Re: Development Race: China and India

On May 4, 8:10=A0pm, PaPaPeng <PaPaP...@[EMAIL PROTECTED]
> wrote:
> It will be nice if India can catch up with China. =A0We don't know the
> full consequences but it is probably good. =A0The key phrase is 'India
> is on the cusp of something big' which is the position Indian had been
> stuck at for the past 60 years.
>
> Tiger economies are snapping at US heelsBut it's not clear whether
> Beijing or New Delhi will catch up first
>
> Richard Wachman
> The Observer,
>
> China and India and are moving toward becoming the biggest economies
> in the world: with 2.4bn people, or 40 per cent of the world's
> population and annual GDP growth rates of between 8 per cent and 10
> per cent, experts say that they could one day overtake the US.
>
> Professor Pieter Bottelier, of the Centre for Strategic International
> Studies, says: 'If these two countries continue to grow at the current
> rate, they will overtake America, although that probably won't happen
> for a number of decades.'
>
> The countries are very different politically: India is the world's
> biggest democracy, but China is under tight communist government
> control. Economically, China has had a head start. Bill Emmott, former
> editor of the Economist, says in his book 'Rivals' that India's time
> has yet to come; to date it has been constrained by a poor
> infrastructure, social divisions, a caste system and mind-boggling
> poverty. But it is fast making up for lost time and no doubt Emmott
> wouldn't disagree with Steven Roach at US investment bank Morgan
> Stanley that 'India is on the cusp of something big'.
>
> Bottelier says the challenges the countries face are quite distinct.
> 'Generally, China has gone much further than India in trade
> liberalisation and in opening to foreign investment.' But he says
> things are starting to change.
>
> Bottelier adds: 'Issues facing India are much more broad-based, such
> as improvement in infrastructure and facilities, effective
> administration and labour reforms. Minus points for China include a
> lack of good quality software, a low pro****tion of Chinese who speak
> English and a less mature outsourcing industry.'
>
> India is hamstrung by bureaucracy: 'When the Chinese say they are
> going to do something, they get on with it and you can see the results
> much more quickly than in India where red tape is everywhere,' says
> one analyst. On the other hand, the huge increase in trade between the
> two nations has fuelled talk of the 'Chindia' effect.
>
> In 2006, trade between India and China reached $18.4bn. However, there
> is still mutual distrust. India remains suspicious of China's
> relation****p with arch-rival Pakistan, while China is concerned about
> New Delhi's growing ties with Wa****ngton, especially their nuclear
> agreement allowing India access to civilian nuclear technology.
>
> Observers expect the US to deepen its ties with India, which
> Wa****ngton views as a counterweight to China. America's relations with
> the Chinese are more strained as a result of tension over Tibet and
> Taiwan, not to mention the obvious ideological political divide. But
> that hasn't stopped US companies investing heavily in China, more so
> than British ones which have been quicker to spot op****tunities in
> India, perhaps because of their historic affinity.
>
> But these days investors tend to get more excited about India than
> China. True, a superficial look would argue in China's favour: its
> world class infrastructure, gleaming skyscrapers, huge supply of cheap
> labour and ability to direct resources anywhere they are needed.
> However, a re****t from Bloomberg says: 'For all the stories about
> China churning out millions of engineers and scientists, innovation
> isn't at the heart of the economy. Foreign investment and massive
> government spending, not ideas or start-ups, lie behind China's boom.'
> There is a dearth of internationally known Chinese companies that
> operate on a global scale and market their products abroad.
>
> In contrast, India has fostered globally known and competitive firms
> like Infosys and Reliant Industries, and has done a better job
> protecting intellectual property rights. China may get more headlines,
> yet the steady increase of Indian billionaires (Lakshmi Mittal, to
> name but one) is a reminder that India's markets are more developed.
> The demographics also favour India which has younger population.
>
> A re****t by Deutsche Bank cites surveys indicating that India has
> better cor****ate governance standards and its companies are more
> commercially driven. The bank adds: 'Although India started economic
> reforms a decade later than China, it is far more advanced in its
> institutional and financial infrastructure. This is reflected in
> contrasting outcomes: foreign direct investment is considerably lower
> than in China, but returns on investment are better on average.'
>
> A new measure of world economies, published by the International
> Monetary Fund, indicates that China and India are closing the gap on
> America. In a measure of purchasing power parity, adjusted to take
> account of exchange rates, the US is ranked at the top with $13
> trillion, China is a close second at nearly $10 trillion, while India
> is fourth with $4.2 trillion, behind Japan.
>
> The Indian academic Jagdish Sheth expects China to become the world's
> biggest economy by 2020, and India to overtake Japan to become the
> third biggest in just two years' time. That sets the stage for the
> next leg of the race between China and India in what promises to be
> one of the most dramatic developments of the 21st century.

By the year 2050, the top ranking powers will be;
USA
Russia
China
India
Brazil