The meteoric rise of China and India has been one of the greatest geopolitical and economic stories of the last two decades. The ascent of these two giants has tipped the world’s balance of power farther to the east than it has been in centuries. Right now, China is decidedly the more influential of the two emerging powers. India, however, is no small player in the global arena and it possesses certain advantages that some believe could make it the most powerful nation in Asia.
India and China represent two vastly different ways of doing things. India has a decentralized and often chaotic manner of governing that at times threatens its rapid growth rate. The Chinese government is highly centralized with a commitment to unity and social stability that can border on obsession. India has largely friendly relations with the West, though these relations can become strained at times. China has a more steely relationship with Western nations, though a growing recognition of interdependence has made Beijing more open to cooperation. There is a growing debate about which of these approaches will prove more successful in the 21st century.
India vs. China: Economy
China is currently well ahead of India in the economic race. The People’s Republic boasts a Gross Domestic Product of $8.8 trillion (PPP, 2009 est.) compared to India’s $3.5 trillion. China also has a higher rate of real GDP growth compared to India; 8.7% vs 6.5%, respectively. China’s infrastructure is far superior to India’s as well. The Chinese government has sponsored what is perhaps the largest investment in infrastructure in human history.
Despite officially being a communist nation, China has done much to foster private business creation. It currently takes only about one month to start a business in China compared to three months in India. China’s agricultural sector is also far more advanced than India’s. Chinese agriculture is experiencing explosive growth while India’s still lacks widespread implementation of modern farming practices.
India, however, has several advantages which make its economy more stable and inviting to future investors; a fact which may make the nation the tortoise to China’s hare. India’s banking system has proven itself to be a model of stability during the post-housing bubble recession. Chinese banks, on the other hand, have created a potentially dangerous credit expansion that could cause a property bubble. India has a much lower debt-to-GDP ratio than China in addition to better household and corporate savings rates. India’s higher consumption rate will help the nation achieve more balanced growth in the long-term.
India vs. China: Government
India’s republican government may be the nation’s largest long-term advantage over China. Though India faces huge hurdles when it comes to corruption and inefficiency, the country still remains a fundamentally democratic and pluralistic society. China’s authoritarian bent may ultimately make it less stable and prosperous than its Indian rival. The Chinese government’s frequent violations of civil liberties allows for the possibility that if China’s economic growth rate slows, a Tiananmen-like event could topple the government. China’s willful ignorance of intellectual property rights also threatens long-term investment.
Can India Overtake China?
India has several economic advantages that could make it more prosperous than China in the long-term. India’s financial institutions are strong and its tradition of adherence to the rule of law will attract more economic activity in the future. However, before India can challenge China for supremacy it must make an enormous effort to address its dilapidated infrastructure and inefficient system of implementing policy.
China’s enormous lead over India will most likely mean that the People’s Republic will remain the premier power in Asia for years or decades to come. However, the Chinese government’s failure to address the fundamental problems that all authoritarian systems must ultimately confront means that India could come out on top in one or two generations.
References
"China." The CIA World Factbook. Central Intelligence Agency, 2010. Web.
"China Vs India: Who will win the race for eco supremacy?." News Center (2010): n. pag. Web. 14 Jun 2010.
"India." The CIA World Factbook. Central Intelligence Agency, 2010. Web.
Murphy, Cait. "Why India will overtake China." Fortune Magazine 2006. Web. 14 Jun 2010.
Schuman, Michael. "India vs. China: Whose Economy Is Better?."Time Magazine 2010. Web. 14 Jun 2010.
Matthew Holliday - I am a student of mathematics and computer science at Northern Michigan University. You can follow my writing on twitter here.
