How India's growth will outpace China's - The Economist

[sensenreason]

India is not as bad as what the Chinese think it is...at some point they will realise there folly..but I hope they ignore us for another 15 years..as India also needs the peaceful rise as China claims for the last decade or so

I dont buy the Economist articles ..becoz typically they dont publish analysis rather they publish intent of the west..ie PR...just like China hogged the limelight in the 80s and 90s as the next superpower...all over the western media..

 

[Chinese-Dragon]

India is not as bad as what the Chinese think it is...at some point they will realise there folly..but I hope they ignore us for another 15 years..as India also needs the peaceful rise as China claims for the last decade or so

I dont buy the Economist articles ..becoz typically they dont publish analysis rather they publish intent of the west..ie PR...just like China hogged the limelight in the 80s and 90s as the next superpower...all over the western media..

It's true that there is a lot of subjectivity in the Economist but it's important to understand what these people are thinking.

If the numbers show that India is rising (which they do) then the pragmatic Chinese people will realise this as a business opportunity for the future.

Look at the share prices of Rare Earth mineral companies recently... they are shooting through the roof. Who wants to miss an opportunity like that?

Everything is an opportunity. Like Deng Xiaoping said: "I don't care if a cat is black or white... all I care about is how well it catches mice".

 

[RobbieS]

Now that we cleared away the confusions and the trolls, lets get back to discussing the topic at hand. Here's my take-

I think India has a good chance of clocking 9-10% growth over the next two decades. We face two problems that are largely interrelated
1) We have to have inclusive growth and ensure a trickle-down effect and bring a large mass of our people out of poverty. We need provide them good education and means to a job.
2) We have to solve our internal issues, many of which are directly related to the first point above. I am not even worried about external issues, like the one with our western neighbor. If we can get this far without the nuisance to the west, I am sure we can go further.

Now, I dont know why China should slow down. Is a ageing population the only reason? China is a manufacturing hub and the world's always going to need products at a lesser price. And wrt India overtaking China - frankly China is so far ahead in so many respects that it will take India at least two decades to catch up in terms of GDP both per capita and otherwise. Overtaking? May be 2040.

 

[TATA]

self delete

 

[TATA]

It's true that there is a lot of subjectivity in the Economist but it's important to understand what these people are thinking.

If the numbers show that India is rising (which they do) then the pragmatic Chinese people will realise this as a business opportunity for the future.

Look at the share prices of Rare Earth mineral companies recently... they are shooting through the roof. Who wants to miss an opportunity like that?

Everything is an opportunity. Like Deng Xiaoping said: "I don't care if a cat is black or white... all I care about is how well it catches mice".

India is growing for sure but look at the size of its GDP it will need a decade to catch up.

After that the real competition will happen.

And its 100% true Indian private companies are more competitive and strong in global arena.

India's weaknees is infrastacture and government.

And china's strength is govt. but soon it gonna make ur companies lesser competitive.

 

[CardSharp]

Now that we cleared away the confusions and the trolls, lets get back to discussing the topic at hand. Here's my take-

I think India has a good chance of clocking 9-10% growth over the next two decades. We face two problems that are largely interrelated
1) We have to have inclusive growth and ensure a trickle-down effect and bring a large mass of our people out of poverty. We need provide them good education and means to a job.
2) We have to solve our internal issues, many of which are directly related to the first point above. I am not even worried about external issues, like the one with our western neighbor. If we can get this far without the nuisance to the west, I am sure we can go further.

Now, I dont know why China should slow down. Is a ageing population the only reason? China is a manufacturing hub and the world's always going to need products at a lesser price. And wrt India overtaking China - frankly China is so far ahead in so many respects that it will take India at least two decades to catch up in terms of GDP both per capita and otherwise. Overtaking? May be 2040.

This assums China stops dead in its growth...

The rate of catch is determined by the difference in growth

China GDP% growth - India GDP % growth = % rate at which India has to make up the 4 trillion dollar gap.

This rate is going to be small even when India surpasses China's GDP growth (probably in the next few years), I'm talking in the range of 9% for India and 8.8% for China. 0.2% growth of 1.4 trillion base to make up 4 trillion difference....

 

[indushek]

Personally i don't give a damn to such articles as how ever a educated guess we put forward it is actually a guess in the end.

No body can beat hard facts and the fact is India has developed when compared to 1990's a lot but there is long way to go before one can think of reaching the Chinese.

Till then one step ahead is the game. Keep our head down and continue with our work.

 

[Chinese-Dragon]

India is growing for sure but look at the size of its GDP it will need a decade to catch up.

After that the real competition will happen.

And its 100% true Indian private companies are more competitive and strong in global arena.

India's weaknees is infrastacture and government.

And china's strength is govt. but soon it gonna make ur companies lesser competitive.

That's why I think we can learn a lot from each other.

China is very strong in Government and in infrastructure, but Entrepreneurship is our weakness.

This is a consequence of the FDI growth strategy over the past few decades, it's a trade-off we made. We lack world-class home-grown brand names. We do have a few... but not nearly enough to represent our economic size.

For example, the biggest bank in the world is ICBC... but the name is not well known outside of China.... the most well-known Chinese Bank is HSBC (Hong Kong Shanghai Banking Corporation) but it is actually much smaller than ICBC.

 

[CardSharp]

That's why I think we can learn a lot from each other.

China is very strong in Government and in infrastructure, but Entrepreneurship is our weakness.

This is a consequence of the FDI growth strategy over the past few decades, it's a trade-off we made. We lack world-class home-grown brand names. We do have a few... but not nearly enough to represent our economic size.

For example, the biggest bank in the world is ICBC... but the name is not well known outside of China.... the most well-known Chinese Bank is HSBC (Hong Kong Shanghai Banking Corporation) but it is actually much smaller than ICBC.

A complete western myth. China has 2000 years of entrepreneurial experience. We were the first economy that dealt in paper money and banks and the first joint-stock companies etc. There is a reason why once communism let up, private entrepreneurship sprang up over-night. This would not have happened if China has a weak entrepreneurial base.

There's a very good lecture on the subject, talking about how China's capitalist revolution was started by people in the countryside starting their own businesses and factories. It moved into the cities only later.

 

[Chinese-Dragon]

A complete western myth. China has 2000 years of entrepreneurial experience. We were the first economy that dealt in paper money and banks. There is a reason why once communism let up, private entrepreneurship sprang up over-night.

There's a very good lecture on the subject, talking about how China's capitalist revolution was started by people in the countryside starting their own businesses and factories. Then moved into the cities.

Historically, yes. Chinese have long been inventors, like with gunpowder/paper etc. there is no doubt about that.

However it is true that in "modern China", we do not have enough strong brand names with respect to our economic size. Compare to South Korea for instance.

 

[CardSharp]

Historically, yes. Chinese have long been inventors, like with gunpowder/paper etc. there is no doubt about that.

However it is true that in "modern China", we do not have enough strong brand names with respect to our economic size.

There is a difference between strong international brands and entrepreneurial amongst the Chinese people. The lack of brands has roots more in cultural difficulty than anything.

 

[Chinese-Dragon]

There is a difference between strong international brands and entrepreneurial amongst the Chinese people. The lack of brands has roots more in cultural difficulty than anything.

That's what I mean. To clarify, I am talking about brand names rather than the innovative capabilities of the Chinese people.

Think about it... mainlanders and Hong Kong people and Taiwanese are exactly the same, genetically, culturally, etc. It's the model of growth that explains the difference in brand names per capita.

The mainland chose to go for a "FDI" route of growth, which meant letting multinationals set up factories in China. This resulted in creating the second largest economy on Earth with a growth rate that was unparalleled in ALL of human history. The downside is the lack of international brand names, that is the trade-off. I think it was worth it.

 

[TATA]

There is a difference between strong international brands and entrepreneurial amongst the Chinese people. The lack of brands has roots more in cultural difficulty than anything.

Both of you and Chinese-Dragon have some valid points.

In my opinion chinese are not weak in entrepreneurship historically.

It was the strength of Indian and Chinese civilization and entrepreneurship that we two were the biggest economy of the world for most of the times in the history.

But we are talking about present situation.

The CPC have killed the innovation, entrepreneurship or rather to say independent thinking in Mainland.

Look at Hong Kong or Taiwan where you will see the same people of Chinese origin mastering entrepreneurship and innovation.

 

[CardSharp]

That's what I mean. To clarify, I am talking about brand names rather than the innovative capabilities of the Chinese people.

Think about it... mainlanders and Hong Kong people and Taiwanese are exactly the same, genetically, culturally, etc. It's the model of growth that explains the difference in brand names per capita.

The mainland chose to go for a "FDI" route of growth, which meant letting multinationals set up factories in China. This resulted in creating the second largest economy on Earth with a growth rate that was unparalleled in ALL of human history. The downside is the lack of international brand names, that is the trade-off. I think it was worth it.

All this talk about Chinese people being unable to innovate and having entrepreneurial spirit is hogwash and comes out of the racist and stereotypical view of Chinese people are not individuals. We are the yellow horde in Korea attacking like automatons in human waves.

Just a shame that so many people still buy into this racist POV even in mainstream.

 

[Chinese-Dragon]

Both of you and Chinese-Dragon have some valid points.

In my opinion chinese are not weak in entrepreneurship historically.

It was the strength of Indian and Chinese civilization and entrepreneurship that we two were the biggest economy of the world for most of the times in the history.

But we are talking about present situation.

The CPC have killed the innovation, entrepreneurship or rather to say independent thinking in Mainland.

Look at Hong Kong or Taiwan where you will see the same people of Chinese origin mastering entrepreneurship and innovation.

I agree with all of your post except for this one sentence:

"The CPC have killed the innovation, entrepreneurship or rather to say independent thinking in Mainland."

The mainland has always been the primary driver of Chinese civilization and it's still true today. Except instead of international brand names they have concentrated more on FDI and infrastructure, and I think it's a good move.

Why was Hong Kong so successful? Because we were the gateway between mainland China and the international markets. Without the mainland we would be nothing but another island.