The Indian Economy Blog

March 2, 2006

Garden Of The Forking Paths?

Filed under: Business — Edward @ 8:54 am

Hello, after a short work-enforced absence I’m back. I have not been completely idle these last weeks (and here). Also Atanu and I have cut a podcast together for James Reese on Radio Economics which will go online on Sunday. Meantime this is really just a short ‘warm-up post’.

One of the topics which Atanu and I have been chatting about is the relative sterility of all these India/China comparisons. But having said that I can’t help feeling that far too many people have a ‘down’ on India which has no real rational basis (and a rose coloured filter over China, for which ditto). Put another way, why do I manage to believe in India when so many others seem so full of doubts? I don’t know, I think this is a topic which I am about to explore.

Certainly in the news today is just one more reason why I think China’s break-out from the manufacturing-based economy is going to be much more difficult than many seem to imagine. The reason this time? China is effectively trying to create a walled garden information environment for its citizens:

China has announced it is creating a new set of domain names based on Chinese characters.

China has created three of its own top-level domains that will use the domain names .cn, .com and .net, in Chinese. The domain names were launched on Wednesday by the Chinese Ministry of Information Industry.

The creation of Chinese character domain names has led to speculation that China could break away from ICANN completely, and undermine the global unity of the DNS, the network of servers that resolves domain name requests.

“It means Internet users don’t have to surf the Web via the servers under the management of ICANN, of the US,” reported the People’s Daily Online, a Chinese Government-approved publication.

The Chinese government is effectively trying to separate off its citizens from the rest of the information universe, under the pretext, of course, of avoiding US domination.

The Tasmania Effect?

Jared Diamond once explained some of the consequences of cutting yourself off like this in the context of the physical separation of Tasmania from the Australian mainland at the end of the Pleistocene era:

How did those enormous gaps in Tasmanian material culture arise?

The answer stems from the fact that Tasmania used to be joined to the southern Australian mainland at Pleistocene times of low sea level, until that land bridge was severed by rising sea level 10,000 years ago. People walked out to Tasmania tens of thousands of years ago, when it was still part of Australia. Once that land bridge was severed, though, there was absolutely no further contact of Tasmanians with mainland Australians or with any other people on Earth until European arrival in 1642, because both Tasmanians and mainland Australians lacked watercraft capable of crossing those 130-mile straits between Tasmania and Australia. Tasmanian history is thus a study of human isolation unprecedented except in science fiction ÷ namely, complete isolation from other humans for 10,000 years. Tasmania had the smallest and most isolated human population in the world. If population size and isolation have any effect on accumulation of inventions, we should expect to see that effect in Tasmania.

Meantime Google seems to be going full speed ahead leveraging its huge engine capacity in an attempt to tow China back towards shore.


  1. —————————————–
    nobody can stop you if you try hard to add your bias to a normal news. it’s really funny your brain-washed head can think of a “walled garden” :)
    Chinese domain name has been asked for a long time since many Chinese people don’t use English at all. For example, they don’t know what the meaning and spelling of “indianeconomy” is in
    China will have 128 million internet users this year and Chinese domain name is a must-have for them.
    there are so many news on China these days of course your can think of 1000 more reasons to cheat yourself. but that doesn’t help Indian economy at all. Buddy, do something for India instead of just feel, think and hope here, India is never short of people like you.

    Comment by S. David — March 3, 2006 @ 12:36 am

  2. Minxin Pei raises similar points along with many others on his “Dark Side of China’s Rise” piece in this month’s FP:

    Comment by Sahil — March 3, 2006 @ 1:29 am

  3. i’m not saying China is perfect but i hate the western media hype and the so-called economists who can do nothing but to please the westerners.

    as a chinese who has lived both under the “suppressive communist regime” and in a free country, the truth lies somewhere between western media bias against China and state-controlled CCTV’s propaganda.

    that’s why sometimes I even think Chinese govt makes a point blocking those western web sites. if you want to know what a real China is, go find an Indian guy who has been visited China recently (anywhere in China).

    I can argue with almost every points in the above article but the simple truth is,
    1. China’s per capita GDP is over $1700 and double itself every 7-8 years. most people’s life standard is improving dramatically year after year. (its most important that you can ignore others)
    2. the current govt’s No1 focus is to reduce gaps between rural and urban; (the chinese govt rarely fails whenever they put resourse on it)
    3. any future talks about sth after 20 yrs (or more) is nonsense. both china and india face the same opportunities and challenge, let’s focus on next 5 years;

    Comment by S. David — March 3, 2006 @ 3:37 am

  4. At a fundamental level, comparing China and India seems to me like comparing apples and oranges. These two are so incredibly different. I tried to think of similarities and nothing came to mind other than both being in Asia and having greater than 1G population. We’re ethnically diverse. China is ethnically homogenous, iianm, about 90% of the population is ethnically Han Chinese and has historically “always” been a unified nation. We’ve got over a dozen languages and at least a dozen major scripts, dozens of religions and cusines. China has a uniform language, Mandarin spoken by everyone and a uniform script, simplified chinese which is read by about 90% of the population. The Chinese are almost uniformly nationalistic whereas we tend to be uhm, argumentative? Anyway, I’m sorry, I digress. I feel we must focus on India’s merits and our problems on their own rather than compare ourselves with other nations.

    Comment by Jayakumar — March 19, 2006 @ 3:16 pm

  5. I also had some other quibbles:

    1. You say:
    China’s break-out from the manufacturing-based economy is going to be much more difficult than many seem to imagine. The reason…

    I don’t get your point at least from my limited perspective. The statement seems to imply that a manufacturing based economy is something that one would need to discard in order to grow up into a service economy, ie: “break-out”. I don’t know if that’s what you intended to express so I’m sorry if I am reading more into it than you intended. If anything a more export manufacturing based economy for India, like the one in China ( that by some estimates appears to have created approximately 350 million jobs ), is quite attractive to the majority of Indians. We need to employ not just our Linux kernel hackers, cardiologists, accountants or even call centre workers but also those of us who are part of the barely literate swarming masses. A good old factory job, assembly line job would be a great way to help provide that opportunity for more of us to have a stable home, a satisfied stomach and leisure time for nurturing the next generation properly. I’d rather bring home all our guys and girls slaving in Dubai, etc and an increased export-oriented manufacturing economy seems to be a great way to do that.

    2. The Chinese government is effectively trying to separate off its citizens from the rest of the information universe, under the

    You know, that’s sort of a good thing. Not the fact that the Chinese government has some kind of firewall. No. What I’m saying is a good thing is the fact that something close to 30% of their citizens have some form of access to real broadband. Hence the government desire for control over it. You know, even better than that, 90% of their citizens can _actually_ read. We must absolutely revamp our under-10 education and bring national literacy up to the 90% level before we dare to compare ourselves with other East Asian and South-East Asian nations.

    > on India which has no real rational basis (and a rose coloured filter over

    Hmm, I think we are in agreement that there are many rational reasons for people to be concerned about India’s sustained development. We probably see the severity differently but I think we all know we have problems that need urgent fixing. We all agree about physical issues (energy, transportation, water, environment). We probably also agree about government and legislative inefficiency. We know we have to fix the education problem urgently within the next 5 years or suffer hugely as our population peak starts to hit.

    Comment by Jayakumar — March 19, 2006 @ 3:44 pm

  6. I am not down on india, nor am i up on china
    with that said i have a tough time buyin the arguement that either india or china
    will overtake US.
    With that said my attachment is with india, and i am paying attention to india…

    Comment by Guru Gulab Khatri — March 21, 2006 @ 11:28 am

  7. China has managed an average annual GDP growth rate of 9.2% for the past 25 years (1/4 of a CENTURY). India has only managed to reach 8.1% for 1/4 of a SINGLE YEAR. Of course China is seen through a rose filter. It has proven itself to be a stable growing economy over the years. India hasn’t.

    Comment by Santosh — April 1, 2006 @ 5:30 am

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