HOME to nearly two-fifths of humanity, two neighbouring countries, India and China, are two of the world’s fastest-growing economies. The world is taking notice. In December, a report by America’s National Intelligence Council likened their emergence in the early 21st century to the rise of Germany in the 19th and America in the 20th, with �impacts potentially as dramatic�.
That India is an open society and China is not is one of the most glaring differences between the two. Some people in both countries are tempted to use it to explain another: that China’s economy has grown much faster. This survey will argue that this view is simplistic and misleading.
Some of the main reasons for China’s better performance have nothing to do with the political system. When China started its reforms, in 1978, it was poorer than India. Part of the gap now is due simply to that earlier start.
India is often portrayed as an elephant: big, lumbering and slow off the mark. Now investment-bank reports are beginning to talk of it as a new Asian �tiger�.
According to the World Bank, 87% of adult Chinese women are literate. The equivalent figure in India is 45%. Many things follow from educating girls: better health and education and longer lives for the whole family; more productive workers; and a boost to industrialisation and urbanisation. �An educated child�, says Asian Demographics’ Mr Laurent, �does not want to plant rice.�
The other consequence of smaller families has been a sex ratio strongly skewed in favour of boys. In China there are 118 boys for every 100 girls born, compared with a natural ratio of 105 to 100. India’s figures are also skewed, but to a lesser extent. The most recent census, in 2001, showed 108 boys under the age of seven for every 100 girls.
The foreign-investment boom in China was started by overseas Chinese. From 1985 to 1996, two-thirds of foreign investment in China came from Hong Kong, Macau and Taiwan. There China has, close at hand, some 30m ethnic Chinese, many of them with close ties to the mainland. Moreover, these places specialised in labour-intensive manufacturing industries for export. Wage costs were rising fast, so, in effect, they exported their trade surpluses with America to coastal China. They were made very welcome, for political as well as economic reasons, and paved the way for the big multinationals.
Overseas Indians, in contrast, are scattered around the world and across professions. There are a number of global tycoons, tens of thousands of software engineers who powered Silicon Valley’s dotcom boom, and millions of others. It is not surprising they have played a different role to that of the Chinese diaspora.
Except for the brief interlude of �emergency� imposed in 1975 by Indira Gandhi, the then prime minister, Indian democracy has stuck. It may have seemed an improbable experiment in such a poor, ethnically divided and hierarchical society, but it has proved resilient and deep-rooted. Turnout at elections is higher than in many developed countries�and it is the poor who vote in large numbers. The system may not deliver economic growth rates of 9-10%, but nor has it imposed Mao Zedong’s murderous millenarian lunacies.
After Jawaharlal Nehru became independent India’s first prime minister in 1947, his Congress party enjoyed three decades of uninterrupted rule, most of them with a large parliamentary majority. It took the chance on offer to make radical choices and changes. It is not democracy’s fault that many of them were the wrong ones.
Well there you have it… of course, I have given you just a small taste of it. Obviously I can’t give more, else I’ll probably be sued. Do check out the latest copy of the Economist and see for yourself. I, in the meantime, shall wander around cyberspace, smug in the knowledge that the Economist agrees with me, rather than Deeshaa.org… it is simply a matter of time, before I will have to change the title of my blog… the sooner, the better.