Aspirations of emerging giants

The dissimilarities and similarities between India and China have roots in historical reasons of India-China economic relations.

3631106948_21baf21e12_oIn the contemporary world, the democratic process of governance is treated as sacrosanct. It rarely matters how chaotically it serves towards protecting individual freedom, liberty and property of its citizens. Democracy is also seen as the foremost method to govern modern civilisation. India and China, the most studied and debated nations in the first decade of this millennium, still remain the least understood. While both the nations are diverse, they are also emerging economic giants with a population of over a billion each. Both have been much talked about for their potential to clinch the title of economic superpower from the western economies. However, given the complexity, it is difficult to make a comprehensive comparison between India and China.

It is believed that India’s strength is its democracy. But the fact remains that its quality of governance is far worse than most countries including China, in terms of economic and social development. On the other hand, China is yet to establish a credible form of democracy. Nevertheless, nothing stopped the authoritarian system in China to do the right things on economic and social development in the last three decades. Despite impediments, China has emerged ahead of India. What really enabled China to reap from its resources is the timely realisation of the changes in the world trade and technological developments in which India is still struggling to do better despite its vast availability of resources.

Both in terms of GDP growth rate as well as human development indicators India stands behind China. China’s average GDP growth rate was 10 percent and 10.2 percent during the period 1990 to 1999 and 2000 to 2011 respectively. While India achieved GDP growth rate at 5.6 percent and 7.3 percent during the same period. Similarly, the average annual growth rate of Human Development Index of China was 1.73 percent and 1.62 percent during the period 1980 to 2011 and 1990 to 2011 respectively. The figures for India were at 1.51 percent 1.38 percent during the same period.

The difference in fundamental comparisons between India and China are best encapsulated in the prophetic words of Wuttke, who said “Chinese educate for practical life, the Indians for the ideal; those for earth, these for heaven; those educate their sons for entering the world, these for going out of it; those educate for citizenship, these for priesthood; those for industrial activity, these for knowledge; those teach their sons the laws of the state, these teach them the essence of the Godhead; those lead their sons into the world, these lead them out of the world into themselves; those teach their children to earn and enjoy, these to beg and to renunciate.” Whether one agrees or not, it is difficult to better these words, which capture the difference between India and China in its ethos and antiquity. The economic, social and political developments in these two countries have to be seen through the words of Wuttke.

On the similarities between the two nations, Chie Nakane, a Japanese anthropologist wrote in 1998 that “…their respective great civilizations were formed along the two great rivers: the Indus and Ganges in India, the Huang-he and the Yangtze River in China, all of which originated in the Tibetan Plateau. The modern capitals of both countries, Delhi and Beijing, are situated in the north. In the south-east are situated two large cities, Calcutta and Shanghai, each at the mouth of the great rivers of the Ganges and Yangtze, backed by the fertile and productive areas of Bengal and Jiangsu. Both cities received the first impact from the West, its citizens were earliest exposed to Western culture and the two cities become the centres of modern rich cultures. Similarly, the southern regions of both countries have a high population density: Tamil Nadu and Kerala in India, and Kwangtung and Fukien in China. Further, both countries possess rich granary regions in the inland area of the Punjab and Sichwan. It is interesting that the names of these two regions connote rivers- the Five revers and Four rivers. Both societies possess a certain similarity, being composed of wheat-producing areas in the north and wet paddy cultivation in the south…”

These dissimilarities and similarities have roots in historical reasons in India-China’s economic relations. Great economic historian Angus Maddisson showed that India and China were the leading economic powers of the world till 1830. India had 32 percent share of world’s GDP from first millennium till 1700 and 28 percent to 24 percent in the second millennium till 1700. China was second to India except in 1600 when China temporarily overtook India. In 1700, India again overtook China. Thus the reemergence of India-China in the 21st century, in their own way, is actually based on the wisdom of centuries’ old entrepreneurial spirit which now independently drives both these economies towards prosperity. India was at its peak in pursuing the “socialist pattern of society” when the Chinese realised that the preaching of communism and socialism were degrading the lives of millions of people. It took India a decade to realise the same when the balance of payment crisis stymied the Indian economy in 1990s. Unlike China, India has realised quite obviously that the government alone cannot serve the needs of the citizens. The process of economic reforms pursued in the last two decade has strengthened competition and added choice in many sectors. This has helped even the poor who now have access to basic goods and services, inaccessible earlier. While Chinese economic growth is largely driven by government intervention, whereas, India’s growth is driven by its vibrant private sector.

There are talks about rivalry between India-China, but the fact remains that in the era of the globalised world, the emerging economic power in India-China is two sides of the same coin. Almost a century ago in 1915, in his inaugural lecture at University of Allahabad Professor Herbert Stanley Jevons said that “India is the greatest unit of civilized government in the world… China will, I suppose, be our great rival in the future; but as yet in China there is no authority which can even keep the peace throughout the land, not to speak of reforming the currency and purging the administration of corruption in high places”.

China might have got its own authority to govern now but every major economy in the world is expecting something to change in the affairs of Chinese’s idea of political reforms. In India, expectation is mainly for next level of economic reforms, especially the institutional reforms though, the much talked about demographic dividend of India-China has already started fading away. According to Professor Raghuaram Rajan “there is more democracy in China than is reflected in its elections”. However, one thing that the world is eagerly waiting to happen in China at least in next half a century (or before) is that it becomes a functional democracy.

Photo: Huang Xiang and William Rock