Ever wondered who will win the economic competition between China and India? Here are the six short answers to your question - the reason why India will become the next Asian Tiger while the Chinese dragon be humiliated.
Population
India is experiencing a explosive population growth which is predicted to overtake China as the World's largest population within the next decade. Thus India has the human resources needed to propel its growth. Currently India has the world's youngest population - almost 1 out of every 10 people in India is below the age of 25. Thus the country has a ton of fresh minds entering the various industry, business, and education sectors. China however is facing a population crisis. The One-Child policy has left many parents to abandon their female children or not desire a female child. Thus more males are born to Chinese families to help with the family income. So China is facing an unequal sex ratio (males: females) in which there are less females for every male in the population. By 2015, China's population will peak at 1 billion and then decrease steadily while Chinese government struggles with providing care to its aging millions.
Economy
China's current economic growth is due to resource accumulation from trades while India's growth is increasingly based on a more efficient economic sector. In the long run, a more efficient economy will always overtake and surpass a large cumbersome inefficient economy. This is seen today as China buys debts from foreign powers while trying to market their goods and resources to a global market - while India is focusing on specializing their economy and providing better quality services such as the IT sector. Thus unlike China, outsourcing to India has grown rapidly and by 2010, it is expected to be 56 billion dollars a year. Currently every major company has begun to invest heavily in India and has started to rely on Indian engineers for their next-generation products. Google lead scientist, Krishna Bharat is working on the new core search engine technology in Indian tech capital of Bangalore while companies like GM, Boeing, Motorola, Cisco, HP and many others have begun to make their R&D facilities and Asian headquarters in India. Bangalore, in many ways, has become to Silicon Valley in 1999, with much development and growth headed its way. However, China still manages to hold the 9.5% growth lead thanks to its mass production capabilities - which has begun to see problems due to their bad quality as been by the lead in Kingfisher toys or the poisons in Chinese imported fish.
Industry
China is a leading producer of marketable good and a major mass producer of such goods. Thus to maintain their lead, China is working on industrial plants geared towards their production sector. Meanwhile, India is a rising power in the software, design, services and precision industry. There is no other IT sector in the world that can compare to or even hold its own against India. So what is the key difference maker between India and China? Well China is what we call a light industry producer while India is the heavy Industry producer. While China makes the toys and the T-shirts that we see as common goods on the market, India is making industrial grade steel used in making skyscrapers, tanks and ships while its automotive industry is experiencing unprecedented growth. Thus in the short run, China will experience a growth that's mainly due to its ability to sell common goods, it is going to have trouble with heavy industry. A good example of this would be the Chinese attempt to kick start their automotive industry - which continues to be a failure and fails to reach a global audience. Meanwhile Indian companies such as TATA is making headlines by making more cheaper and efficient cars and making deals with western companies like GM and many others. More recent was the takeover of Jaguar and Land Rover by Indian TATA motors - an indicator of India's heavy growth industry seeking to expand its influence worldwide.
Education System
Every year both India and China produce over 500 thousand engineers who graduate with high degrees - compared to the 60 thousand who graduate in the US. Out of the 500 thousand, a better part of them are Indian graduates. India has the 2nd largest English speaking population out of the English nations and 2nd largest nation with the most English speakers per GDP. India's education system has proven to be far more advanced than its Chinese counterpart. Indian Institutes of Technology (IIT) is a world prestigious institution that even rivals western universities at the quality of education it provides - churning out the engineers and IT professionals of tomorrow. Currently, India is the 2nd largest producer of Engineers, scientist and doctors. Other educational intuitions like the Indian Institute of Science (IIsc) and the Business school have all set standards as the world benchmark. Meanwhile in China, low English speaking populations with high illiteracy rates have been a turnoff for many companies and opportunity seekers. India's education have steadily been increasing while corruption, and lack of uncontrolled and wasteful spending has not been beneficial to the education sector.
Environmental Consequences
As with any developing country, India and China both are heavy producers of pollution which continues to contribute to the global warning. Massive and forcible seizures of land, the destruction of usable housing structures, reduction of arable land, and environmental degradation in China has all contributed to a environmental policies for the near future. In an effort to promote the image of growth and modernization, China has done little to research their environmental impact on the planet and thus is harboring an oncoming crisis within the next few decades. India has however been slow to respond like China to the growth, thus making sure safety procedures are more accurately followed. Even today, Chinese companies do not install filters onto their smoke stacks or care for where they dump their industrial garbage while in India, environmental groups (using their freedom of speech & rights) have begun to advocate for better environmental care.
Growth Investment
China's economy began its growth spree almost 13 years (1979) before India even emerged on the global economic market. Even when China did emerge, it began to rely on foreign investments too much. Today, China is dependent on foreign investments. The Chinese stock market has already crashed and is still reeling to recover. Almost 70% of the country's banks have declared bankruptcy and is now riding on foreign investments. Like communist Russia, China is mobilizing its resources trying to issue a mirage of growth by buying US debts, modernizing its army seizing civilian lands for huge building projects - but at what price? In the long run, none of this will stimulate the decaying and crumbling Chinese financial/capital market. There are no private run enterprises in China - for the fear of individualization and loss of government control of the country. So while China is relying on foreign investments and trade, India has been developing a wave of homegrown, innovative private companies, especially in high tech & information sector. For example, even when facing severe international sanctions and trade limitations, Indian civilian and military nuclear program has been effectively successfully, springing forth a homegrown nuclear technology capable of processing Thorium - unlike all the other nuclear technology that uses uranium.
Just like that, Indian companies have grown on their own, and are now emerging on the world markets. TATA Group, Reliance Corp, Mittal Steel and many others have begun to takeover European and American companies - expanding their global reach. India's stock markets have grown exceedingly large; the Bombay stock market has broken numerous domestic and international records. Indian companies are earning more due to the 20% returns on the investment opportunities in India - thus the reason for Japan's recent 5 billion dollar investment in the “industrial corridor” of India. Overall, India is growing at a rate that ensures quality while experiencing record breaking growth - something China has failed to do.
You need to get your facts right. But the core message is true.
#2 by Abrar Jul 17, 2008
Well between India and China, India will clearly win in the long run. India has plenty of resources, money and allies to succeed.
#3 by Victoria Jul 17, 2008
Both countries still have many issues to deal with and i believe that after the Olympic games China will focus heavily on resolving some of these issues...already many whispers are being heard about new policies that will be put in place to improve China...and i think you will see BIG changes in China very soon...remember that both of these countries are doing well...in part due to cheaper labour...when this changes so do prices...India is not nearly as developed as China currently is...so to predict this idea of India being a super power over China is premature...and i think people underestimate Chinese determination.
China is heading a a good direction and India can learn a lot from them
#4 by BBC Jul 18, 2008
India has become a world economic power, with growth over the past three years averaging 8% - a rate approaching that of its booming neighbour, China. Based on purchasing power parity, it is now the world's fourth largest economy.
World's largest economies based on PPP
Since India began to open up to the outside world in the late 1980s, it has become increasingly attractive to foreign investors. Its low costs and huge, English-speaking, workforce have made it popular with multinationals for work including manufacturing and call centres.
The success of hi-tech industries in particular has seen large numbers of overseas Indians return, in what has been described as a "brain gain". They are part of growing middle class, which is seen as a potentially vast domestic market.
#5 by Ahmed Jul 18, 2008
How do you summarise a country which is home to one in six members of the human race, which contains a third of the world's poorest people and yet has an increasingly consumer-oriented middle-class twice the size of the population of Germany?
And which - according to predictions by the CIA and investment bankers Goldman Sachs - could, along with China, come to dominate the global economy in the next few decades?
India has always been hard to get a handle on. In the 28 years that I've been visiting, thinking and writing about this vast and varied subcontinent, I've clung on to an unnerving, and yet somehow also reassuring, truism: for any generalisation that can be made about India, the opposite is equally true.
So is it or is it not true that, 60 years after partition and independence, India is finally about to take its place on the world stage as a major player?
#6 by John Jul 18, 2008
India has always been on the world stage. The colonization of India by the white Europeans (barbaric savages) reduced its former glory to a 3rd world nation.
Americans (Lester and Victoria, this is for you) would do well to remember that; Recall what the colonization of America by Europeans did to the Native Americans, a group of people that were hundreds of years ahead of the the Europeans on social issues and the status of woman in their societies.
Anyway, back to India; this is what Albert Einstein said about India:
"We owe a lot to the Indians, who taught us how to count, without which no worthwhile scientific discovery could have been made!"
Albert Einstein
What he is referring to is that both; the number system (0 - 9) that we use today and the decimal system originated in India. So for you Americans; the numbers you print of your dollar bills (that hold even less value today) is because of India !!!
#7 by Elise Jul 22, 2008
India does indeed face some tough problems if it wants to sustain the 9% growth rate Planning Commissioner Ahulwalia says can happen. Lack of infrastructure tops the list of concerns it has to overcome.
#8 by Miller Jul 22, 2008
Another driving factor in India’s five-year growth plan is the country’s rising middle class. The middle class currently numbers some 50 million people, but by 2025, that number will expand dramatically to 583 million people -- some 41% of the population.
India’ s middle class includes young college graduates to mid-level government officials, traders and business people. They enjoy a lifestyle that most of the world would recognize as middle class. They typically own a television, a refrigerator, a mobile phone and perhaps even a scooter or a car.
The upper end of the middle-class segment includes senior government officials, managers of large businesses, professionals and rich farmers. Successful and upwardly mobile, they are brand-conscious, buying the latest foreign-made cars and electronic gadgets. They are likely to indulge in an annual vacation, usually somewhere in India.
Both segments of the middle class are demanding more from the government, including better education and healthcare.
And the country is responding.
#9 by Fareed Jul 22, 2008
A much-cited 2003 study by Goldman Sachs projects that over the next 50 years, India will be the fastest-growing of the world's major economies (largely because its work force will not age as fast as the others). The report calculates that in 10 years India's economy will be larger than Italy's and in 15 years will have overtaken Britain's. By 2040 it will boast the world's third largest economy. By 2050 it will be five times the size of Japan's and its per capita income will have risen to 35 times its current level. Predictions like these are a treacherous business, though it's worth noting that India's current growth rate is actually higher than the study assumed.
#10 by Indian PM is a Hero! Jul 22, 2008
The wave of Hindu nationalism that raged through the country in the 1990s is on the wane, for now, and a thoroughly secular government is in power. Headed by Manmohan Singh, the former Finance minister who opened up India's economy in the summer of 1991, it is also committed to economic reform. In an act of great wisdom and restraint, Sonia Gandhi, who led the ruling coalition to victory in the polls, chose to appoint Singh as prime minister rather than take the job herself. As a result, quite unexpectedly, India's chaotic and often-corrupt democratic system has yielded as its head of government a man of immense intelligence, unimpeachable integrity and deep experience. Singh, an Oxford Ph.D., has already run the country's central bank, planning ministry and Finance Ministry. His breadth, depth and decency are unmatched by any Indian prime minister since Nehru.
#11 by Dara Jul 30, 2008
China just spend 45 Billion Dollars on the Olympic preparation for the games. That is crazy amount when considering that Greece only spend 16 billion in 2004. So somebody has to pay for that 45 billion and the people are going to suffer with the taxes for the next couple of years.
This is why having a democracy makes a nation stronger. It will lead to alot of debate and even discussion for whether or not spending 45 billion on Olympics is worth it.
#12 by Singh Aug 13, 2008
India changes every time i visit. it has come a long way, but it has a long way to go as well.
Im positive though, that even within the next 20 years, India will be a recognized, respected and 'official' world superpower that no one can deny.
The coming future is for Asia, and once again we see prosperity shine on the East, once again will history be kind to this part of the world.
May both India and China prosper like they did in the past.
