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  • India and China

    Posted by Chicago Boyz Archive on August 19th, 2006 (All posts by )

    This comparison is almost becoming a clich�. But, still, it is an interesting one and potentially enlightening, if handled properly.

    This book Asia’s Giants: Comparing China and India got a good review in the current Foreign Affairs, which came in the mail today.

    Palgrave’s catalog page: says this:

    This edited volume reconsiders the conventional wisdom, which argues that comparative performance (in economic, social, political, as well as diplomatic arenas) of China has been superior to that of India. The book brings together ‘new paradigms’ for evaluating the comparative performance of two countries. Essays show that if not outright wrong, conventional wisdom has proven to be overly simplified. The book brings out the complexity and richness of the India-China comparison.

    Any challenge to this conventional wisdom is greatly appreciated. The FA review says the issue of China’s unreliable statistics is addressed, and its about time, too!

    “Complexity and richness” are nice buzzwords. I am waiting for someone to make the point that Jim Bennett has repeatedly made, e.g. here:

    There�s a link between strength of civil society and civil society institutions and entrepreneurism and prosperity. If this is true at all, and it just seems to be overwhelmingly true, sooner or later India is going to overtake China in the nature and pace of its economic development, and I think shortly after it overtakes it, it�s going to far outstrip it.

    I think that India�the rise of India is going to be one of the big stories of the 21st century and the relative problems of China, once they get another two or three decades down the road, is going to be another big story and one that a lot of people aren�t expecting. All you�re�people are mesmerized by the growth curves in China right now. They see pictures of the big skyscrapers in Pudong and, you know, they�re extremely impressed by this, but they�re not looking the fact that China is on the wrong side of a huge transition problem.

    If you look at these transition problems in small countries like Taiwan and South Korea, which have very similar social structures, this was a big crisis. It was a huge crisis in Japan, which is not so similar, but had some similar issues, and it led to a, you know, major world war.

    China�s got big problems. I hope they work through them peacefully, without an enormous amount of disruptions; but, you know, I�m not going to lay odds on that it�s anything like 80 percent chance of success there. I think they�ve got a 50-50 chance of getting through their democratic transition without major problems and disruption, which are going to be I think the big international crisis of the 2030 or 2040.

    China is, as of now, still on the wrong side of a politico-legal transition that India has already made over the course of two centuries. Leaping that chasm is a problem that Japan and Korea, for example, have both made, and not without much turmoil. China will probably not be able to “scale up Singapore” and have developmental autocracy forever. The predation and corruption in this system will choke off growth unless the Chinese move ahead with real reforms at some point, that actually cede power from the gang that runs the place now. China has some major challenges ahead and everybody is just whistling and looking the other way. Meanwhile, India has hidden strengths which will, I hope, surprise the world.

     

    58 Responses to “India and China”

    1. Eric Says:

      If India’s system is so stable and great, how come they have never been able to overtake China in the past century? It’s got even worse in the past 15 years that China’s per capita income is now more than double India’s. Right now, I don’t see a thread of evidence India will overtake China. All this India overtaking China theory seems just anti-China wishful thinking. In reality, democracy has little to do with economy (so many democratic developing countries in the world, but which one actually became developed country because of democracy?) I bet you don’t know much about corruption in India, because it’s never reported in Western media. I would like to see a demoratic China, but even not, I will still bet my money on China, until India doubles its per capta income, but China will probably tripple theirs by then.

    2. Eric Says:

      Want to have a taste of how Indians think about their own system? Check this out:
      http://www.ibnlive.com/f1/mumbai-on-fast-lane-to-shanghai/18983/comments.html#

    3. Lex Says:

      “I bet you don’t know much about corruption in India”

      D’oh. You lose.

      This is one of the things I hate about blogging, some guy taking this pointlessly offensive tone, when he could have made the same point better being polite.

      I thought about deleting eric’s little tirade, but I decided I’d use this as a teaching moment about how not to leave comments on a blog.

    4. Lex Says:

      “how Indians think about their own system”

      All billion of them? How monolithic of them.

      Well, at least he has provided a link to something. That’s progress.

    5. Lex Says:

      Anyway, the interesting question is how much progress India has made on corruption, as well as other issues, in recent years. Quite a bit from what I’m reading. Is there still a long way to go? Sure, of course. Does having a free press help to put a spotlight on corruption? Sure. Is there lots of corruption in China? Sure.

      I don’t have anti-China wishful thinking. As a matter of fact, to the contrary, I am scared out of my wits at what will happen if China has some kind of serious disaster. I am holding my breath that China will continue to have peaceful growth. China going off the rails is the last thing I want.

    6. veryretired Says:

      An economics professor at the Univ. of Minnesota wrote a book a few years ago about the basics of economic development. There were seven common factors, among them, transparency in accounting, esp. banking, and a functioning legal system.

      China has neither, and India has the start of both. The Chinese people are industrious and worthy of much better than their political system will allow them to be.

      For all their problems, India has a less monolithic power structure, and a somewhat more open media/educational system to allow some intellectual debate.

      This is not some kind of horse race where winner takes all. Both countries have a long and difficult process ahead of them as they try to dismantle two horrendously statist, over beaurocratized, and, yes, corrupt impediments in the guise of governments.

      It would be best for the world if both were eminently successful in joining the 21st century as more open, free societies, based on more open, free market oriented economies.

      The marxists were wrong. Success does not come from feeding off the corpses of the vanquished, but partnerships among the productive living.

      Both countries offer enormous markets for just the kinds of middle class products and services the US excels in providing, as well as the other nations in the world economy.

      Everyone, with a few maniacal exceptions, wants a better life for themselves and their families. How to achieve that end has been studied and studied, and the answers are not any mysterious, unkowable thing.

      Capitalism, and political/social/economic freedom, works, while command economies and repression in all those areas leads to poverty and explosive social collapse. The lessons of the fallen soviet empire have been duly noted all around the world, some places better than others, of course.

      A century of hard work confronts the world, as our overly statist systems try to remain innovative and productive while shedding the impossible burdens of a failed welfarist fantasy. It is a complex task which will require the very best of all our efforts, both intellectual and moral.

      To our children, and their children, godspeed.

    7. GFK Says:

      Lex, good topic.

      On the political front I can only contribute neophyte opinions, but on the business of semiconductors I’m at least a junior expert, so I’ll speak to that affect.

      India is far ahead of China in the semiconductor business. China has investors, some managers from tawain and some engineers they’ve pulled from places like singapore. However, I’ve never heard of a real project being done there OR any US personnel cuts due to Chinese outsourcing, not from my customers or through the grape vine. The only work I ever did with chinese was a tiny little test project that was using 15 year old technology. Essentially a training course for Chinese fresh out of grad school before they were sent to the new TianJian office of very large unnamed semi company.

      Contrasted with India? I had regular conference calls with India on REAL projects, chips that you people right now have in your phones. I had strong indian customers who had never been to school or work outside India. They learned their trade in their own country. I’ve never heard of a similar case for a Chinese. At another unnamed TX semi company the whole design arm of a very profitable unit fo 300+ people was cut and all the work was sent to India. Again, can’t say the same about China, I’ve never heard of it, in fact the idea is laughable.

      So when I hear people say “when is India going to overtake China” I’m a bit confused, because in hi-tech it already has and it’s lead is only growing.

      So exactly where is China ahead of India? Manufacturing barbie dolls? Nike shoes? knock-off electronics?

    8. GFK Says:

      Want to have a taste of how the Chinese think about their own system?

      Well buy a ticket on Shanghai Air, because everything the Chinese do on the internet is censored.

    9. Lex Says:

      All I hear about India’s tech industry is consistent with what you say. However, as the Indians themselves always write, the very advanced sectors in India are too small to drag the rest of the country forward. So, we should not make fun of low tech manufacturing, which can be a way to improve the lot of millions of Indians. There have been some very interesting proposals made to try to get Indias 700 million rural village dwellers into the modern economy. The Rural Infrastructure Project is one example.

      There seems to be a lot of serious and high quality thinking going on in India about getting the country going economically. And the expat community is commiting its skills and investment capital to it. One source I have found enlightenting is the Indian Economy Blog.

    10. Jim Bennett Says:

      In reality, democracy has little to do with economy (so many democratic developing countries in the world, but which one actually became developed country because of democracy?)

      Formal process democracy is not one-for-one mapped on economic development because so many nations have had a cargo-cult form of democracy — cliques and family networks that used to scramble for a share of loot by other means now manipulate elections and control “parties” to the same end, at least until the next coup. But the underlying supports of real democracy — strong civil society, independent judiciary, rule of law, voluntary association, free entry into markets, independent and critical press, open multy-party systems — are very strongly correlated to prosperity. Hong Kong and Singapore haven’t had all of these factors but they have had most of them. The PRC has hardly any of them. India has almost all of them, even if imperfectly.

      I very much hope China can develop all of these things — the world will be a better place with a free, properous China. But the experiences of Taiwan and South Korea argue that China has a long way to go and many hurdles to overcome, and until that task is accomplished, China will be an unstable factor.

      As for China having twice the GDP of India — well, without a free press and a transparent government in China, how the hell can anybody know that for certain?

    11. dente Says:

      India will never be able to catch up with China in a larger economic scale. simply put, India has 1 billion people and its population is still growing at at alarming rate, but the problem with india is the fact that its land size is roughly half what china has. If the indian birth population are expanding at this rate, where will the indian government find enough resouces and economic means to improves its own citizen well-being in terms of educational, social and economic need. The numbers just not add up. So forget about myth about the indian’s high technology and world class of education system, simply it is not true! please read the link from bbc.
      http://news.bbc.co.uk/1/hi/world/south_asia/4793311.stm

    12. Lex Says:

      “where will the indian government find enough resouces and economic means to improves its own citizen well-being in terms of educational, social and economic need”

      It won’t. It’s not supposed to. The government is not supposed to provide for social or economic needs, and need not have the major role in education either. The Indian government is mostly part of the problem in India, doing things it should not be doing, and not doing the things it should be doing very well. Getting the government out of the way, and competent at its basic functions is what has to happen.

    13. Lex Says:

      “where will the indian government find enough resouces and economic means to improves its own citizen well-being in terms of educational, social and economic need”

      It won’t. It’s not supposed to. The government is not supposed to provide for social or economic needs, and need not have the major role in education either. The Indian government is mostly part of the problem in India, doing things it should not be doing, and not doing the things it should be doing very well. Getting the government out of the way, and competent at its basic functions is what has to happen.

    14. david foster Says:

      I agree with Lex that India’s development will require lots of manufacturing, as well as software, calls centers, etc. The industrial side of India, although it has a long way to go, has already developed more than many people are probably aware of. Here’s one interesting example of an Indian manufacturing company, the Bharat Forge.

    15. Eric Says:

      Lex, if I offended you, I apologize. The reason behind my first comment was that, all your decription about China’s problems are true, but since it is a comparison, the similar problems in India should also be discussed. I agree to almost all of your comments and China has so many problems, the worst is the lack of free press and rule of law. Because India has had free press and rule of law, etc. for a long time, in theory they should be way ahead of China in GDP, but in reality, China is way ahead except in IT software (mostly because Indians know English and that helps outsourcing industry a lot). Therefore using the same theory to predict future is not very reliable, given all the problems that China and India has. One myth is that China does not allow any debate. Actually only political debates are censored. People in China can discuss about non-political issues freely, as long as the government does not feel threatened. It’s exaggeration that there is no free thinking in China at all, just no political free thinking.
      I completely agree with Jim Bennett except his questioning about China’s GDP. You can get GDP data from World Bank, CIA web sites, etc. A visit to both China and India would erase any doubt that China is way ahead of India, at least for now. I mean the infrastructure and overall economy. Check out this:
      http://www.time.com/time/asia/covers/501060619/graphic.html

    16. Eric Says:

      In case the URL got lost: (very enlightening facts, especially if you don’t already know)
      http://www.time.com/time/asia/covers/501060619/graphic.html

    17. Eric Says:

      Why is the caste system in India hardly ever talked about in the West? To me, that’s as bad human right violation as China’s. Double standards?
      The Western common wisdom seems to be stuck in this communism v.s. democracy black/white lense. Objective and fair comparison should look beyond that.

    18. Jim Bennett Says:

      Eric:

      The CIA systematically overestimated the GDP of every Soviet-bloc country prior to 1989-92, because it was insufficiently skeptical of official statistics. This is a generic problem in evaluating nontransparent countries from the outside. The coastal and urban areas certainly have much-improved infrastructure, but that excludes much else of the country. So it is hard to estimate GDP.

      Nations can hav most of the basics for prosperiy as I discussed above, but still be stagnant because of bad government policies such as autarky and over-regulation. India still has a long way to go in reversing these bad policies. But because the basics are in place, once the policies are reversed, progres can then be extremely fast.

      The caste system in India is a restraining factor as well. But an open market economy contains incentives to erode these cultural aspects as well, as seems to be happening.

    19. Lex Says:

      Eric, no problem.

      The main point I am making, which the things I read, and my understanding of history, is that to get far along on the development path the institutional underpinnings are absolutely crucial. So, even though, and I agree, India is way behind China now in many ways, India nonetheless has a relatively strong set of institutions which will make the transition easier and better-founded in the long run. This has nothing to do with wishing bad things on China. It has more to do with not underestimating India, and not underestimating the relatively invisible aspects of economis success in the long run.

      Thanks for the link.

    20. Danny L. McDaniel Says:

      Both India and China have corruption problems in their respective governments, but it is India that is the world largest functioning democracy. Add the fact of their ability to converse in the international language of English and I believe they will be the dominant Asian nation in the 21st century.

      Irrespective of who has the highest and fast growing percapita income, it is not how they start but how they run the race in tyhe long. It is India’s to win or lose. China is too dictorial for the long run. For China to be truly prosperous it must be free with a democratically elected government abd full political participation by its people. As long as the Communist government runs a one party state the trade off with their subjects will be that they cannot have freedom and democracy but they can be economically prosperous. That is the formula for disaster down the road. It will relieve pressure of the Chinese government for reform and will give the average Chinese a large degree of comfort but that pay off will not, and cannot last forever if they want geniune economic superpowership.

      India provides its’ people with the freedom to select government, and though it has many ancient societal problems, that ability to participate cannot be easily put into economic terms. They have a form of government that resembles the British and a mind for business and the work ethics of the Americans. My bet is on India!

      Danny L. McDaniel
      Lafayette, Indiana

    21. Yang Taiyi Says:

      As a chineses in communist china, we are more confident on china’s development now simply because most chinese know what the western countries like better than our counterpart’s knowledge on us, as Sunzi saying” you can destroy your competitors if you know them better” no chinese from commusit china will became stuning whilst they vist USA/UK/India..,becuase we know well about them by simply picking up a chinese newspaper for a month you will know everything. Ironically,I simply find that most western medias are all biased at china if i occasioally read them through internet, perhaps an average american spend all his life on reading newspaper but would have known little about a real china, alway stuning at china’s performance while he vists china in person.

      The communist are telling his people the true face of USA, to understand your competitors and then you will defeat them, billions of chinese are studying english.

      The western governments are brainwashing their people,simply to prove greatness of their democracy, how can they compete with chinese if average people dont know china, then they will be gradually defeated at least in economic field.

      Today’s china is devoloping rapidly and its devolopment is just starting.

      Please checking are you really know china or chinese, as chinese do, LOL!

    22. Eric Says:

      Jim Bennett:
      You made a good point about India’s policy. India has yet to show that they can reverse their bad policies. You can deny the China GDP data outright. Are you also going to deny the other data from the Times link that show clearly who is ahead?
      All this prediction is really just theory. I use track record (history) to tell future. Unless significant changes take place in India (policy reversal), the same system won’t do something that it has never done before. Until then, I won’t bet on India. Remember that China can also reverse their bad policies, though China also has yet to show they can. Future is everyone’s guess, but right now, the Chinese cat is catching more mice without caring what color it is.

    23. Jonathan Says:

      Interesting.

    24. dente Says:

      freedom of speech? political democracy? sounds very good to the people living in the developed countries. In a developing country, people do not think is the top priority. Foods to the table, safe drinking water, and universal basic educations is far more important. Only the elite class or those who designate themselve as an Intellectual think democracy and political freedom is more important. please do not compare your noble thought between an apple and an orange. Only you have lived in the developing country, especially in the countryside where majority of poors live, you will conclude what is the best for you and your family. you are not able to send your children to school, your family are starving, you not able to see a doctor when you are sick becuase you are broken. you drink the water from river which is high in mercury and toxic because you can’t afford your bill. Please try to understand the Maslow’s hierachy. physical needs is the top priority, then follows by safety needs, then follows by pyschological needs, and etc. Do ever think freedom of speech and democractic institutions would bring your physical needs. wake up india!
      what happens in india is a democratic confusion, political impasse, human developmental stagnation, and policy failure are key to so-call indian world largest democracy! be aware india, forget about comparing with china, even vietnam is gaining ground with india economically. Once again india will always be india!

    25. Eric Says:

      I am still searching history to find answer – so many democratic developing countries in the world, but which one actually became developed country because of democracy?
      Only Jim Bennett gave me an explanation why there is none. So I can say democracy does not directly lead to economic development, at least no real example to prove. There are examples the other way – democracy follows economic development, such as S. Korea, Taiwan. Maybe that’s why the Chinese leaders always say that it’s not time yet for full democracy in China. I believe that’s what’s going to happen in China – as their economy and society develop to a certain threshold level, free press and rule of law will eventually happen. Right now they are “overprotective” in fear of chaos (right or wrong). Given China’s long history of warlords and chaos, such thought is deeply rooted in China and is usually not understood by the West (duh, how much does the West know about China beyond human right violation and cheap products in Wal-Mart? How much of China still fits the definition of Communism?).

    26. Eric Says:

      Dente,

      Can’t agree with you more! That matches my observation about the reality that democray does not work well in poor countries. It leads to chaos more than prosperity. But democry works well in almost every developed countries. No theory can explain, just reality.

    27. Anonymous Says:

      Link
      Go read the 2005 Transparency International corruption Perceptions Index done by the Berlin-based organization Transparency International, the democratic India ranks worse than China in Corruption Perceptions Index, despite all the theory.

    28. Eric Says:

      Link

      If you have never been to China and India, this article will get you prepared before you compare the two countries.

    29. Yang Taiyi Says:

      Democracy is only an approach for development, it is not destination, the key areas for devoloping countries like India/China are; land reform, education improvement, woman/man equealization, social stablity and equealization, birth controlling,high saving rate, properly economic structure etc.

    30. Eric Says:

      World Bank’s Knowledge Assessment Methodology
      And related article
      Read the above 2 links. According to World Bank, China scores 4.74 in Innovative Index, while India scores only 3.72. And the gap between China and India is also widening.

    31. Jim Bennett Says:

      Mr. Yang:

      Most Westerners are pig-ignorant of China and Chinese history and culture. This is true. But a non-trivial number know quite a bit, and because they have access to sources that are not yet available to the average Chinese in the PRC, maybe they know more about China than you do. I do have some Chinese friends from Hong Kong who are very well-read in Chinese classics and history, and who are knowledgable about the mainland today, and have said some interesting thing both pro and con about the future of China.

      Eric:

      I don’t say the data on Chinese GDP is wrong, I say I don’t know whether it is right or wrong. Historically, the CIA was quite wrong about Soviet-bloc GDP == that’s one of the reasons the Germans found reunification costing far more than they expected. Maybe Chinese data isn’t as bad. But I have to be an agnostic on the matter.

      It used to be easy to correlate democracy and prosperity, before the advent of states that had democratic constitutions but not a history of strong civil society. Now you have to look beneath the surface appearance of electoral activity to other indices of civil-society strength, which will be better predictors of prosperity. Just having elections doesn’t bring prosperity. The relationship between democracy and prosperity is like the relationship between wet streets and rain. Wherever there’s rain, there are wet streets. However, you can’t make it rain by wetting the streets. Just so, you need the deeper institutions of strong civil society before you have real lasting prosperity, or for that matter real lasting democracy.

      Both India and China have problems, but are growing prosperous. To the extent either or both fix their problems, they will grow more prosperous. The point is, India’s problems are more superficial and can be fixed by improving existing institutions and making them work quicker, cleaner, and faster. China needs to undergo some fairly basic transformations, following the examples of Taiwan and South Korea. These will take longer, be harder, and have a greater chance of failing the first or second time they are tried. To make a simple analogy, India is like a healthy man with a bad skin disease — he feels bad and looks bad, be he can be cured with a skin cream and some shots. China is like a man who had some broken bones which were not set well. He works hard, but if the bones were set properly he would get much more done with the same effort. But to be cured his bones must be re-set, a difficult and painful process, that doesn’t always work. I think India will get its skin cream sooner than China will get its bones re-set.

      But in truth, it is a matter of whether China undergoes its transition in the 2020-30 time frame, or the 2040-50 time frame. It is almost certain to happen sooner or later. China and India will both be major players in the 21st century, more major than they are now. It will be a better world when India and China (all of each, not just the bright cities) become prosperous. My own concern is that my own society solve its own problems so that it will continue to be a major player in this coming era.

    32. Jonathan Says:

      Eric and others:

      If you are going to put a URL in your comment, please follow our instructions for posting URLs. You may find these instructions below under the heading, “Post a Comment”.

      Eric’s 11:53 comment shows the correct way to post a URL.

    33. Eric Says:

      That article even changes my own perception that software writing India is more “innovative” than toy making China. No wonder China sent a human into space before India. Enough reality, no theory. We just need to learn the fast changing reality.

    34. Eric Says:

      Mr. Bennett,

      Your theory per se makes good sense. But it just does not match the reality that China has shown so far. The first person experience of the BBC reporter, the Corruption Perceptions Index, the World Bank Innovation Index (no free thinking in China?), all these facts are contrary to your theory, which is the common wisdom in the West. Can you explain this? Note that the GDP data, Times graphs, and the indexes are overall for entire China, not only for coastal China.

    35. Eric Says:

      Why has India never been able to make the “easy” fixes to their system? Or is it really easy to fix?

      So it proves my guess that India is better at software outsourcing because of their English, not because of their education system, as World Bank Index shows.

    36. Yang Taiyi Says:

      Jim Bennet,

      It is pathetic that you have to know quit a bit about the communist china mainly from your Chinese friends from Hong Kong, what time is it now? why not simply from your media, how can he do if an average people has not his friends from Hong Kong? It does not matter a few westeners know china, considering billions of average chinese are knowing you well.

      Can you read chinese? if yes, please simply use “baidu.com” to search what average chinese can access, do not be suprise that you can easily access to sources to discover the so-called organ harvesting of Falun Gong practitioners in China, Sujiatun camp, 1 million tibetan killed, Tiananmen Massacre, thousands killed in tiananmen square in 1989, the unknown story of Mao, the coming collapse of China by Gordon Chang, free tibet, free estern turkestan movement, dalai lama, human right violation …. all those are in chines which can access to average chinese. does the West know more about beyond those?

      It is really china’s lucky if west media continue to brainwash his people.

    37. dente Says:

      The reason there is lot of talks in comparison between India and China economic development which being orchestrated by the current Bush government policy. Some american scholars and public officials do not like the fact that a successful,influential and modern China whom they think would diminish american’s influence in the world. so they play the India’s card to check China’s influence. U.S government facilitate india in area like military technologies, advance industrial processing equipments and of course financial assistances. Unfortunately India either by its inertia or lacks of clear policy vision, it is going to fail no matter how hard the U.S tries to help. In order for India to catch up with China. here are my recommendations: 1) allocate more money to educate the poors. 2) Gender equility. 3) population stablization( birth rate too high, simply eats up too fast without replenish). 4) provides the secondary education for all Indian. 5)closely collaborate with regionals and the world in trade and manufacuture.
      One thing Indian government continues to boast about their excellent higher learning institutions, it is simply not true. From my unbias conclusion, China has advanced India in the areas like economical development, human resouce, basic infacstructures, and secondary education at least 15 years.
      here is the world university ranking for 2005-2006
      http://news.bbc.co.uk/1/hi/world/south_asia/4793311.stm

    38. Yang Taiyi Says:

      Dente;

      India is doing better in certain areas such as excellent higher learning institutions, more efficient financial system, more dynamic domestic private sector development,avaliablity of corporate governance,better IT outsourcing, more multi-national corporation.,etc. those are not news for an average chinese, you can easily find those informations and discussion from communist media,things are improving but still there is a long way for china to catch up india on those fields.

      I personal think that China’s coummunist government are struggling to learn from india’s davantage, however, India’s democratic government is trying to find out china’s weakness to prove its greatness only.

    39. Eric Says:

      Yang Taiyi,

      You gotta be kidding! That’s not a police state that we think it should be in the West. I am sure there is some jaw dropping about China’s Internet cencorship just like the Indian man on the plane in that BBC correspondent article. Western media is so biased on China that it’s almost like brainwash. They jump on every China human right story or workers’ rights, but ignore the caste system in India, where people can only do the dirtiest job – washing toilets, and no right to go to school for life!

    40. Chicago Boy who Really should be Working Says:

      I think what we should be using for predictions is the law of “least limiting factor,” as it is expressed in botany and agriculture. The land can support plant growth only to the extent allowed by the resource that is most scarce. In a dry climate, that would be water; in poor soil, the available nutrients; in a cold climate, the number of days between last and first frost.

      What makes this analysis difficult is that each system presents a different set of limits. For example, in addition to the factors mentioned, China has the enormous overhang of bad loans to state-owned corporations. China must continue to attract foreign capital (a good deal of it from overseas Chinese) to overcome this, and it is not hard to imagine the circumstances that would interrupt this.

      India’s manufacturing sector is a long way behind China’s because, paradoxically, its labor force has stronger unions and more forceful advocacy in the government than its counterpart in its allegedly communist neighbor. Manufacturing tends to broaden the benefits of industrialization far more than the service sector currently leading “shining India.”

      Some things they have in common, besides corruption, include a relatively poor and backward countryside; low-level insurgencies at the perimeter; and gross inequalities of income and wealth.

      My guess (and that’s all it is) is that India is the long-term favorite, simply because their system is more amenable to change. They can adapt more quickly to changes because they get better feedback from their customers, clients, and electorate. A bad policy or a poor product is more likely to be fixed if someone (including a politician) can lose a job over it. I say this is the long-term view, because for the next decade or so, China will continue to dominate if nothing goes wrong.

    41. Anonymous Says:

      “becuase we know well about them by simply picking up a chinese newspaper for a month you will know everything”

      Taiyi, keep reading your papers bro. In fact, if you REALLY want to understand the USA why don’t you study some russian and get your hands on old copies of Pravda. Then you will without a doubt truly understand the shallow capitalist mind.

    42. GFK Says:

      I must have forgot to fill out the comment form. The above post was by me.

    43. Yang Taiyi Says:

      GFK,keep reading your papers bro. In fact, CCP is something but she is not silly, chinese are poor but they are not stupid, if you REALLY think that current china were like soviet union that,you are brainwashed.In short and actual, today’s china is a combination of communist’s strength in administration and capitalist’s advantage in economic devolopment which is good for a big devoloping country.

      It is well known among average chinese that USA has advanced China in the areas like economical development at least 100 years, basic infacstructures at least 50 years, and higher learning institution at least 40 years. In fact USA is no longer a mystery for an average chinese, the chinese know well about how and why USA is so advanced.

      Western media is so biased on China that it’s almost like brainwash. They have no interest in why and how is china making progress, the only thing they jump are on every China human right story or other negative news, the american have known well what PLA did in 1989 in Tiananmen,but who have an ideal what PLA did in 1998 in Yangtze river; perhaps they know “tiananmen mother” but do they know any comments from average chinese about it.

      For the past 10 years, 95% (stuning)western communists have predicted mistaken on china’s economic development,why? because the biased information they insist, for example, the chinese gov told them that china’s non-performance loan is about 27% (the latest gov number is 7.8%),they did not belive and referring to west information it must be 50% or more and china’s NPL would have amounted to USD$900 billion…collapsing? of course.. LOL! how stupid, keep on your dream.

    44. Anonymous Says:

      GFK,

      To be fair, take a look at Chinese official news Web site (multi-languages), then point out which part about US is silly communist propaganda.

      Yang Taiyi,
      China is still not fully transparent. Given wide spread corruption, I would think China’s non-performance loan is somewhere between the government data and Western estimate. It is true that China’s collapse has been predicted for many years, but theory just does not match reality.

    45. Eric Says:

      GFK,

      I mean don’t miss the Britney Spears pictures on that Web site, make sure they are not doctored somehow :-). I posted last comment.

    46. Eric Says:

      Wow, Chinese communist party newspaper reports their own corruption! Not something that people would imagine in the West.

    47. Mitch Says:

      @Yang Taiyi:

      Don’t get us wrong. The US has a large, prosperous, and influential ethnic Chinese population. We have plenty of Chinese nationals working here, and important commercial ties with China. The US is culturally close to Europe, but we have been a Pacific power for 156 years out of our 230 total. Our relations with China were friendly until 1948, and we are willing to resume that relationship. No western power besides the US fought alongside China against the Japanese invasion (we even fought while we were supposedly neutral). My own father flew in a bomber crew in China. We don’t wish China ill. We do, however, wish that China’s government was worthy of the Chinese people, which it clearly is not. It is the most significant obstacle to China’s development.

      The main question for China is not whether, but when and how the CCP will leave power. Voluntarily, peacefully, orderly? I hope so. Soon, too, I hope.

    48. Yang Taiyi Says:

      “I would think China’s non-performance loan is somewhere between the government data and Western estimate”.

      who knows? their reports (7.8% of NPL)have been audited by PWC,Ernst & Young and landed Hong Kong stock exchange.

    49. GFK Says:

      We’re not going to agree, but time will certainly tell.

    50. Eric Says:

      If CCP was replaced by an elected party, there is still no guarantee that the new party can do a better job (CPP at least is getting the economy going fast now). Look at today’s Taiwan, their elected ruling party is doing such a lousy job in economy than its predecessor, not to mention the scandles and brewing political turmoil. Theory does not always work well, depending on the context.
      The Chinese tranditionally believe in good emperors who make them rich. Whichever cat that can catch mice.

    51. Eric Says:

      Time has already told something by now, hasn’t it?

    52. Yang Taiyi Says:

      Mitch

      Chiese people will never forget the help from american alongside china against the Japanese invasion, no chinese deny the fact that china would have been troubled without the help from american. China government is not stupid and no willing to challenge the powerful USA, she is making herself up to the USA.

      China have long history without interrupted, she advanced 2000 years but laged behind in the past 200 years. No wonder that chinese are good at surviving themselves, we know what should be done and what should not, we have our own logic and culture perhaps different from you.

      You vote in your president with voting paper, we vote in CCP with our own blood which have more precious than your vote paper.

      With only 56 years in power for CCP who have done a quite good job, It is too early to decide that CCP is not worthy of the Chinese people, I am an average chinese not a member of CCP, but i think it is fair to give CCP 230 years to see what china will be.

      230 years, let’s see what happens.

    53. Kurt Says:

      I just had this discussion with a good friend of mine last weekend. Anyone who thinks India has better prospects than China clearly has not visited both places or has spent much time around Indians and Chinese.

    54. veryretired Says:

      This is really artistic—a comment thread designed by Dali. Surreal. And I thought he was dead. Silly me. He obviously emigrated to China and changed his name.

      Silly putty pork chops, and Chinese government statistics. What a picture.

    55. Yang Taiyi Says:

      “Anyone who thinks India has better prospects than China clearly has not visited both places or has spent much time around Indians and Chinese”.

      Why do you have to visit both places to understand both country? you can simply follow the media to understand everything if the western media is qualified and no biased. unfortunately, the wester media should learn from communist CCP media with fully transparent and no bias.

      Just like CCP has done, to impove media’s quality and transparent, it is good for everyone to understand the world and then decision making properly.

      We must understand that is a basic human right for one to know the reality. Your government and media have no right to blind the people.

    56. Danny L. McDaniel Says:

      Economics, economics economics. Talk all you want about how the super economic state of China is and will be. But if you are sitting in a rat infested prison (aka re-education camp) in China without due process of law all the economic theories and money in the world are not going to help you. For example, the Lukos fiasco in Russia where one of the wealthest men in the world sits in a jail cell with no recourse to law. These people make it up as they go!

    57. Anonymous Says:

      Media needs to sell stories that its customers like to hear. If you just report bitter truth that people don’t want to face, they will be dismayed and some turn sarcastic.

    58. GFK Says:

      “Time has already told something by now, hasn’t it?”

      um… no Eric, it hasn’t, at least nothing definitive, otherwise there wouldn’t be a debate.