Can India Overtake China?

Discussion in 'Economy & Infrastructure' started by EnlightenedMonk, May 9, 2009.

  1. EnlightenedMonk

    EnlightenedMonk Member of The Month JULY 2009 Senior Member

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    Can India Overtake China?

    Yasheng Huang is an associate professor at the Sloan School of Management at the Massachusetts Institute of Technology. Tarun Khanna is a professor at Harvard Business School.
     
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  3. EnlightenedMonk

    EnlightenedMonk Member of The Month JULY 2009 Senior Member

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    That's an ancient article (Written in 2003), but I did find it an interesting read and decided to post it...

    The link, for everybody's reference is - Can India Overtake China?
     
  4. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    well this happens to be an article written some 6 years back and back then a lot of things were said of how india would beat prc hands down, this article reminds me of mukesh ambani saying that we will beat prc in economic growth terms is 2yrs time way back in 2005 and one is still waiting for that to happen. in fact before the recession hit the global scene there was this huge surge of such articles where the constant subject was of how, and when india will beat prc in economic growth terms and when would india overtake them in terms of economic size but since the recession happened all such talk has seen a clear slump as prc has risen to heights that at this very moment india cant match. having started my post on a reality check note i would now like to talk about the subject at hand.


    a fair assessment presented by the two authors and they do see the situation as it stood then and nothing much has changed since but then there have been giants like lenovo, haier, hutchson and many more that have grown from the land where ideology is extremely suspicious of private players/individuals who have an ability to grow to a position of a strength from where they could interfere in the working of a government. india quite clearly wins this battle of india private companies v/s the chinese private companies hands down and reasons are well sighted in the article. our strength has been the private companies and the secret to our success story so far economically has been because of these very companies and i must say it has nothing to do with the state as a matter of fact it has all to do without the state. 1991 was the year that changed it all for our pvt players and one has to commend their skills set and adaptability who even on the face of stiff competition and an onslaught form those MNCs stood their ground well and not only that, they went to the extent of ascertaining their command by taking over some of the biggest of the names in the global business world. i still recall reading opinions in the early half of 90s how the so called economic experts would say that the old economy companies and mindsets like the TATA's, reliance's, birla's, bajaj's and others of that era would completely loose out and be swallowed by the real sharks of the trade and how wrong they were. indians are highly regarded for their managerial skill sets something that is not in abundance in the chinese and i have seen from my personal experience how people around have moved out of the country purely on the basis of these very skills and mind you i have had a back ground of fmcg and fmcd and i have nothing to do with the IT industry and this outward movement has happened from with in the companies who after seeing the success of these individuals have given then a lead global profile something that is not common with people from prc. as a matter of fact most overseas MNCs in india are headed by indians something which is again not common in prc. india's economic success is a tribute to our pvt companies and to numerous such individuals who have run some very successful businesses for others in our home turf.


    if i am not wrong then there were some drastic changes made in prc in lending of loans to the chinese owned pvt companies in 2007 which would give them a fair play ground wrt to the MNCs in that country who till then got a step motherly treatment but as far as i know they still do not quite have a level playground as of date and till the time these hurdles are not removed we can be rest assured that we will rule the roust in this field. in the homegrown companies arena prc's strength are their state owned companies which are massive by any standards and this is because of their huge consumer base they have and precisely for this reason i feel we should resist disinvestment of the PSUs that are performing well because these companies have the potential of growing so huge both because of consumer base in india and overseas that where ever overseas these companies were to invest they would become a tool of furthering our foreign policy as they would hold a lot of clout in the govts in most overseas markets that they would invest in. this is one lesson i would like the GoI to take from the cpc on the state owned companies and as it is our state owned companies are no were as miss managed as the prc state owned companies are, as a result our NPAs are a no match for the chinese where they literally struggle in containing their NPAs though they have made some smart moves on this front off late and have brought the figure down to 7% from once 22%.
     
  5. johnee

    johnee Elite Member Elite Member

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    Well before we talk about one beating the other, we need to know the actual situation of both. Situation of India is open and transparent(well, as transparent as it can get), but what is the real position of China? Is China riding a huge bubble? Or Is China the success story true? We really dont know. The best we can do is make our guesses based on some random data points. They could be true or mislead. But one needs to wait and watch, maybe we will know the situation in about 5yrs time.
     
  6. gogbot

    gogbot Regular Member

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    India has always had the potential, only time can tell how much of it is realised.
     
  7. badguy2000

    badguy2000 Respected Member Senior Member

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    why should India "overtake" china?

    India has danenged(chinglish,“大能的”,almighty) and glory democracy while CHina is sick totalism.

    India is quite ahead of CHina.

    It is China that should "overtakes" India.
     
    Last edited: Apr 8, 2010
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  8. Aruni

    Aruni Regular Member

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    In many years I have seen no other topic spiralling out of control more often that this one. I hope the members keep it sane in this instance.

    In pure economic terms there is no comparison. China is richer per capita wise, it has better infrastructure, it scores higher on the human development index and has a higher growth rate (i.e. it is pulling ahead as I type this). There are a few aspects of China which are 'botoxed up', such as slums being easily swept aside to make way for swanky buildings, or beggars being banned from certain parts of cities. India cannot do similar things, and I hope it never comes to that. There have been some worrying emulations of Chinese tactics in India's industrialisation process (e.g. land grabbing) but civil society has held up well so far to ensure that the rule of law prevails.

    India has a comparative advantage in certain areas (such as IT and BPO) whereas China commands a massive lead in manufacturing. Over time Chinese wages will rise and labour shortages will mean more business will be attracted by other countries. However, that is at least 15-20 years away and in the medium term China will remain the manufacturing capital of the world.

    Often people say democracy has a 'cost'. I don't look at it quite like that. It is an asset on our balance sheet and every asset in a business costs money. Over time when income levels equalise in India and China, would it be preferable to live in a free society where Google isn't harassed? I think so.
     
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  9. BunBunCake

    BunBunCake Regular Member

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    China is in a 'higher' economic status than India, because it's not a Democracy. We cannot compare the ecomomies of these two countries. Yes our population is equally the same, but China is a communist country where almost everyone has jobs (4% unemployment), same wages, and more of all, the Government controls anything.---Credit goes to Chinese government, doing a good job though.

    India is a democracy which will face it's up's and downs, because our people aren't ruled by one god.
    Dr. Singh said during his last visit to D.C, A democracy may not seem as prosperous as a communist country in the beginning, but in the long term the Democracy is benificial.

    And that is true. India is still a young democracy. Think about this before comparing India and China. They are two diffrent forms of government. I'm not a great expert in economics from the definition of what 'communism' is; i do know why China is doing better than India. But I guarantee you, Indian people's lives are much different than Chinese...... (with the exception of the poor, yes we do need to work on literacy rates, poverty)

    Hopefully India will become the most prosperous country once again.
    =)
     
  10. Necrosis Factor

    Necrosis Factor Regular Member

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    Not to distract but a really quick correction. China being a communist country has nothing to do with job employment. It has to do with the types of jobs that exist and the government's willingness to participate in infrastructure building. You can argue that's communism for you, but there are a lot of examples of so called "rich democracies" doing the same. Examples: Japan, the US (post-WWII), it goes on..

    More importantly, the wage gap is quite a lot bigger in India that China, but it's not because of government interference. The Chinese political system has basically withdrawn it's finger from touching salaries and let companies manage that themselves for the most part. The more equal wages is because of the specific set of jobs in China. Like they say, China is Communist only in name.
     
  11. Singh

    Singh Phat Cat Administrator

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    You talk like a Martian.(pun intended)


    Income divide in China is much higher than in India. Even regional divide in China is much higher than in India.
     
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  12. luke

    luke Regular Member

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    When I read the article,I think they just see that China have many problems,but don't see the Problem-solving efforts,so when they predict the future:India become better but China don't have any change.That’s their Failures.As for the “Overtake”,I don't know What is regarded as “overtake”.Economic growth is the long-term thing,will you compare one years ,ten years or 50years?If you don't have the standard,what's the meaning of “overtake”?China have kept the high growth for 30 years,but our GDP still can't overtake Japan,as for high tech,the gap still is bigger.China won't keep the high speed forever,there's no wonder the economic growth will decrease,then what's the “overtake” you guys say.Overtake the highest growth China ever create?Or just the economic growth in one year(of course,the next years it should be still overtake).I think everyone have his idea about “overtake”,and the future will show us the fact.
     
  13. luke

    luke Regular Member

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    Then,what about Japan,South Korea,Taiwan?All of them ever created their Economic Myths.I don't think it have too much relationship with the Political system.North Korea still have bad economic.
    Don’t believe the unemployment rate:it's boring and meaningless.
    Chinese even don't believe the god.(just a joke)
     
  14. badguy2000

    badguy2000 Respected Member Senior Member

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  15. nimo_cn

    nimo_cn Senior Member Senior Member

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  16. badguy2000

    badguy2000 Respected Member Senior Member

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    such a growth of 10%+ can not be sustainable.8-10% is enough.
     
  17. shotgunner

    shotgunner Regular Member

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    This quarterly growth of 11.9% is nothing big deal, cos the denominator (i.e. 2009Q1) is low. Remember the growth of same quarter last year (2009Q1 YOY) was only about 6.7%? It will come down in following quarters.

    BTW, such topics are so misleading, they should talk about "Can China overtake India?" instead. Face the reality, as Wen Jiabao pronounces repeatedly in many public occasions, we are just a poor and under-developed country. Wish India good luck on its fast-track to be global superpower!

    "Stay low profile, never take the lead" -- Deng Xiaoping
     
  18. nimo_cn

    nimo_cn Senior Member Senior Member

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    Welcome back, shotgunner!
     
  19. no smoking

    no smoking Senior Member Senior Member

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    Of course India can overtake china. Nothing is impossible.

    But the way to reach this goal is that indians must work harder and smarter than chineses. Writting this kind of papers won't resolve any problem in india. Instead, india should focus on its own problems.
     
  20. roma

    roma NRI in Europe Senior Member

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    very true --- my add is that india has to become more lke china in terms of less political parties and more actual work done instead of unproductive politicking . In China the politicking is left to a very few at the very top a minimal number - and the production force at any level is not involved in that , so work goes on as per normal - no excuses and productivity measurement is required monthly or weekly . In india i feel there are too many political parties too much politicking masquerading as "democracy" and too few left to do the actual work as most prefer to do politicking instead . China has the better system for such large populations . FOr india to take democracy , a system used by countries with much smaller populations, it is unsuitable - have to compare like with like and the only other contry like india in population size is china - and they are by far economically more successful so it really ought to be quite obvious - copy china - why require a PhD paper to tell us that ?
     
    Last edited: Dec 16, 2010
  21. amoy

    amoy Senior Member Senior Member

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    pls consider different contexts... for example in China religion has never been a big issue in politics. some dynasties claimed to be 'religious' but were always wary of religion meddling with politics; Ethnically China is diversified with many groups/subgroups, but Chinese have a strong identification with the culture since Emporer Qinshihuang uniformed writing script/measurement etc. far befor Christ; India carried over a 'democratic legacy' from British Raj as well as 'pluralism'. Yet China has always been 'totalitarian' since ROC era (despite a transient but chaotic period of 'democracy' during 1911-1920's)

    I don't follow that India shall copy China or China copy India. Each has to go their unique way.
     

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