China versus India, everything wrong in China but everything right in India

I was reading this article, ‘A rising India poses a threat to China – but not just yet’ in the Today paper on 18 Jun by YooLim Lee and William Mellor. The main point in the article is that everything in China is wrong, the Chinese are doing everything wrong, and are faced with mountains of problems. In India, everything is right and everything is going for India, with a pro business Modi calling all the shots and India would be overtaking China in a matter of time. And they have a lot of evidence to prove their points, no guessing stuff.

Under ‘China’s headwinds’, China’s economy has slumped to 7% growth rate,  their strategies are misfiring, one child policy leading to lack of cheap labour, the economy depending on cheap and low priced exports, govt spending on infrastructure gone to waste through corruption or building ghost cities. China is desperately trying to transform its unbalanced economy but will be very bumpy and create many losers. The perpetual hope that China will prop up its economy is misplaced. There are big concerns on China’s huge debt and deficit. In other words China is doom.

In India, the economy is expanding and its growth rate ‘will be 7.5%’ after India revised the way it calculated its growth and changing a 4.7% growth into a 6.9% growth. And there is the able and pro business Modi opening up investment of railways to foreigners for the first time though China has opened the whole country since 1978. And Modi also ‘raised foreign ownership limit in the defence and insurance industries to 49%  from 26%...scrapped diesel subsidies and pledged to unclog transportation and build cities.’  Impressive.  Modi is also as tough as Xi in tackling corruption by supporting a law for prison terms up to 10 years.  I think China either executes corrupt officials or imprisoned them for life. And Xi has arrested more than 100,000 corrupt officials. Modi would soon be starting to arrest some corrupt officials too.

While all the evidence is pointing to a crumbling China losing its way and messing up its economy and India is doing all the right things to catch up, the article also pointed out a few funny statistics. China’s economy is US$10 trillion compares to India’s US$2 trillion. China has been growing at average 9.8% since 1978. And even if India were to grow at 8% and China slowed to 7%, ‘China will still create another three Indias before the decade is over.’

The duo forgot to add that Xi has another 8 years to run his China while Modi may be voted out in 3 years time. They concluded that despite all the wrongs in China and all the rights in India, ‘At the end of the day, the China India rivalry is no contest on most fronts. In economic clout, military might, geopolitical influence, literacy, health, life expectancy and even sporting prowesss, it will be an unequal competition for years to come.’

While they quoted a Morgan Stanley analyst, Ruchir Sharma saying China may not even be paying attention to what is happening in India and the so called challenge, as ‘China’s strategic game is much bigger’, the two still concluded that ‘India’s rise presents one challenge China’s Communist Politburo may find impossible to match…India’s very existence is an example to third countries that they can be democracies and grow. ‘  The 3rd World countries will thus be blessed to have the India and China growth and development models to choose from.  One has succeeded but full of problems and another full of aspirations and full of hopes and full of promises and aspiring to be successful. Shall I add full of ‘no problems’?

Chinese goods are chopped, ‘Made in China’. Modi is trying to sell ‘Make in India’ goods.  See the difference?