Comments on: China or India? … And Follow Up Questions?

By: Leslie Mann

Leslie Mann — Fri, 19 Mar 2010 08:31:26 +0000

As Alex pointed out, it is interesting to see the graph on the growth and decline of the share of Global GDP since the 17th century. More interesting to note too is how this graph will appear in the next 25-50 years. I imagine it will be a much more leveled playing field.

China takes the lead in just about everything over India. From investment expenditures to literacy rates, it seems Chins will always be ahead and India will always be struggling to catch up; just as the US economy has risen to superpower status, and just as we are seeing now, it’s slow decline from that podium, China’s growth will, someday taper off. India should be proud of its second place standing. Most people don’t view taking second with much pride but lest we forget that India’s democratic government is just 60 years young, and in a relatively short amount of time, the economy and the opportunity for its citizens to succeed have come a long way. India, in this respect is like a young child, ambitious, dedicated and willing to take risks. China, the seasoned adolescent is prideful and aggressive and if not paying close attention, may see the young child finish first after all. An article from last June 2009 states, “The World Bank has projected (in its Global Development Finance Report) that the Indian economy will grow at 8% in 2010, which would make it the fastest-growing economy in the world for the first time, surpassing China, which is projected to grow at 7.7% rate.”

For the full article: http://seekingalpha.com/article/145032-india-projected-to-be-the-fastest-growing-economy-in-2010

By: Jordan Wente

Jordan Wente — Thu, 18 Mar 2010 20:58:19 +0000

I agree with you both that an authoritarian government is very effective in certain situations. This has been proven by China’s ability to grow so rapidly and make the tough decisions that enabled this growth. I also believe that in a time of crisis people look to the government to handle crisis. Authoritarian governments can be very effective in these situations. We have experienced crisis here in the United States where the citizens look to the government to handle the situation and hand over more power to the government to deal with the crisis. This happened in tough economic times through out US history and even more recently after 9/11. So we can see how helpful an authoritarian style government can be however it comes at a cost. I think the major point that is being stressed in China is not an ineffective government but rather the risk of political instability arising from the citizens. Effectiveness does depend on the leaders but there are still many political risks that remain. I do not in any way agree that democracies and capitalism are the best way but I do think that in the long run India will be better off. However, this depends on if the country can find a way to get over some of the hurdles of democracy and continue to grow. The social contract implied between the government and the citizens will remain an important aspect of continued stability and prosperity in both countries. The inefficiencies India has to overcome, as noted in the blog post, are going to become very crucial to its overall economic success. India has many advantages that have helped the country grow and I think they will continue to lead the country to a bright future.

By: Yuxiang Gao

Yuxiang Gao — Mon, 08 Mar 2010 18:04:37 +0000

China and India provide vast opportunities for trade and investments in all major sectors including information and communication technologies, energy, chemicals, natural resources, textiles, metals.
Global companies can benefit from large and skilled, yet comparatively low-cost human resources for the entire spectrum of activities
Further, doing business in China and India is not without risks. There are many challenges and risks spanning infrastructural, social, cultural, political, regulatory, intellectual property, and labor laws.
As what Alex mentioned, the effectiveness of an authoritarian government is based on the ability of its leader(s). If an authoritarian government has good leadership, it can preform much more effectively than a capitalist democracy.
I totally agree with this point. In addition, Authoritarian government is very helpful when facing some serious crisis.

By: Alex Thornton

Alex Thornton — Sat, 12 Dec 2009 00:53:00 +0000

The original PDF appears to be gone now. This appears to be the same document.

One major thing that I noticed is that you really have to look at the graphs in the PDF to get a feel for the past 300 years of economic history. For example, the chart entitled “Historical share of global GDP” Shows how the US went from 0% of global GDP to over 25% after WWII. Meanwhile, China and India went from nearly 25% each to less than 5% each.

The section “Sources of Growth” debunks the idea that “China’s authoritarianism allows the government to make quick, unpopular decisions that are more difficult and time consuming in democratic India,” by claiming that “many democracies have performed exceptionally well (Japan, Ireland) while many authoritarian countries have sunk into poverty and despair (Soviet Union, much of Africa and the Middle East).”

The belief that democracies and capitalism are always better than authoritarian governments is a generalization. In fact, the effectiveness of an authoritarian governments is based on the ability of its leader(s). If an authoritarian government has good leadership, it can preform much more effectively than a capitalist democracy.

The trouble, of course, occurs when the effective leaders are replaced by new ones. In a democracy, new leaders tend to be as effective as the previous ones and there is little or no bloodshed. In contrast, Authoritarian transitions of power tend to start civil wars and the new leaders are typically good at ceasing power, but not government administration.

Though it is improbable that China has had high quality leadership continuously for 30 years now, it is by no means impossible.