional in educational attainment for dynamically developing emerging markets, but only the former is exceptional in a good way[/U].
Many Indians like to see themselves as equal competitors to China, and are encouraged in their endeavour by gushing Western editorials and Tom Friedman drones who praise their few islands of programming prowess in reality, much of which is actually pretty low-level stuff and widespread knowledge of the English language (which makes India a good destination for call centers but not much else), while ignoring the various aspects of Indian life the caste system, malnutrition, stupendously bad schools that are holding them back. The low quality of Indians human capital reveals the demographic dividend that India is supposed to enjoy in the coming decades as the wild fantasies of what Sailer rightly calls Davos Man craziness at its craziest. A large cohort of young people is worse than useless when most of them are functionally illiterate and innumerate; instead of fostering well-compensated jobs that drive productivity forwards, they will form reservoirs of poverty and potential instability.
Instead of buying into their own rhetoric of a India shining, Indians would be better served by focusing on the nitty gritty of bringing childhood malnutrition DOWN to Sub-Saharan African levels, achieving the life expectancy of late Maoist China, and moving up at least to the level of a Mexico or Moldova in numeracy and science skills. Because as long as Indias human capital remains at the bottom of the global league tables so will the prosperity of its citizens.
Why China Is Far Superior To India | Sublime Oblivion
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Ouch, this must hurt!!
Oh my, high IQ geniuses trying hard their best.... 
