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It's the talk of the town — who's going to win this race of the 21st century? And beyond that who's going to be the hare and who will be the tortoise — India or China?
Let's take India's case: India's first and foremost advantage is its democratic form of government. Moreover, the nation is a production power-house and it also reaps benefits from an excellent educational system. Its native enterprises are self-sufficient and are growth engines.
Yes, India has its own share of issues. The government doesn't invest enough in vital infrastructure while it spends too much money subsidizing agriculture. China has invested more in infrastructure than India has, which is in a big catch-up situation. Three other things that hold India back are draconian labour laws, corruption, and indirect tax structure. We need to work on these areas.
Against these, China's economy has grown more than 7 percent annually for the last couple of decades. China has emerged as a manufacturer of high-tech goods and is backed by a hoard of companies featuring the likes of Lenovo, Baidu.com and Huawei Technologies. The right prescription to be a winner!
On the flip side, China's aggressive growth has disguised several increasingly pronounced dark patches. Statistics tell me, though China's labour productivity is at a reasonable level, its capital productivity is low. This means that the wealth creation process has been the work of foreign investors and multinational companies rather than native enterprises. China's economic growth is smooth on the surface, but turbulent on the inside.
I'm sure everyone will agree with me that the Chinese government has made a virtual agreement with the rising entrepreneurial class by saying "okay you do business, but leave the politics to us!" The business class has no say in the affairs of the state. There is a fear that the better-off sections will press for freedom to use their economic clout and may lead to an incompatibility between China's political and economic system in the near future. And when this happens, the MNCs will leave the country in droves.
My views are not about supporting India's case or trying to check the Chinese threat, but to ensure that consumers and investors do not put all their eggs in one basket.
In China, you can be rich, but you keep your opinions to yourself. Any Indian can also dream about making a fortune, but they can apply those lessons to build a better society. India's human touch even in its economic growth is its greatest asset and this will perhaps be the dominating factor that'll take it to the finishing line, FIRST!
To rule is one thing, how you rule is another! So what do you think?
Mr. Bikky Khosla,
You always know how to mince your words don't you. Yes I agree with you on many of the points that you have raised here in this editorial of yours. But let me ask you a question in return. Have You Considered America? That country will try anything to make sure that China is kept on a tight leash of its (America) own make. Why do you think the Americans are so worked up in getting the 123 Civilian Nuclear deal finalised with India, previously they were the foremost one to condemn the Nuclear Tests done by the NDA Govt, weren't they? And what about their so-called friendly attitude towards Australia. Consider these two points well, my friend. and tell me what you make out of it.
Thanks for your patience,
Rajat Sen
Free Member, Joined :05/14/2004
No of Topics Posted : 0
Reply/Comments : 3
Yes, what the editor says seems to be very appropriate and true. The government and all the political parties should work in unison to achieve a better "business society", so that we are not loaded with various taxes, which not only leads to corrupt practices both at the governmental level but also at the origin of business.
Let all of us be reminded, free enterprise was the norm on this soil for almost since the land was inhabited, with trade reaching various parts of the world, when most of the world was not active in "exports". The spirit lives on. So let the political parties and especially the party in governance at various times, make collective effort to keep the spirit live and not act in such a way it dies or is snuffed off.
Let us not bank on Chinese negative points, because if that government makes a volte face and takes to democracy, where are we Indian business men going to look??
so let we the Indian business community build a good and sound business model so that we are not put to disadvantage vis-a-vis China, and Indian Government needs to do lot to keep the economy buoyant by creating a conducive atmosphere for the business and industry to thrive.
RUPANAGUDI POWER SYSTEMS PVT. LTD.
Hyderabad, India
Free Member, Joined :10/13/2004
No of Topics Posted : 0
Reply/Comments : 2
It is really a tough question. I think the main point lies not in whom will rule the future. It lies in who wants to rule the future. Since the world is a multi-functional one and a diverse planet, we cannot say who will rule the future. We may say who will surpass their own drawbacks in the fastest way and renew themselves.
Chonqing Assen Power Equipment Co.,Ltd
Chongqing, China
Free Member, Joined :07/03/2007
No of Topics Posted : 0
Reply/Comments : 1
China is on the verge of surpassing Germany, the current leading export nation whereas India, at present, is far behind.
Regards
Vishwa Arya
Free Member, Joined :08/12/2003
No of Topics Posted : 0
Reply/Comments : 1
The difference between stray dogs and tame dogs is which one is better once the answer is known, it will be evident.
Regards
Rajesh
Free Member, Joined :12/22/2006
No of Topics Posted : 0
Reply/Comments : 3
Hi,
I fully agree to the writers view. Indeed India could be a leader provided it invests in Infrastructure.Makes taxation direct and single point without any exemptions and covering broader category of people and business.
LADWA SAFETY SOLUTIONS PVT. LTD.
Bengaluru, India
Free Member, Joined :02/21/2003
No of Topics Posted : 0
Reply/Comments : 1
Hi Rajat,
As you have mentioned that "...That country (US) will try anything to make sure that China is kept on a tight leash of its (America) own make," I have fears which even the US Policy-makers are starting to understand and are finding China's economic growth uncomfortable. But due to various factors the US has failed to check this so called 'Chinese threat.' US would also not like to upset its applecart that might harm the economy (of US). It's not just about economics, its more about eco-politics!
Here is what I feel:
First and foremost let's take a look at the US-China relations. As you are aware that China’s economic rise has led to a substantial growth in US-China economic relations. Total trade between the two countries has surged from $4.9 billion in 1980 to an estimated $343 billion in 2006.
For the US, China is now its second largest trading partner, its fourth-largest export market, and its second-largest source of imports. Inexpensive Chinese imports have increased the purchasing power of US consumers. Many US companies have extensive manufacturing operations in China in order to sell their products in the booming Chinese market and to take advantage of low-cost labour for exported goods.
China’s purchases of US Treasury securities have funded federal deficits and helped keep US interest rates relatively low. Despite the perceived threat from China, the US economy has recently maintained full employment and robust economic growth. To date, the growth in Chinese exports appears to have come partly at the expense of Asian competitors. And not to forget the dollar reserves China maintains which helps the US cause too.
Now, is China really a threat to US?
Despite these factors that are helping US, many in the US policy-making machinery take China as a threat to US.
Without doubt the emergence of China as a major economic superpower has raised concern among many US policymakers who are feeling the heat. Many fear that China will overtake US as the world’s largest trade economy in a few years and as the world’s largest economy within the next two decades.
One can view China’s rise as US’s decline. Statistics tell me that US trade deficits with China, have risen from $10.4 billion in 1990 to an estimated $232 billion in 2006. Most people will agree with me that this is an indication that China uses unfair trade practices to flood US markets with low-cost goods and to restrict US exports. The situation is actually more alarming and the US think-tank seems to understand the fact. Take for instance its undervalued currency and subsidies to domestic producers.
These typical Chinese measures can, and will in future, threaten American jobs, wages, and
living standards. And take my word on this — the situation will get worse with China increasingly
moving towards production and export of more high-value products, such as cars and computers. Chinese state-owned firms will start acquiring US companies and China’s accumulation of US Treasury securities.
In fact as I write this message, several state-owned Chinese firms are in talks with US companies for acquisition.
If the situation was not as alarming and serious as it is today than the introduction of numerous bills, including some that would impose sanctions against China unless it reforms its currency policy and others that would apply US countervailing laws on Chinese products would not have come up in the US political scene.
Now the question is: How far can US go to stop this so called Chinese threat? Only time will tell!
INDIA
Kailiyuan Technology International Co., Limited
Kowloon, Hong Kong S.A.R.
Free Member, Joined :05/02/2007
No of Topics Posted : 0
Reply/Comments : 1
Thanks Mr. Sean Yan for understanding that India has the right potential to be the No. 1 Global Economic Powerhouse!
For those who think China will be No. 1 economic power, I will tell you why China's dream to rule the future will always be a dream:
Firstly, India today is the uncrowned king of the business process outsourcing world. China will never be able to compete with India's large English-knowing skilled workforce.
Secondly, China's growth is most chaotic and the political forces keeps everything under wraps. The Chinese economy runs with the barrel of the gun.
Thirdly, the biggest policies taken by the Communist government will go against the country's economic growth in the future. A Professor of International Business and Founder Director of the William F. Achtmeyer Center for Global Leadership at the Tuck School of Business at Dartmouth College, US had once said that, "...the mandatory one-child policy, which, on the one hand, leads to concealment of births in rural China, where families long for a second child when the first child happens to be a girl. He estimates that China's official population figure is around 200 million less than the actual figure. The sex ratio in China, at 117:100, is clearly loaded against women. On the other hand, where Chinese parents do obey the law, there is the tendency for them to pamper their only child and in that process make the child hardly fit for a work ethic required in a highly competitive economy."
If that's true than China can only dream to be the No. 1 economic power, but in actuality will never be able to be one.
Fourthly, today 50 percent of India's population is under 20 years of age. People in this age group are growing in an environment where the benefits of economic liberalisation, openness, freedom of ideas, innovation and competition have been evident and they are likely to face the future with confidence.
In contrast, in China the average age of the population is 34 (against 25 for India). There will be fewer people available to take care of the elderly, while the Chinese government, facing strains from mismanagement of its fiscal policies, will face an additional strain on this account.
So, Those who still think China will rule some day... dream on! It's India all the way!
Dear Mr. Khosla,
DEAD YESTERDAY-UNBORN TOMORROW
WHY FRET ABOUT THEM WHEN TODAY BE SWEET.
"Yes, India has its own share of issues. The government doesn't invest enough (and sensibly) in vital infrastructure while it spends too much money subsidizing agriculture. China has invested more in infrastructure than India has, which is in a big catch-up situation. Three other things that hold India back are draconian labour laws, corruption, and indirect tax structure. We need to work on these areas."
Very rightly said.
Why should we have so many Taxes under so many Heads? To run and manage the country, taxes are very much needed. This anybody can understand and appreciate, but creating so much of confusion?
Let there be only one Tax which should be collected from everybody, HONESTLY... 20% FLAT. Without any corruption. HAVES SHOULD PAY 30 % FLAT.
By now the government definitely has enough data regarding haves, so no need searching for them.
It is by having so many Heads under which Taxes have to be paid that corruption is given a chance to raise its ugly head.
Let the Finance Minister be bold and accept this suggestion.
Merchant A M
Free Member, Joined :09/02/2002
No of Topics Posted : 0
Reply/Comments : 1
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