6/27/2023

'Will India Surpass China to Become the Next Superpower?: Four inconvenient truths make this scenario unlikely.'

'First, analysts have been wrong about India’s rise in the past. In the 1990s, analysts trumpeted a growing, youthful Indian population that would drive economic liberalization to create an “economic miracle.” One of the United States’ most thoughtful India analysts, journalist Fareed Zakaria, noted in a recent column in the Washington Post that he found himself caught up in the second wave of this euphoria in 2006, when the World Economic Forum in Davos heralded India as the “world’s fastest-growing free market democracy” and the then-Indian trade minister said that India’s economy would shortly surpass China’s. Although India’s economy did grow, Zakaria points out that these predictions didn’t come true.'

'Second, despite India’s extraordinary growth over the past two years—when India joined the club of the world’s five largest economies—India’s economy has remained much smaller than China’s. In the early 2000s, China’s manufacturing, exports, and GDP were about two to three times larger than India’s. Now, China’s economy is about five times larger, with a GDP of $17.7 trillion versus India’s GDP of $3.2 trillion.'

'Third, India has been falling behind in the race to develop science and technology to power economic growth. China graduates nearly twice as many STEM students as India. China spends 2 percent of its GDP on research and development, while India spends 0.7 percent. Four of the world’s 20 biggest tech companies by revenue are Chinese; none are based in India. China produces over half of the world’s 5G infrastructure, India just 1 percent. TikTok and similar apps created in China are now global leaders, but India has yet to create a tech product that has gone global. When it comes to producing artificial intelligence (AI), China is the only global rival to the United States. China’s SenseTime AI model recently beat OpenAI’s GPT-4 on key technical performance measures; India has no entry in this race. China holds 65 percent of the world’s AI patents, compared with India’s 3 percent. China’s AI firms have received $95 billion in private investment from 2013 through 2022 versus India’s $7 billion. And top-tier AI researchers hail primarily from China, the United States, and Europe, while India lags behind.'

'Fourth, when assessing a nation’s power, what matters more than the number of its citizens is the quality of its workforce. China’s workforce is more productive than India’s. The international community has rightly celebrated China’s “anti-poverty miracle” that has essentially eliminated abject poverty. In contrast, India continues to have high levels of poverty and malnutrition. In 1980, 90 percent of China’s 1 billion citizens had incomes below the World Bank’s threshold for abject poverty. Today, that number is approximately zero. Yet more than 10 percent of India’s population of 1.4 billion continue to live below the World Bank extreme poverty line of $2.15 per day. Meanwhile, 16.3 percent of India’s population was undernourished in 2019-21, compared with less than 2.5 percent of China’s population, according to the most recent United Nations State of Food Security and Nutrition in the World report. India also has one of the worst rates of child malnutrition in the world.'

Link to article:
https://foreignpolicy.com/2023/06/24/india-china-biden-modi-summit-great-power-competition-economic-growth/

Anonymous

8 comments:

  1. Afghanistan is empire graveyard
    India is foreign companies graveyard

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  2. It was reported that a lot of Singapore companies are rushing to invest in India to earn rupees and provide employment for the Indians.

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    Replies
    1. Whatever happened to GCT's Indian fever? These reports are just trying to make it still relevant.
      India has the ingenuity on how to fill its coffers when short with hugh fines on big foreign companies for 'tax evasions" with Chinese handphone maker Xiaomi the latest target.

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  3. India had played out Russia on their Rupees.

    M.O.T. when Sinkieland Companies made profits if, the cunning Indians will come out with their 48 tricks.

    Firstly, we have sorts of currencies controls and had strict controls of transfers outside India.

    Then will come, aiyoo aiyoo, you had contravened our Companies Acts and Laws.

    So we have to fine you millions of fines.

    Also, the contracts that are signed by our predecessors are no more applicable as they are no longer holding their offices.

    So the contracts are now null and void.

    If you want, these are our terms. The Management should be under our peoples and now it 60 to 40.

    Ahem, we let you cook the breakfast, lunch and dinner and supper.

    If it's tasty. Then we eat and thank you for your Master Chefs in building up the Enterprises.

    This, we called Smart SMART and daylight robberies.

    Namaste.

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  4. Who really owns DBS India? Who is the de facto owner of DBS India?

    Is there any Singaporean working in DBS India to provide checks and control?

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  5. No problem for sinkiesland, as we are already part of india. when india bank got problem, dbs will help out..same as when india airline need to buy airplane, sia will provide the $$..when sg short of manpower, india will transfer truckload of them..haha

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  6. One Indian economist working on the statistics of growth in China and India came to the conclusion that India could not, within this century, grow to be a bigger economy than China.

    The statistical indication are that even if China grows consistendly at 5% in terms of its GDP today, that adds something like US$850 billion or thereabouts to its GDP annually. Even if India consistently grows four times faster at 20% annually, which is an extremely tall order, it could only add US$640 billion to its GDP annually.

    Moreover, there is the compounding factor to consider, which makes the gap even bigger. Unless China does not grow at all, India needs more than rhetoric to reach its projected potential.

    For India to move to the potential of being a 'factory of the world' status, it needs first to improve its infrastructure first and foremost, which is sadly lacking. Just leveraging on its population growth is not going to improve anything without the infrastructure base to go with it. And that takes time. Maybe a decade or two, but at the pace of India's system of doing things, might take much longer.

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  7. The Chinese economy was greatly helped by the return of hundreds of thousands of scholars educated in the West to start new companies. The Chinese diaspora contributed greatly to the growth of the Chinese economy.

    Indian talents remained abroad, working as employees to western companies. They can't find good paying jobs at home.

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