The Indian Economy Blog

December 15, 2007

Contrasting Chinese And Indian Oligarchy

Filed under: Basic Questions,China,Growth,Trade — Pragmatic @ 10:00 am

Renowned Australian author and economist Stewart Klegg brings a new angle to the India and China debate. He is scathing in his criticism of the Chinese state apparatus while claiming that there are enormous distortions in the Indian growth model due to a small oligarchy atop the system.

India is often compared with China. But China is country with a highly repressive State apparatus. If you wanted to find historical precursors or parallels to China you’d probably would have to look at the Statist Corporatism of the fascist States that flourished in Europe between the first and second World Wars as well as in the case of Portugal and Spain after the war. Well, not really the case of Portugal and Spain, because they were rather backward, agrarian and clerical, but probably something more like German fascism where you have extremely strong State control of the economy and State control of labour.

Why are Chinese consumer goods flooding the world? For two reasons: one is that even though it’s ostensibly a workers State they can’t form unions; the exploitation is very systematic indeed and, of course, the currency markets are structured in such way as to make Chinese goods cheaper globally. India, by contrast, is a democracy. It’s a very imperfect democracy, but all democracies are. So, the State form is wildly, vastly different. The opportunities for getting wealthy in China through connections to the political elites are very, very deep. To the extent that there is a degree of functioning democracy in India, clearly, it’s oligarchy dominated; we can see this in the familiar dominance of some of the parties.

I think this is an interesting point of contrast with China. If you were to ask sophisticated observers of the business scene, people in business schools generally in Europe or Australasia to name at least one Chinese home-developed brand that was going global, they probably couldn’t do it. But you could do that for India. Corus and Tata are very well known, they are projecting modern India, globally. But I think the important difference is that when the Chinese try to develop own brand manufacturing or marketing they tend to buy up companies which have already got some brand recognition elsewhere. There isn’t a sense that the Chinese firms are going from their domestic place to a global positioning on the back of that domestic base, in India that is different. [Tehelka]

Note: I can’t help but point out the lack of editorial rigour at Tehelka. The gentleman referred to in the story is Stewart Clegg(not Klegg), Research Professor at the University of Technology Sydney, prolific author and public and private sector consultant with expertise in management and organisational learning. [Link]

35 Comments »

  1. [...] Cross-posted at the Indian Economy Blog [...]

    Pingback by Pragmatic Euphony » Blog Archive » Contrasting Chinese and Indian oligarchy — December 15, 2007 @ 10:08 am

  2. “To the extent that there is a degree of functioning democracy in India, clearly, it’s oligarchy dominated; we can see this in the familiar dominance of some of the parties.” Really? To which oligarchy does Mayawati belong? Or Narendra Modi, for that matter?

    Comment by Akhond of Swat — December 16, 2007 @ 9:14 am

  3. @Akhond:

    Oligarchy — A political system governed by a few people

    Comment by Pragmatic — December 16, 2007 @ 4:53 pm

  4. From Wikipedia—Oligarchy (Greek ?????????, Oligarkhía) is a form of government where political power effectively rests with a small elite segment of society (whether distinguished by wealth, family or military powers). The word oligarchy is from the Greek words for “few” (?????? óligon) and “rule” (???? arkho). My question was: surely Mayawati does not belong to a “small elite segment”?

    Comment by Akhond of Swat — December 16, 2007 @ 7:10 pm

  5. @Akhond:

    What is BSP without Mayawati or AIADMK without Jailalitha? Isn’t it a kind of “rule by few”? I agree that it may not be Oligarchy in the sense we understand it historically.
    But let us focus not on the semantics of Clegg’s argument but the deixis of it.

    Comment by Pragmatic — December 16, 2007 @ 8:51 pm

  6. Nothing but a bunch of rehashed talking points here. Regarding the lack of global Chinese breands, well Huawei and Haier come to my mind. I can buy a Haier fridge in every single Best Buy here in the States. Can I buy a Tata car in the US? Hell, can I buy a single consumer product with an Indian brand in the US? The answer is no (Bose doesn’t count).

    The biggest problem with China and India commentaries is that 9 out of 10, the authors have deep and first-hand knowledge in only one of those two countries. This is clearly the case for Mr. Kleggs (sic) here, whose comments about China is but a copy-paste of the WorldNewsDaily (that other beacon of editorial rigor).

    China is a lot more dynamic than you guys think here. To get an idea, perhaps you should read the National Geographic article Moving Mountains published a few months ago.

    Comment by Xinjianger — December 16, 2007 @ 10:56 pm

  7. India is way behind China in virtually every respect.
    It is easy to be carried away by a few Indian successes (such as IT & some overseas acquisitions) but what else is there?

    let’s look at the overall picture:
    POVERTY & MALNUTRITION
    - Half the population is grinding under poverty and malnutrition. The British Independent (14Dec07) said that 80% of the people live on less than 30p a day.
    - On the global hunger index (GHI), India ranks way down at 96 among 119 developing countries included in the report. Even Nepal is four notches higher at 92, Pakistan 88, Myanmar 68, Sri Lanka 69, China 47.

    - Indiatogether.org finds that 1 in 2 Indian rural children under 3 is hungry.

    - Nearly 150,000 Indian farmers committed suicide in the period 1997- 2005, official data show. (P Sainath, ZNet http://www.zmag.org, 12 Nov 07).

    MORTALITY & LITERACY
    INDIA leads the world in the number of women dying in childbirth – 117,000 in 2005.
    This means a maternal mortality ratio of 450 deaths per 100,000 live births. The Pakistan figure is 320, Sri Lanka 58 and China 45 (one tenth of India’s) [R Hensman, 19 Nov 07 http://www.countercurrents.org

    - India has the largest number of illiterates in the world. It ranks 126th out of 177 countries in the Human Development Index (UNDP 2006)

    EDUCATION, Economics, Diplomacy
    India has hardly any quality universities. Tragic.
    A global report a year or two ago put US & UK universties in the top 10. Singapore, Beijing, Hong Kong, Seoul, Tokyo were among the top 20 but not a single Indian university even in the top 200! What does it say about the quality of Indian education?

    China’s high growth rate and wealth are well known. They have 350,000 millionaires and over 100 billionaires. Their Forex has crossed a trillion dollars.

    India is a zero in global forums. It has never launched any diplomatic initiatives. Nobody listens to what India says and it says very little anyway. Indecisive and opportunistic.

    COMPUTER SKILLS
    OK India excels in routine large scale commercial IT application. But when it comes to innovation and creativity, the Chinese can hack into highly secure defense systems of the US and UK. Poor Indians just can’t hack – this needs special skills, routine programming won’t.

    SPACE & MILITARY
    China has already sent spacemen round the earth and their probe is presently orbiting the moon. India is struggling with its GSLV.

    China has intercepted and destroyed a satellite, scaring the hell out of the US. Where is India here?

    China has ample hard war experience. In the very next year after its birth as a republic, it joined the Korean War in 1950 and got the Americans to withdraw from N Korea. The US is quite worried about the Chinese war machine today.
    India has not fought a single war with a comparable enemy. In 1962, China was within 200 miles of Indian territory before Nehru knew what was happening.
    The Pentagon monitored and was unimpressed by the Kargil stand-off. India has lost over 70 MIGs (seen Rang de Basanti?) and 15 Sea Harriers without fighting any war. How do they do it?

    INFRASTRUCTURE & MOVIES
    India’s urban condition is awful – grime and squalor everywhere. Poor drainage & sanitation. China is relatively spotless.
    Chinese movies are well respected. Bollywood tends to be laughed at. Technically they are fine but thematically a joke. And why so many English words interspersed in dialogue? Is Hindi that deficient in vocabulary?

    This is not to denigrate India for the heck of it – but we must see the grim reality. And is India really a democracy – what sort when criminals can become MPs? A few top CEOs may make us feel good but there is a long, long way to go on all fronts.

    Comment by Edsa — December 17, 2007 @ 12:05 am

  8. Talking about Chinese brand, I think they are building it, and fast. how many people know Haier or Lenovo couple of years ago?

    in last 3 months, see how many big Chinse company has filed IPO and becoming well known gradually? Alibaba, the Chinese Internet company, are now a 20 billion dollar company now. ICBC, china’s leading bank, has surpassed CitiBank Group and becomes te largest in the world. PetroChina, the state owned Chinese oil company, its market value is almost the same with the sum whole market value of Mumbai Sensex!

    After 5 years, let’s see how many Chinese companies are well known brands.

    Comment by sen — December 17, 2007 @ 12:47 am

  9. Substandard analysis.

    He attacks China’s political policies and then goes on to advocate SEZs (popular all over the world for limiting the rights of workers though I am not sure how India is going about on this front.)

    He identifies the problem of the status quo whereby there is a stark unequal distribution of resources (especially agricultural land). He comes close to a good solution and then rejects it out of hand. He doesn’t offer any solution of his own either. So what was the point? Making a comment? Enumerating thoughts related to the issue? Like we didn’t already know about them.

    Finally, what’s with the China-obsession? I never see the Chinese being obsessed with India.

    Comment by HmmBut — December 17, 2007 @ 1:01 am

  10. Another pointless China/India debate. Following article by Times of India is a much better read:

    China offers its help in Small Hydro Projects to India
    16 Dec 2007,

    Excerpt: DEHRA DUN: China, which has taken a giant leap in the eco-friendly small hydro-projects on Sunday offered to help India to increase its power generation in Small Hydro Projects (SHPs) by sharing its expertise in the flied.

    Ahead of its meeting on Monday with top Indian officials in New Delhi, a Chinese delegation headed by Prof Tong Jian Dong, Director-General of Hang Zhon-based International Network on Small Hydro Power (IN-SHP) visited Uttarakhand to see the technology being used in small hydel projects and talked to stakeholders in this regard.

    After visiting the city-based headquarters of HESCO (Himalayan Environmental Studies and Conservation Organisation), which has developed an expertise in upgrading traditional watermills, Prof Tong told reporters that China wanted to help India to increase its power generation in hydro power particularly in small projects which are eco-friendly also.

    “We have the best power policy and we have different plans for different regions so as to harness the maximum water resources,” said Prof Tong.

    He also said China, which produces 45,000 MW of power in small hydro, was ready to transfer its technology in water turbine pumps which not only generate power but also help in taking the water back to the hill tops.

    Prof Tong said he would meet Principal Scientific Adviser Dr R Chindambram in New Delhi tomorrow and share the expertise of Chinese technology in small hydro power projects.

    Comment by thecupgr — December 17, 2007 @ 8:27 am

  11. Recommend readers of this board to read Jim Rogers’s new book about investment in China and his advices to America kids:

    http://www.usatoday.com/money/books/2007-12-16-jim-rogers-china_N.htm?csp=34

    Comment by thecupgr — December 17, 2007 @ 8:40 am

  12. China is great, India is in a squalor. The statistics are there for all to see. But do these statistics convey the complete picture.

    Not a word about China’s repressive state apparatus, democracy, media, politics, society, workers, rural-urban divide et al from anyone. Forget about concepts like liberty and freedom — who needs them when the statistics are alright (and some of these may have been systematically fudged). Is economics operating in a vacuum, unconnected to the society and polity of the state?

    The reason I posted Stewart Clegg’s views is because they bring a different take to what we hear everyday. Let us learn to hear patiently, if not appreciate, contrarian views on this blog.

    Comment by Pragmatic — December 17, 2007 @ 12:21 pm

  13. Pragmatic wrote:

    The reason I posted Stewart Clegg’s views is because they bring a different take to what we hear everyday. Let us learn to hear patiently, if not appreciate, contrarian views on this blog.

    Pragmatic, you got it completely backwards. Stewart Klegg’s and your views bring nothing new to the table. They are the same blanket statments that are being repeated in US and India media day by day. China is growing faster but it is evil, India is growing slower but it is good. A contrarian view would be that China’s “repressive state apparatus” really isn’t that much more repressive than India’s democracy for the hundreds of millions of peasants and Dalits in both countries. Lofty “concepts of liberty and freedom” mean absolutely nothing to me when 40% of your adult population and 30% of your youth population are illiterate and cannot write their own names. Illiteracy is by far the number one repressor.

    Comment by Xinjianger — December 17, 2007 @ 9:17 pm

  14. If you can’t read, you don’t need censorship either.

    Comment by Xinjianger — December 17, 2007 @ 9:25 pm

  15. Xinjianger:

    I am not one for a slanging match. China has its own drawbacks; India its own. Neither is perfect and we can argue about relative merits (or demerits) of each nation till the cows come home. You are entitled to your views, as much as I am to mine.
    As an aside, “contrarian” depends on what you read or hear usually. I like to focus on the positive aspects of Chinese growth usually and thus this was a contrarian view. For those who always see only thorns in a rose plant, obviously this view wasn’t contrarian.

    Comment by Pragmatic — December 17, 2007 @ 10:43 pm

  16. It’s only been the major talking point for the last 2 years. You must’ve missed it. Or perhaps you don’t read Indian media.

    Now I will address your comments specifically. I want to say first that your comments are full of platitudes, severely lacking precision, substance and context. You wrote:

    China’s repressive state apparatus, democracy, media, politics, society, workers, rural-urban divide et al from anyone. Forget about concepts like liberty and freedom — who needs them when the statistics are alright (and some of these may have been systematically fudged). Is economics operating in a vacuum, unconnected to the society and polity of the state?

    The repressive nature of China’s “state apparatus” on its workers and its populace in general is greatly exaggerated. The main arm of China’s state control is actually in compulsory purchase of land, land availability for infrastructure, land availability for development, and to some extent in directive lending. This is where the majority of dissent and riots come from in China. Not religion, not politics. This is a view echoed by some of the leading editors of the Economist, such as Bill Emmott. As the middle class grows, this area of state control will become more and more transparent and predictable.

    The rural-urban divide is more so a regional divide. The central Chinese provinces are mostly rural and their rapid urbanization will solve the rural-urban divide on its own. Such extent of urbanization can only take place with land distribution and zoning policies stated in the previous paragraph.

    Lastly, I want to say society and polity doesn’t exist in a vacuum either without economic considerations. China is a poor country still, poor countries develop their own unique institutions that best suit them on their path toward modernization, social equality and personal liberty. India has the largest amount of child slave labor in the world today. When revelations of child slave labor mines and factories in China were broadcast across the country, the Chinese in China donated millions of yuan to these children and the factories were promptly shut down. What is India and its democracy doing about India’s child slavery?

    Comment by Xinjianger — December 17, 2007 @ 11:44 pm

  17. Its a very substandard analysis. While India has definitely made progress, we still have tons of issues. Let’s not forget that we are still a 3rd world country, and its probably going to take us another 5 decades to just get to a 2nd world status.

    Having said I definitely prefer our chaotic democracy over communism, but wish I wasn’t so chaotic.

    Comment by vj — December 18, 2007 @ 5:59 am

  18. Xianjianger, there is no need to be attacking. A lot of people in the West have stopped using the accusatory tone towards China. Geopolitical events over the past few years have destroyed the myth of a free West. Indians have some delusional tendencies these days. It might be the birth pangs of a take-off in the economy or perhaps an ostrich-like inability to deal with current problem. I am really hoping it is the former.

    Both India and China have deep problems, started off at different levels, took different political and economic courses. Historically neither country has been extremely violent towards outsiders. On the contrary both have been quite inward-looking and defensive on every front. So there is nothing for the world to worry about. I agree with thecupgr’s sentiments. Lets work together and make a better world for our own people than fall for the anxieties of a small minority in the West.

    Comment by HmmBut — December 18, 2007 @ 6:37 am

  19. China is spoken 10 times as much as India in any publication. Most of the comparison between India and China specifies only three things – English language proficiency, Democracy and Demographic dividends. And all of them are tricky and India might not be strong in any of the three, compareed to all hype. But there are other things to take into comparison.

    Looking at the overall numbers, China’s GDP measure both in current exchange and PPP is only between 2 to 3 times as big as India. And given that it has 30% more population, 3 times more area, 13 year headstart in reforms and a history of never ever been ruled long by aliens, it is not that impressive. It is ok. In fact if India had slightly started early by around 80 and increased the growth rate by 2% in that decade, the GDP numbers wont be too different.

    And Indian numbers were achieved with just 65% literacy and a miniscule share of world trade and investment. Given such a low baseline, there is an enormous headroom for India. Even If we manage to increase literacy by 10% every 5 years, we could still have 10% growth rate irrespective of what happens in global economy. And this is not such an impossible task given the technology and resources we have. One good example to see is the rise of telecom. 6 years back we had probably 1 to 2 % teledensity and now we are adding that many every month. So, we can attack our social problems like illiteracy with tools that no other advanced nation had the benefit of. And miniscule upper middle class could multiple many times over the next decade leading to an exponential growth in many other sectors.

    And if the last 2 years is any indication, the share of India in world trade and investment has only one direction to move. And India has a lot more cards kept close to its chest. Most of the bigger sectors are still unopened and only the soup has come out so far. The meal is still in the kitchen. Retail, transporation, banking, agriculture education and dozens of major sectors are still locked and as they keep getting out of state control, growth could accelerate and may more than compensate for any loss in US slowdown or even if IT sector dies.

    And more importantly India is still under the radar and treated as innocent observer. China with a percapita income 3 times less than a poor European country – Romania, is under attack from around the world, accused with tampering the world economy. No one has taken note of the threat India could possess. All the extremities – Iran & Israel, US & Russia, China & Japan have started enormous startegic partnerships with India and none of the major nations nowadays even criticize India openly.

    In comparison, China has already started to face resistance in too many quarters and could threaten its future growth. It has done the simple things well – made its people literate and provide basic health care, but how about future challenges as a first world country. Given its current growth pattern, if China has to grow even to the economic level of Turkey, it has to completely take over world trade and investment and to keep yuan week it has buy the entire debt of whole world, that looks a tough task. So, it has to find new ways to grow and the old ways of low cost production, high foreign investment and bulging exports but may not scale to China’s ambitions.

    So, China is charting an untravelled territory and faces with questions on how sustainable its growth will be, given it has maxed out on most items. How many more toys can it produce or how much more foreign direct investment will get. China is definitely ahead of India in most aspects, but can keep it that way?

    Comment by Balaji Viswanathan — December 19, 2007 @ 11:43 am

  20. If India had started in the 80s? Well that is the problem. We are always late and happy to console ourselves with ifs and buts rather than actually doing anything. We are happy to import ideas wholesale than generate any of our own. A lot of Indians have a complex for aspiring to emulate with West rather than simply succeed on our own terms and build a new path of our own while doing that.

    China is facing resistance because it is one of the truly sovereign non-western countries in the world whose government structure is not penetrated by foreign elements. China means to win.

    Many years back the transcript of a conversation between Nixon and Mao was released. One of their comments about was censored but from reading the flow it was obvious that what they said was that Indians lack the fire in the belly. Both agreed to it and laughed. With shame, I have to say that we are proving them right.

    Comment by HmmBut — December 20, 2007 @ 4:47 am

  21. India – China debates always seem to degenerate into a predictable stalemate because of the confusion involved in comparing two vastly different Giga countries and at the same time comparing two vastly different (almost opposite extreme) types of political forms of governance each have adopted. One is not sure when an argument favorable to one country is made, if that speaks for the country itself or for it’s political form or a combination of the two.

    It is my rather simplistic view that in the post Colonial/ post World War II era, India, given its poverty, deindustrialization, peculiar post-colonial identity and its mind blowing demographic diversity, under any other form of governance other than the (very flawed) democracy it has today would not have survived as we know it today. It would have, more likely than not, disintegrated into several failed and dysfunctional state lets perhaps in conflict with each other. Imagine Kerela and West Bengal as independent states (unreformed communist), or Tamil Nadu (Dravida fascist) or Bihar and UP (pure anarchies). And as a consequence the whole region would have been a whole lot poorer, weaker and inconsequential in the positive sense of the word (not unlike Pakistan, which is not inconsequential for the wrong reasons)

    Contrasting this, on the other hand, given modern China’s cultural identity and remarkable demographic homogeneity, China could very well have taken a less repressive and more democratic (or democratizing) route to its development without having had to jeopardize its modernization and improvement of living standards of its people or its integrity as a Giga nation state over the long run. This more liberal route could have perhaps even helped her avoid the colossal, tragic and costly mistakes of the Mao-Communist period.

    In short, in the grand scheme of things, India has done better than expected with what she was left with at the beginning of this era and her future looks better than it ever looked and China has done rather more poorly than expected, that even today its political future is still clouded and has still not escaped being lumped with India in discussions like this! That is ironic considering that India was so often ignominiously lumped with Pakistan to the chagrin of India’s elite.

    Comment by nirm — December 23, 2007 @ 6:10 am

  22. China was also under the colonial yoke. Its condition was just as bad with parts of the country completely out of its control and ruled by foreign governments. On top of it, its people were being destroyed with opium flooded into China by western governments.

    Just like Nehru, Mao played a role in freeing and uniting what was a disparate country. China was not exactly a nation-state before. It was a kingdom and later a puppet nation. Of course mistakes were made by these leaders. Perhaps both countries are better for that.

    Also, don’t disparage Kerala, West Bengal, Bihar etc. History could have gone any which way. The first two were not exactly “Communist” and the first one is still not. There have always been anti-communist forces in the two states. Don’t post ignorant screeds. Post about what you know.

    Comment by HmmBut — December 23, 2007 @ 10:11 pm

  23. Mr. HummBug,

    China was not under “colonial yoke” as any elementary school text book would tell you. It was not completely taken over and subjugated for 250+ years (not to include another 800+ years of Muslim domination and the resulting enfeeblement prior to that) and ruled by remote control and its psyche so utterly dominated as you can still see the vestiges of it in India. The gist of my post was that China was in a better position than India at that point in time when both countries embarked on their rebuilding after centuries of decline. Remarkably homogeneous Chinese society was and is not so sharply divided vertically (caste), horizontally (distinct linguistic regions) and diagonally (major, often incompatible religious groups). This relatively better position gave China more leeway than India in its choice of paths before it, before of course, History intervened. . If you deny this then you are suffer from cognitive dissonance that is beyond cure. Considering all this India gets a c+ and China a c-, to simplify it to elementary school terms for you

    Yes, a disintegrated India could have gone either way, UP and Bihar (often referred to as the 4th world) on their own would have transformed into Asian Tigers when in today’s “booming” India they sport a blazing economic growth rate that manages to barely keep up with their population growth rate. Considering the global Sino-Soviet Backed Communist expansion during the Cold War, Kerela and West Bengal would have emerged as stalwart “non-aligned” powers facing down any foreign communist interference, just like they faced down the British earlier. Punjab and Kashmir would have emerged as a beacon for religious tolerance and secularism. History can go every which way it can to support your world view.

    Comment by nirm — December 24, 2007 @ 1:56 am

  24. Yes history can go any which way with our imagination being the only limit. But don’t talk about states without knowing their inherent politics, history and the action of the central government that created the conditions that are present today.

    Kerala and West Bengal might have turned into another Vietnam or another Taiwan under American hegemony. Not very non-aligned in that condition either isn’t it? As for Bihar and UP you need find out how they were discriminated against in some important respects that damaged economies already crippled by longest British rule. I will not expand on your other fantasies. There is limit to ranting.

    China is far far ahead of India and still you want to console yourself by handing out grades. Be my guest. Yes, China was deeply affected by colonialism. Just not the kind that you can understand. Too bad.

    Comment by HmmBut — December 24, 2007 @ 8:33 am

  25. This discussion seems to get too hot to sound like a healthy debate !
    I think there is no point in arguing who could have done better in the past, unless we are doing so to seek lessons learned for future use.

    Anyway, some of the points above are well taken -

    “It would have, more likely than not, disintegrated into several failed and dysfunctional state lets …”
    Indian politicians had to fight a lot to mitigate this real risk, in early days after independence till last decade (Punjab, Kashmir etc..)
    and still continue today. Remember economic development was only one of the agenda items of old politicians, if you go back to 60s and 70s. And remember the old Hindi movies which depicts Indian culture – money is evil, stay away from it.

    I would agree Homogeneous Society like China automatically eliminates lots of social problems like in India, so everybody can focus with left over energy on developmental activities if there are opportunities. So it remains a biggest natural addvantage to China.

    I do not agree with this though -
    ” China could very well have taken a less repressive and more democratic (or democratizing) route to its development without having had to jeopardize its modernization…”
    In my opinion, there are cultural reasons, in addition to literacy and socio-economic level of people, why a repressive path might sometimes be better than “Democracy” like in India. Of course there are prices to pay. Also if we had data on wealth distribution and benefits of economic development to society, my wild guess is China would compare far better to India ! This is critical in the long run.

    The fact remains though, that as of today, China is more rich than India, the world talks about it more and sees it as a future superpower, that its got 3 times more land than India, that the world has come to depend on Chinese goods, and that China had better positioned itself to absorb foreign investment and create long term sustainable businesses like manufacturing, instead of jumping directly into service industry !

    Cheers !!

    Comment by Shyam Tambi — January 2, 2008 @ 2:49 am

  26. nirm wrote:

    China was not under “colonial yoke” as any elementary school text book would tell you. It was not completely taken over and subjugated for 250+ years. Remarkably homogeneous Chinese society was and is not so sharply divided vertically (caste), horizontally (distinct linguistic regions) and diagonally (major, often incompatible religious groups).

    A lot of ignorance above. China was under subjugation of the Manchus since the 1600s. China was also just as fractured and regionalist as India was before WWII. China also had severe linguistic differences (the standard Chinese language was not even created until the 20th century), and distinct class and religious differences. You base your entire argument on the MYTH that China prior to WWII was somehow more homogenous than India. It was not. China’s modern-day homogeneity is a result of Chiang Kai-shek’s Northern Expedition and Mao Zedong’s founding of the People’s Republic. The reason Mao’s face is still on Tiananmen Square and on China’s paper currency is simply this: he founded the country we know today as China. Before Mao, China was a very different country (if you can even call it that, more like a “civilization”).

    Comment by Xinjianger — January 8, 2008 @ 10:53 pm

  27. I would like to correct some figures regarding presented by a few members here. I love the format adopted by Edsa, so i would follow it.

    POVERTY AND MALNUTRITION

    - 27.5 % ie. about one-fourth of people live below the poverty line in India, not half.
    Ref: http://en.wikipedia.org/wiki/Poverty_in_India
    - I don’t exactly know what is meant by 30p (pounds/pence/paisa..?) but official but 75 % of people earn above 0.40 US$ a day and that, mind you, just as the figure quoted by The British Independent is not PPP adjusted.
    - Per Capita Income using the PPP method is US$ 2,880 whereas China’s is US$ 4,990. Using the Atlas method the figures stand at US$ 530 and US$ 1,100 respectively. Ref: http://www.success-and-culture.net/articles/percapitaincome.shtml

    LITERACY

    - India has the highest no of illiterates in the world. But even at 60.3 % adult literacy rate, it has the second highest no of literates in the world. Moreover, as the medium of instruction is English, I believe they have a more global perspective.
    - Education is however not just about literacy rates. India has the second highest circulation of dailies at 78.7m and China has 96.6m ; Japan has 69.7m; the US has 53.3m; and Germany has 21.5m. India has around 46,000 newspapers in circulation in over 100 different languages (around 20,000 in Hindi and 7,500 in English). China has above 2,200 newspapers in circulation in all languages combined.
    Ref: http://en.wikipedia.org/wiki/Mass_media_in_India, http://en.wikipedia.org/wiki/Chinese_media
    For such an illiterate nation as it is projected to be, the intellectual activity is disproportionately high.

    EDUCATION, ECONOMICS, DIPLOMACY

    - India has the IITs. Walk into the Silicon Valley, the hotbed of innovation, and you will meet plenty of IITians. Sadly, there are very few IITs, and they aren’t universities. Yours truly is privileged to be in one. Quality higher education is in short supply. But now that India has hard cash to spend on univs, we will pretty soon find some Indian names in the global list.

    - Indian growth rate is also equally well known last years data stands at 9.4 % vs China’s 10.5 %. For a nation that was 10-15 yrs late in initiating reforms and has been inconsistent with its pace, I think the performance is quite a match.

    - The forex reserve stands at a solid US$ 270b. The money is pouring in at US$ 250b per year (thats right, its not a typing mistake) and as this article notes, the amazingly tame inflation rate is making it a safer haven than China for foreign money, so much so that the Central Bank (RBI) is actually taking steps to sterilize the inflow. India has a problem of plenty. Ref: http://indianeconomy.org/2007/12/21/the-rise-and-rise-of-the-rupee-or-how-to-screech-a-galloping-elephant-to-a-halt-atop-of-a-dollar-bill/

    - I don’t know from where that impressive no of 100 billionaires came from but as on March, 2007, Forbes lists India third in terms of number of US Dollar billionaires.
    Ref: http://en.wikipedia.org/wiki/List_of_countries_by_the_number_of_billionaires
    India has 54, preceded by 55 of Germany and the US at 432. China, though, is not far behind at the 10th position with 20 billionaires. India also has 100,000 millionaires and the no is growing at 14 % compared to China’s 8 %. Moreover, there would be at least three Indians in the world’s Top 5 Richest individuals, if not the top 3, after the Reliance Power mega IPO lists on Asia’s oldest stock exchange (BSE) – the Ambani brothers and L.N. Mittal.

    - India is currently leading the developing countries in the negotiations at the WTO, the world’s largest trading body, along with Brazil. So it is not exactly a zero. Let us see whether it can become a hero like China one day.

    IT ie NEW ECONOMY

    - I don’t think it would be prudent of any rational human being to dismiss one nation’s significant and well acknowledged expertise in any field as “regular” and claim superiority on the basis of a one-off event of a system hack. There are great no of Indians and Chinese working in NASA and for US military projects. Its just matter of calling them home. Till then the regular guys will keep the corporations running.

    The point is that China has huge lead in manufacturing and many of its brands are visible, but India has an equally good lead in services but its always behind the screen. Next time you go to your bank just ask who provides them the IT logistics.

    SPACE

    - India is sending a mission to Moon this year (2008). The mission is called Chandrayan-I and it had on-track plans to put a man on moon by 2015 which was sadly thwarted by the political sensitivity of the expenditure required.

    - India has entered the global market for commercial satellite launches by placing 2 Israeli and 1 Indonesian satellite in orbit. It is also designing a space shuttle for placing satellites into orbit which would dramatically reduce the costs.

    LANGUAGE AND MOVIES

    - No, Hindi is not short of words. It doesn’t have 40,000 different sounds like Mandarin but whatever it has is enough to express all human expressions. It derives its grammar and vocab from Sanskrit. For the uninitiated, here is a quote from what Sir William Jones, said to the Asiatic Society on February 2, 1786:

    “The Sanskrit language, whatever be its antiquity, is of a wonderful structure; more perfect than the Greek, more copious than the Latin, and more exquisitely refined than either, yet bearing to both of them a stronger affinity, both in the roots of verbs and in the forms of grammar, than could possibly have been produced by accident; so strong, indeed, that no philologer could examine them all three, without believing them to have sprung from some common source, which, perhaps, no longer exists.”

    We intersperse Hindi with English just as the English intersperse their language with Latin, Greek, French, Chinese, Japanese, Spanish, Italian, German, Afrikaan and Hindi.

    Comment by Ramanuj Lal — January 10, 2008 @ 3:20 am

  28. Nice work Ramanuj Lal, good statistics thanks a lot never knew this much.

    Comment by Harshavardhana — April 18, 2008 @ 1:35 pm

  29. Maybe one should have a look and articles from the International Monetary Fund and the World Bank. None of them touches on issues of repressive government and lack of enterprenuership. This might shed some light on the significance of those factors. In my opinion, India just misses out on a quick start. Their democratic(Western model) political system promises them nothing over China be it in the short-term or the long-run. A subtle political reform is going at this very moment. The Chinese leadership has been experimenting with better and more democratic systems in certain areas, to find the optimal one for the Chinese society. And currently, an American-like democracy is out of the question, the reasons are as follow:

    1. The experiments have shown that peasants tend to vote for those who offer them some short-run benefit even cash. In a hypothetical presidential election, one cannot stop them form doing so in the form of massive tax-cuts and over-generous welfare benefis.

    2. These kind of people might be too uneducated to grasp the implications of such blunders, or

    3. Even if they do, they may not have any other option due to poverty or extreme greed.

    From these, one can conclude that as economic development progresses, these problems will be solved and a more democratic government will become more feasible.

    Comment by hboGYT(PRC) — June 26, 2008 @ 4:14 pm

  30. Comparing China and India is comparing starkly unequal things.

    China is a real nation, always responsible for itself in history and with a very long recorded history.

    India is a Hindu cultural area that was pulled together into one country by the whim of the British East India Company. India has little historical writing other than what foreigners said about it.

    No comparison is possible there in terms of strengh of national consciousness. China has it, immensely. India’s is far far vaguer.

    China fought the mighty Japanese Empire to a standstill in World War Two. It fought the incredibly powerful USA to a standstill in Korea in the 1950s.

    India has barely been able to keep half of Kashmir out of the hands of a far smaller Pakistan.

    China has done immense things since 1949 to rescue its population from disease, hunger and illiteracy – despite a huge famine in the 1950s as a result of Mao’s lunatic economic experiments, the average Chinese for most of these decades has eaten much better than the average Indian.

    So India is no match for China.

    China faces immense environmental problems now, but so does India, and with China one can be much more sure it can cope.

    India is doomed to massive Hindu-Muslim bloodshed and maoist insurgencies. It’s future cannot be good.

    India should be compared to countries in its cultural area, like Bangladesh and Pakistan – not China.

    India is no match for China.

    Comment by Ganpat Ram — June 27, 2008 @ 8:15 pm

  31. All asian countries from the middle east to east asia have made tremendous progress in less than 20 years. india is the sick man of asia and cannot progress far even after 60 years.

    Oligarchy or not, China gets things done in building the nation. What have indians done for their people? Very little.

    Comment by Wu — July 6, 2008 @ 12:36 am

  32. China faces investment led recession while indiaq faces a consumer led recession. later is inflationaery while the formeer is deflationary. all asian countries are doomed to death in an oil crisis maybe china will get hit one year later.

    Comment by satish — July 6, 2008 @ 12:33 pm

  33. remarkable difference between indian and chinese commenters. while indian commenters can look from both ways, self critical, you dont see that in chinese ppl. this is a common tendency i have seen always in chinese ppl. they became rich by american FDI, and its still american money, the day when america pulls it off it will all fall like house of cards, unlike india where the growth is from within, not cosmetic growth. and at creative level china is still living at the bottom, just see most commenters robotic answers. i wonder whether these ppl are govt sponsored communist drones.

    Comment by shanku — August 26, 2008 @ 11:11 am

  34. China vs. India!
    Both Chinese and Indian people are intelligent, hardworking, appreciative of spiritual values and have a very strong love of family.
    However, China has always defined itself as a unitary Empire with ‘warring states’ periods or intereggnums of Warlordism seen as an aberration. India, by contrast,does not really have a concept of Empire- it has a notion of Ashvamedha- a show of force, coupled with moral and spiritual initiatives- which establishes a ‘Chakravatin’ who is primus inter pares amongst other kings. The British Raj was also an ‘Empire’ of this type. True, periodically, there have been genuine Emperors in the Chinese or Roman sense, who have attempted to enforce both dominance and hegemony. However, such efforts tended to be ill fated and short lived. The fact is, throughout India, there has been a remarkable continuity and stability in elite dominance. A foreign invasion adds a layer, nothing more, which only secures its long term position by inter-marriage or transmutation into a purely moral or spiritual authority.
    Chinese Emperors have generally made spectacularly bad economic judgements. India often enjoyed higher per capita income- though lagging behind in productivity and technological innovation- precicely because power was less centralised.
    One reason why India is not and can’t be an Empire- i.e why India is doomed to be weak with respect to China- is that the Caste System undercuts the centralisation of power. In China, the Emperor could break the aristocracy by mobilising all his subjects for war and other purposes. India made the decision to restrict the job of fighting to mercenaries with other occupational groups being left unmolested. The Chinese were the earliest to break with feudalism. Except in certain districts, Mandarin (the word is supposed to derive from Skt. ‘Mantrin’)families could not turn into the sort of ‘Deshmukh’ fuedal land owning class we are familiar with in India. However, the reduction of social stratification required to strengthen the Emperor also weakened the merchant class. Ultimately, this is why the Chinese lost out to the limited monarchies of Western Europe where the burghers evolved into a powerful bourgeoisie who were able to revolutionise the sciences and arts. In India, the merchant class were gaining in power, but the British instead of giving them a leg up, ultimately coralled them into a parasitic role. The British Empire is, of course, still alive and well- which is why I’m writing this in English- but it is nothing more than a meta caste, a specific caste of castes, and therefore not really an Empire but a sort of abstract jati dharma.
    Why is India behind China? The answer is we are a low productivity nation- always have been, always will be. Why? Because the State never used coercion to make us more productive. Even if the country was being invaded by genocidal nutters, no ‘Emperor’- whether Hindu, Muslim or British- even to save his own neck, considered mobilising the whole population for war. Instead mercenaries were used. True, during war-time, impressment was not entirely voluntary, but the fact remains no Indian ‘Emperor’ has mobilised the full resources of the country for any purpose what so ever. In this sense, India has never existed as an Empire. China and Europe have.
    Why can’t productivity rise on its own without coercion by the state? Surely people will raise their own productivity simply to earn more money for themselves? Or is this the fault of the evil capitalists who won’t motivate the workers, or the evil Trade Unions who won’t allow lazy good for nothings to be sacked, or the fault of Mamta Bannerjee, or ‘Brahminical’ bias to Education, or ‘India very hot’, or Muslims eating garlic, or (Katherine Mayo’s explanation) excessive masturbation, or what?
    The answer, I’m afraid is complicated. A very boring and confusing topic in Economics relating to Capital theory and ‘choice of technique’ shows that (if you are still awake) where labour inputs are highly variable you are going to get a mixed regime in which returns to capital at the margin are low or negative. Entrepreneurialism, in this context, turns in on itself, feasts on its own carcass, adding to the problem by creating an even greater diversity of micro-ecologies.
    The paradox that the caste system is both a division of labour and a system that prevents specialisation and gains from trade is reflected in the paradox that India exists only because an Indian Empire is impossible.
    Can India turn itself around? Sure. By coercion. Compulsort schooling, compulsory national service- everything every other successful country has done. Will India do it? Are you kidding? There’s a reason we should stick with what we know- countries that start mobilising all their resources tend to lose between 10 and 20 percent of their populations to wars and rebellions. They make catastrophic economic mistakes. Guys, it could happen to you and me.
    Suddenly,India don’t look so bad. How many Indian families- okay, South Indian families- have lost a family member to wars or riots or political purges over the last one hundred years? The answer is very few. The Chinese, Europeans, Japanese etc have all paid a far higher price.

    Comment by vivek iyer — September 8, 2008 @ 6:28 am

  35. Correction:
    1- Mandarin was the word used by Portuguese to refer to Chinese language. Chinese have a different word for their language.
    2- There was a standard Chinese written language for centuries, which was widely used throughout the empire. Their was only some simplifications done in Mao’s time.
    3- Chinese empire and nation existed for long stretches of time and their existence was accepted as natural and good. Indian emperors had as much legitimacy beyond their hereditory borders as the British empire or the Nazi empire.

    Comment by Correction — January 9, 2009 @ 11:01 am

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