- Registration time
- Last login
- Online time
- 209 Hour
- Reading permission
China should learn from India|
Whenever you compare China and India in economic terms, India always loses, China rules in almost every aspect and I have seen a couple of Chinese-endorsed commentaries saying India should learn from China, but is this fully true, that China’s economy is better that India?
In the short term, yes, China is the bomb with an exploding economy that is almost four times larger than India…but here is what we might not be considering.
China’s one-child policy means that there are more aging folks and in the long run, most will start dying off and become unproductive. The population will dip and Industries might relocate – India does not have to worry about a thang to this end.
For my next point I will quote The Economist:
“The country now boasts legions of thriving small businesses and a fair number of world-class ones whose English-speaking bosses network confidently with the global elite. They are less dependent on state patronage than Chinese firms, and often more innovative: they have pioneered the $2,000 car, the ultra-cheap heart operation and some novel ways to make management more responsive to customers. Ideas flow easily around India, since it lacks China's culture of secrecy and censorship. That, plus China's rampant piracy, is why knowledge-based industries such as software love India but shun the Middle Kingdom.”
To expand that, while in China, most wealth is owned by the state while in India it is driven by Indian business captains... The Second National Economic Census conducted in 2008 reveals that of all the 208 trillion RMB total assets of the secondary and tertiary sectors (industrial and service sectors), 63 trillion – or 30 percent of total – was held by the state.
And then most of the ‘industry’ that sets China as the world factory is not even Chinese - For example, even though China is the largest electronics exporter in the world, it only obtains 4% of the profit share because “over 90% of China’s high-technology exports are actually by foreign — not Chinese — firms.”
Compare with India whose domestic industry, owned by Indians supplies up to 40% of US drugs. Take some notes.
China is not a democracy, so when a government has a policy say to build a dam, nobody can protest, that is one thing that gives the Chinese economy an edge – swift policy implementation, but this is actually bad news for China. As it grows richer, democracy will have to come, people will demand more rights and social trouble will bubble – In India, where it already is a democracy, it has nothing to worry about and as such likely to have a brighter and more relaxed future.
Many Chinese say China is too big for a democracy, but India is equally populous and right next to China, a good start for anyone wanting to take notes.
English! The Indians speak English – they have their culture and all but embrace English as a language of business as such, as The Economist hinted, their negotiation powers are superior and desirable on a world stage – China should look at English and try not to hate on the language too much as it is the language of people with money and power.
The banking system in China needs to learn from the stable one in India which gets fewer incentives from central government.
UBS economist Wang Tao calculates, in a report quoted by Time, that if 20% of all new lending in 2009 and 10% of the amount in 2010 goes bad over the next three to five years, the total amount of NPLs from China's stimulus program would reach $400 billion, or roughly 8% of GDP.
Central planning is also an issue, in India a bad leader can only just affect the economy and can soon be voted out, if China has a bad leader, the effects would be far reaching.
India has issue with its neighbors but not threatens to boil over and if it can fix the Kashmir issue, India will have almost cleared its foreign policy migraine – China has Taiwan, Japan, Vietnam, Indonesia, The Philippines and from the inside Xinjiang and Tibet. China can learn from India a few things about how to rise without angering neighbours.
So yeah, some say India should learn from China but I am of the view that China should do its own note-taking from Modi and co.