Question

Why India is better than China?

Answer 1

India is mixture of religions

Answer 2

10 reasons why China is ahead of India


What sets China apart from India and is there more to it than meets the eye when it comes to China's growth figures?

Some leading corporate leaders from Asia debated on this at a conference recently held at the Indian School of Business in Hyderabad.

The emerging markets of Asia hold the promise for the world's corporation. India and China are the two key markets in Asia.

But China today leads India significantly. It gets ten times as much foreign direct investment as India does and its economic growth rate is much faster than that of India.

India has been showing a gross domestic product growth of an average of 5 per cent for the last five years. In contrast, China has averaged at least 9 per cent growth.

With China threatening now to become a force to reckon with even in information technology services, Indian corporate leaders are examining why China ranks better than India and what are its (India's) weaknesses.

In the first part of this series, we look at the ten reasons why China is ahead of India.

In the second and concluding part we will look at whether there is more to China's economic growth numbers than what meets the eye.

Here are ten reasons, according to the experts, why China is ahead of India.
An authoritarian government

"Once committed to a focus on economic growth, some good policy decisions were implemented quickly and efficiently. From the time Deng (Xiaoping) set the direction 25 years ago, it has not been altered by party politics, ideology or leadership changes," says  Kenneth J Dewoskin, Senior Consultant, PricewaterhouseCoopers (China).

While India's corporate leaders agree that this could be true, they are emphatic that India's vibrant democracy is the only way for the country to ensure that growth and development reaches all.

"There is chaos in it and sometimes policy decisions tend to be reversed. But ultimately India's democracy is essential for the country's welfare," says Lalita Gupte, Managing Director, ICICI Bank.

. High savings rate

According to Dewoskin who has been involved with China for the last 40 years, China has a high savings rate, which is recycled and concentrates wages paid to workers into four large state banks.

This capital is in turn directed by the leadership, which concentrates this available capital into key projects.

This capital has consistently financed more than 85 per cent of China's infrastructure investment.

. Investment in models and showcases

China's leadership has always focused on investment in models and showcases. All this has helped canalize foreign direct investment into the country and helped create local economic development.

For instance, Shenzhen and Zhangjiagang were developed into fantastic models that could help sell not only the region, but also China as a whole to investors.