Re: Development Race: China and India

On May 4, 11:10 pm, PaPaPeng <PaPaP...@[EMAIL PROTECTED]
> wrote:
> It will be nice if India can catch up with China.  We don't know the
> full consequences but it is probably good.  The 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.

This post, this article, is almost disingenuous knowing where
PaPaPeng's loyalties lie, but let's get some facts straight, if
RichAsianKid would take the bait (perhaps that's the real intent of
this post?) ever so masochistically (shut up!) and repost old old old
very old counter-evidence (never mind if PaPaPeng cunningly plays
hidden dragon or whatever):

    http://i14.tinypic.com/5yv4x1u.jpg

Notice how China is surging way ahead of India *even after* 1991 when
India supposedly opened its markets. That is a very im****tant point
and people often don't realize that. Yeah, the market matters, and
yeah oh sure too just ignore the role of human capital.  Sure sure
sure go argue with numbers. If you don't like them, they're fudged or
forged and they disappear. If the numbers are what I don't like they
go away. But again, I don't quite see narrowing or convergence of the
two giga-economies here in spite of all the conditions favoring India.

Now here's another data point:

    http://in.rediff.com/money/2005/sep/27china.htm

I quote:

"Even more remarkable, the increase in China's merchandise ex****ts in
each of the last three years was greater than total Indian ex****ts for
that year! At a more qualitative level, you have only to compare the
hundreds of cranes deployed in adding to the thousands of gleaming
skyscrapers in Shanghai with the handful dotting Mumbai's skyline.

"During the last five years while we have debated the new Bangalore
air****t, China has built quite a few new ones! Finally, how can we
hope to close the economic gap with China when almost every second
Indian child is malnourished?

"Let me put this bluntly: as an economy, we are simply not in China's
league."

And that's coming from the horse's mouth, from the Honorary Professor
at Icrier and former Chief Economic Adviser to the Government of
India.

Guess you can say that's some virtue of humility, perhaps, well,
socially conditioned. (I'm not trying to be mean)

So is there hope for the future? Well, here's what psychometrics tells
us.

    http://www.vdare.com/images/042306_ss_pic2.jpg

India falls flat. Again. Makes you wonder doesn't it? Makes you wonder
if that pathetic Indian 39% literacy rate is really a consequence or a
cause?

Bottom line let RichAsianKid summarize things up again: it's very easy
very easy to go on and on and on about India vs China. You can dig up
20 page PDFs from the internet and it's almost tedious to say that
China beats India again, again, again.

Nagging question remains: what drives India somehow seems always so
quaintly potential. What India can do. What India will achieve. How
India *will* somehow be.

And yet as for what makes China, it already is.