I would never have written such a post had I not come across a post on a forum (gplus.com) listing 10 advantages that India has over China for 21 century economic growth. So the following text is an adaptation of my response to that list.
Out of the list, I find only 3 worth discussing, although they are still not the fundamental drive of competency, according to my opinion :
1) India's resource consumption has decreased for every incremental dollar of GDP since 1991 (as against China, which was using three times more resources per dollar of GDP than India).
2) India is in a very sweet demographic spot, being the youngest country in the world: half a billion Indians are less than twenty- five years old, giving it a unique 'demographic dividend' among peers.
3) Its judicial system is robustly based on English common law. It's a genuine, albeit imperfect, democracy.
My response :
1. Cost of GDP. A quick look at the composition of both countries economy will tell you that India is focused on service (Service : fluctuating around 50% of GDP; industry : around 25-30% of GDP, and employs less than 20% of the workforce; agriculture : around 30%, but employs 60% of the workforce) while China has a more balanced distribution between service and industry (service : industry : agriculture = 43 : 47 : 10). Of course a call center will incur lower cost than a steel company. In case of the tail risk that the west alienates both countries, guess who will survive better?
2. Demography.
-Younger population is good, as long as they produce enough to reach beyond supporting themselves. If a big portion of them are hungry and (semi-) unemployed, it's hard to justify glorifying a big (young) population. In that, as the only-child in my family, I personally respect China for making a responsible sacrifice, while India cannot feed its biggest population. If a bigger young population is unconditionally advantageous, come on, it's not like Indians are better at giving birth than Chinese are. Not to even mention that China has more natural resources such as land and water to accommodate a bigger population.
-As a direct benefit of a one-child policy, the new generation of Chinese has a astronomically better opportunity in terms education and health than the older ones. Needless for me to prove that it's productivity that matters, not population. A smaller educated and healthy population might be more collectively productive than a bigger but uneducated and under-nutrition-ed one.
-Assume everything goes well in China : economy is booming, and opportunities ample for young people. Hey, maybe young Indians and other young Asians want to immigrate to China. We have been seeing more and more young Indian faces already in Beijing and Shanghai - people "vote with feet". Assuming there is not such a splendid future, many people do not have a job anyway, and it's safer to have a lot of old "unemployed" than young ones.
-a 60 years old today is not the same as a 60 years old in 20 years. Many 60 years olds might want to work in 20 years.
-With technology advance, fewer people need to work, people need to work for fewer hours, and work is less labor intensive.
3. Whether democracy is superior in terms of promoting production, it's in fact quite debatable. What matters for economic boom, I think, is economic freedom. They might be correlated, but not the same (Singapore is a good example).
Both nations' recent development are very respectable, and obviously both are not without problems. There is a huge essay I can write about this topic but I can comfortably drop most of my arguments because I think they, as well as most of the above, are just scratching the surface of the problem. I think the most fundamental (economic) competition edge for any nation relies upon economic freedom (including but not limited to rule of law) and education, with the former significantly depending upon the latter. Both India and China cannot boast on either. So if there is a race between India and China, it's a race of education. Just like neither big nation can organize a competent soccer team, population also does not correlate with economic success; a disorganized and disengaged big population only creates chaos - a younger population creates a more severe chaos in that case, for the obvious reasons.
Out of the list, I find only 3 worth discussing, although they are still not the fundamental drive of competency, according to my opinion :
1) India's resource consumption has decreased for every incremental dollar of GDP since 1991 (as against China, which was using three times more resources per dollar of GDP than India).
2) India is in a very sweet demographic spot, being the youngest country in the world: half a billion Indians are less than twenty- five years old, giving it a unique 'demographic dividend' among peers.
3) Its judicial system is robustly based on English common law. It's a genuine, albeit imperfect, democracy.
My response :
1. Cost of GDP. A quick look at the composition of both countries economy will tell you that India is focused on service (Service : fluctuating around 50% of GDP; industry : around 25-30% of GDP, and employs less than 20% of the workforce; agriculture : around 30%, but employs 60% of the workforce) while China has a more balanced distribution between service and industry (service : industry : agriculture = 43 : 47 : 10). Of course a call center will incur lower cost than a steel company. In case of the tail risk that the west alienates both countries, guess who will survive better?
2. Demography.
-Younger population is good, as long as they produce enough to reach beyond supporting themselves. If a big portion of them are hungry and (semi-) unemployed, it's hard to justify glorifying a big (young) population. In that, as the only-child in my family, I personally respect China for making a responsible sacrifice, while India cannot feed its biggest population. If a bigger young population is unconditionally advantageous, come on, it's not like Indians are better at giving birth than Chinese are. Not to even mention that China has more natural resources such as land and water to accommodate a bigger population.
-As a direct benefit of a one-child policy, the new generation of Chinese has a astronomically better opportunity in terms education and health than the older ones. Needless for me to prove that it's productivity that matters, not population. A smaller educated and healthy population might be more collectively productive than a bigger but uneducated and under-nutrition-ed one.
-Assume everything goes well in China : economy is booming, and opportunities ample for young people. Hey, maybe young Indians and other young Asians want to immigrate to China. We have been seeing more and more young Indian faces already in Beijing and Shanghai - people "vote with feet". Assuming there is not such a splendid future, many people do not have a job anyway, and it's safer to have a lot of old "unemployed" than young ones.
-a 60 years old today is not the same as a 60 years old in 20 years. Many 60 years olds might want to work in 20 years.
-With technology advance, fewer people need to work, people need to work for fewer hours, and work is less labor intensive.
3. Whether democracy is superior in terms of promoting production, it's in fact quite debatable. What matters for economic boom, I think, is economic freedom. They might be correlated, but not the same (Singapore is a good example).
Both nations' recent development are very respectable, and obviously both are not without problems. There is a huge essay I can write about this topic but I can comfortably drop most of my arguments because I think they, as well as most of the above, are just scratching the surface of the problem. I think the most fundamental (economic) competition edge for any nation relies upon economic freedom (including but not limited to rule of law) and education, with the former significantly depending upon the latter. Both India and China cannot boast on either. So if there is a race between India and China, it's a race of education. Just like neither big nation can organize a competent soccer team, population also does not correlate with economic success; a disorganized and disengaged big population only creates chaos - a younger population creates a more severe chaos in that case, for the obvious reasons.
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