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Interesting debate on China vs. India April 26, 2006

Posted by exertia in Economics, India.
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The McKinsey Quarterly has an interesting article on the race to growth between India and China. Some of the arguments have already been heard before, but there are some interesting new ones as well. Takeaways and viewpoints:

  • China’s growth has been driven by manufacturing, and the country’s planned economy has tapped into domestic savings and foreign investment to build an impressive infrastructure.
  • India, by contrast, owes much of its progress to private businesses. Without much assistance from the government, they serve companies in the West’s knowledge-based industries, such as software, IT services, and pharmaceuticals.
  • China, unlike India, might have shackled its entrepreneurs-to the detriment of the economy’s long-term health.
  • Chinese government has chosen the only method available to kick-start the economy.
  • The performance of the two countries should be compared only at the sector level… sectors that escape heavy-handed regulation are the ones most likely to thrive.
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Comments»

1. Matthew Cabot - May 22, 2006

This is a fairly rediculous claim. Shackled entrepeneurs? I think it is commonly accepted that chinese are the most entrepenerial people. If you think china has stemmed its business knowhow, think again. Did you know that government bureaus actually own property and can use them for profit, they even compete against each other in creating business and investment. There is talk that there is so much competition that there is almost no margin in China. Honestly, do Indians ever brag about anything outside of infosys and wipro? Are two companies that hire a tiny work force suppose to symbolize superior corporate structures? Do you realize that india’s economy is far more state-owned than china’s? And then there is the problem of feeding 1 billion people on 1 million IT jobs, good luck with that.

2. exertia - May 22, 2006

Please see my comments here.

3. Giacomo - February 20, 2007

Some very interesting discussion concerning recent economic developments in China and india. Comparative and analytical, in-depth with lots of interesting facts and figures


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