China and India – two competing nations for the status of a superpower..
It is a foregone conclusion that America will have to give up its sole superpower status within the next 2-3 decades, at least in the economic field… It is just a matter of time.. Two nations with a population of over 1 billion each are surging ahead..
But who will replace USA? India or China?
China – with a population of 1 billion has world’s largest forex reserves today, its exports are moving all around the globe.. cheap exports.. due to a weak chinese currency controlled by the Chinese government.. China is also the world’s largest autocracy with a dictatorial communist regime.. See Tiger Vs Panda
India -with a population of 1 billion again.. but with a difference.. Indian population is much younger compared to the Chinese. Chinese population will comprise mostly of retired people in the next 1-2 decades.. India is the youngest country in the world with over 70% of its current population being below 35 years of age! What’s more, India is the largest democracy in the world! Unlike Chinese currency, Indian currency is controlled by the open market..
A Comparison
So let us see where does the road lie ahead for India to become a superpower..
The Chinese economy is export oriented.. China is making money by its Cheap exports.. The day other countries come up with even cheaper alternatives to Chinese goods, or the day the true value of Chinese currency is enforced in the markets , Chinese exports will be hit and so will be the Chinese economy…
Indian economy needs to grow in an opposite direction.. Instead of being export oriented nation, India has to become consumer oriented.. India has a population of 1 billion.. It is 1/6 of world’s market.. the world’s largest youth population exists in India.. This market has to be tapped by Indian industries and the government should encourage consumption within India…
The American Angle
Note that America did not become a superpower by exporting its cheap products.. In fact American products were costly due to a strong USD in the earlier decades..
Instead Americans encouraged a consumer based economy inside USA. Americans used to buy everything on this planet.. So the companies there also started manufacturing everything on this planet.. the consumer oriented nature of its economy lead to more technological innovations.. by maintaining a stronger USD against other countries, the american government also ensured that its hungry consumer society got products from all over the world at a lower price. Which is also the reason why other countries exporting their products to USA ended up with inflation within those countries, while the american dollar remained stable! The very reason why american dollar never faced a huge inflation in US was because the rest of the world was exporting cheap goods to USA, thanks to their weak currencies against USD.
The lesson India needs to learn from this consumer oriented chapter of american economy is that India should move towards becoming a consumer based economy where even Indian companies start producing world class products which first gets sold in India and anything extra gets exported. For this India needs to have a very strong rupee first. Because when the rupee is stronger, it means you will get very little in return for exports.
Suppose 1 Indian rupee = 1 USD, then why would Indian manufacturers want to export their goods, because either way the returns are the same!
Even more, suppose 1 Indian rupee = 2 USD, well in that case the Indian manufacturers will prefer to sell their products within India instead of exporting it to US. This will increase the standards of life inside India. Infact, a rupee stronger than USD will mean that american companies will line up to export their products to India!! Just imagine in that case how the standards of living will go up in India. Well, yes there is also an energy angle to this!
Today what is happening is the best of the products manufactured inside India are exported and whatever is left is made available to the Indian consumers. Reason, exports bring more money than selling within India! This is exactly how americans got best of the products worldwide sold to Americans by maintaining currencies of other countries at a lower level than USD.
For instance today, best of the breed of Indian mangoes are exported to America! They are not available to Indians even though they are grown in India! This is just a simple example.
How about a stronger rupee? The price of a big 5 bed room house in USA for instance is about 4,50,000 USD ! Imagine buying a big 5 bedroom house in USA for 4,50,000 rupees!! In that case every young Indian IT professional today can buy about 10 such 5 bedroom houses in USA
US Economy
Inspite of a strong american dollar, the current US national debt is about $28000 per head! India, inspite of its weak rupee has a national debt of about 20000 rupees per head! Just imagine how the situation would reverse further as Indian rupee becomes even stronger.. The Indian average debt would come down to as low as about 2000 rupees per head without even having paid back a single penny, just because of a stronger rupee!
The best way ahead right now for India would be to use its heavy forex reserves for large scale infrastructure development projects within India, and this has to be done well before USD falls even lower. So let India not keep its forex reserves tied up inside the bank lockers..
Indian IT
The issue is that Indian IT industry will be hit if it continues to depend on a weaker rupee for its profits. Indian IT instead has to concentrate on developing core system products which has market both inside and outside India. In the next 10 years millions of new computers would be added in India thanks to more Indians coming online. If Indian companies can manufacture operating systems, compilers, databases, browsers, media players and what not.. just imagine the size of the market they can rule! This is just an example alternate approach I am suggesting for all similar export oriented industries – make use of the vast Indian consumer base.
Summary
To become a true superpower, India needs to concentrate on expanding its own consumer based market within India, there by making available best of the products to its own people..
Just by increasing forex cash reserves like China, no country can become an economic superpower. Just imagine what will be the status of China if the value of dollar crashes tomorrow? What will happen to its forex reserves of 1 Trillion USD?
So Indian economy needs to become a self sufficient economy with minimal dependency on exports. The government needs to encourage more spending within the country, than to solely depend on more selling outside the country.
Who do you think will win, if it happens to be a race between a Tiger and a Panda?
You can give your answer in the end..
Panda is the national animal of China.. and Tiger is that of India…
Yes, I am comparing India and China…
The popular media uses Dragon as a synonym to China.. and does the comparison as Dragon vs Tiger…
Well, let’s be realistic folks.. Dragon is an imaginary animal.. We live in a practical real world.. So this is a competition for the superpower status between Tiger and Panda.. not between Tiger and Dragon
Jokes apart…
The two largest populations on this planet of over a billion each..
Home to 1/3 of Humanity…
Neighbors sharing a long disputed border….
China and India..
A Chinese ambassador USA Hu Shih once said “India conquered and dominated China culturally for 20 centuries without ever having to send a single soldier across her border” He was referring to the dominance of Buddhism in China which was born in India !
India and China are two competing economies today for their share of the global trade.. rising economic giants.. can dwarf all other world economies in next 3-4 decades by mere size of their consumer population and the huge manufacturing industries..
Who will win the race for the economic dominance ? We all know that economic dominance leads to all other kinds of dominance in a knowledge society, including the military dominance..
India has greater chances to win this race..
Well, don’t think I am saying this because I AM an Indian..
Instead, I am saying this simply because i am an INDIAN
In other words, because I know what is India…
India is the largest democracy in the world!
China is the largest autocracy in the world!
India is building itself from bottom to top.. The one billion people in India decide their fate..
China is building itself from top to bottom… The communist regime is deciding the fate of its billion population..
When ideas come in from a vast pool, they tend to be better and stronger, even though the process might be slower compared to instant decisions…
Indian democracy might be a bit slow because of the democratic process involved in the whole operation… No law gets passed in India overnight, unlike China..
In China to build a flyover all it takes is an order by the communist government.. no questions asked.. people have to give up their land immediately without any resistance.. The economic growth is not a people’s movement in China.. Any questions asked will be answered by bullets! See the Tianenmen Square incident if you do not know about it.. The Chinese military and the government killed their own Youth, students! History is rewritten in the texts.. most of the current Chinese generation in China do not even know about Tianenmen square in China! They have never been told about it.. All search engines including Google and Yahoo inside China have blocked websites and web pages containing the word “Tianenmen” ! And Google says “Do no Evil”! Is denying access to information not evil ?
I mentioned Tianenmen because it was a failed rebellion against the government. Now just think what happens in case of another successful rebellion in China which overthrows the communist regime! Or of a civil war in China… If you do not know what is happening in China visit this blog – Chinaview
People are being thrown out of their own houses to make way for huge commercial buildings and flyovers! Even proper compensation is not given to them! They cannot go to the courts !
When I say Indian democracy is better than Chinese autocracy, people ask me, “see how well Chinese cities are maintained! How beautiful they are. Look at the roads! Dont you think a dictatorial regime can bring about similar changes in India too! Even our cities will be beautiful, free of traffic jams and so on….”
Well, I tell them the truth
In India the cities are becoming so messy because of the influx and migration from the rural areas into the urban metropolitan cities like Bangalore, Bombay, Delhi, etc
Do you think the Chinese big cities are so well maintained inspite of great influxes like this. How many of you know the fact that it is illegal in China to migrate from rural China to the Chinese cities like Shanghai, Beijing etc ? This is how Chinese government keeps their cities so high at international (?) standards, by denying its own people a right to the urban life.
Can you think in India about requiring a Visa to stay in some other city other than the one you are in now?. For instance, if you are staying in Bangalore and from next month you decide to go and stay in Delhi, will anybody stop you in India? Obviously No.
The question itself sounds so stupid in the first place! Well, because India is a democracy, nobody can stop you from living anywhere in India…
In China.. every person has to have a regional passport called hukou. If you want to migrate to some other place in China, then he will need a Visa to stay in that new place which is called zanzhuzheng. This is a temporary permit and to get a permanent hukou for your new residence, well, its a long legal process !
If you are a Chinese and are staying in a place other than your hukou jurisdiction without zanzhuzheng, then you will be arrested! Imagine getting arrested in India for moving from Bangalore to Bombay!
People bribe officials in China just to move across cities! Even if you have a zanzhuzheng for a long period no matter how long, it does not get automatically converted into a hukou! If the government decides that there are too many people working in a city, then they will just throw all the zanzhuzheng holders out of the cities !
Now tell me do you want world class Chinese cities? Or the great Indian democracy?
The picture of an economically rich, well developed China comes from the urban China.. No press and media access is allowed to the rural China where the real China lives ! Aren’t they their own Chinese people ? Is denying access to a developed life-style to its own people a symbol of economic growth ?
That is the basic difference between Indian Democracy and Chinese Autocracy.
In India influx into cities is allowed. And this forces the administration to setup suburbs and create more facilities.. Delhi got its metro.. Bangalore will get one.. Suburbs will be developed into independent urban centres.. satellite townships will be developed.. SEZ will be setup.. The process might be definitely slower than that of Chinese development.. but all the citizens have a say in it.. Nobody is denied their rights..
Even in India if you look at the people’s voice against government in these cases.. it is from the communist rules West Bengal.. incidents like Nandigram, Singur are from West Bengal..
Communist party of India and Communism in India is a big joke! They opposed modernisation for decades.. and today Buddhadeb suddenly wants all industries in Bengal.. And still claims to be a communist.. Has he read Marx, Lenin, Mao ? Only people who do not know the definition of communism will vote for parties like CPI and CPI(M). Even Infosys has finally said Good bye to its plans of setting up its operations in Bengal.
Then we have people talking about Corruption. India has a lot of corruption in the system . There is no fact denying it. But as and when we catch people with corruption, we have a independent judicial system here which can punish them. It may not be the case always. But then even the people have the power to vote corrupt politicians out of power! People can do protests. Anybody can file a PIL in the court. Media can expose the corrupt people! We can burn their effigies, hit them with shoes and what not…
Lets look at China.. Corruption goes unquestioned. Media is not free. There is only one party. There is no voting. Television companies are owned by the state. Any voice against the government (even if it is about corruption!) is not tolerated! People are sent to jails for decades together!
Well at this point let me make it absolutely clear. I am not talking against Chinese people. They are wonderful people with Buddhism in their hearts! It is the communist regime that I am an against. There is a need for the people of China to be liberated from their oppressive communist regime. Unfortunately, countries like US are dummy super powers who talk about restoring democracies only in weak countries like Iraq and Afghanistan.. When it comes to strong ones like China or even North Korea.. they prefer never ending dialogs Well, probably only a strong India can restore democracy in China.. We need to protect those people whom we gave Buddhism with love..
Coming back to corruption, according to the Transparency International’s Corruption Index, China is just 3 places ahead of India in the world corruption rating, India is at 74 and China is at 71 ! Who said there is less corruption in China?
The Indian system is transparent. Questions and debates are allowed. Opposition parties exist in India. The Chinese system is opaque. Questions are not tolerated and there is no opposition party in China!
If India were to follow the Chinese ‘no questions asked’ style of economic development India can overtake China in a no matter of time.. But what we want is a equal growth as much as possible at all levels of a society. We do not want two societies in one country, a rich urban vs a poor rural society, where the rural population can never get into the urban areas… which is exactly what China has today.
China has made its economic growth BECAUSE of its political leadership.
India has made its economic growth INSPITE of its political leadership.
Many of us know that in India 350 million people (of the 1 billion) live below poverty line. But how many of us know that in China 800 million people (of the 1 billion) are poor!
Another point worth to be noted is that
India is a young country while China is an old country.
In other words even though the population is almost same with one billion each for both India and China, Indian population is relatively young with over 70% being below the age of 30, while within the next two decades a majority of the Chinese population will be retired! Thanks to the China’s one baby policy, and with no such policy in India, India will have a young society full of energy and action, while most of China will be living on retirement pensions (provided their government gives it!)
The Indian model of economic growth is consumption oriented. Indian consumership is growing at a massive scale. Multinationals are setting up shops here for these consumers. There was a time when products used to be released in India decades after it was released in US. Today many a times products are launched first in India !
The Chinese model of economic growth is export oriented. Cheap exports! China promotes exports than consumerism! How many of you know that unlike the Indian rupee which is an open currency whose value is determined by the actual market trends… Chinese currency is controlled by the Communist government there. The communist government of China has undervalued its currency so lowly against US dollar that the Chinese people can afford to export products to US and other countries at a very low cost in international standards ! There is no real cheap cost of Chinese exports here, it is just a game of currency conversion mathematics.. This is the biggest artificial economic bubble.. The day the bubble bursts, the game is over!
Unlike India where due to its true economic growth the Indian rupee is becoming stronger and stronger against dollar day by day! It might slightly bring down our export earnings, but in the longer run will definitely prove to be beneficiary.. A stronger rupee means Indians can buy things anywhere in the world on par with developed economies! We dont have to spend crores of rupees then to buy a Boeing! We don’t have to pay tens of thousands of rupees for international air travels! A stronger rupee means greater international exposure! There wont be a difference between buying a Maruti and buying a Mercedes! One can go on a trip to the Grand Canyon just like the way one goes to Ladakh or Nepal ! How do you think american citizens are able to tour all over the world? Because they earn more? No. But because their currency USD is stronger.. and this is where a strong rupee will lead us to!
Will the Chinese with their undervalued currency have this privilege?
India’s unruly parliament, messy politics, dozens of political parties, protests, debates, all might portray a turbulent picture! But this is where the stability of India lies.. When people are allowed to express their anger, break glasses on the streets, burn effigies, etc any frustration in the society gets an opportunity to express itself.. there is no frustration built up in the society which over a period of time might burst one day in the form of a civil war
China might look like a stable nation with a direction.. but this is the opacity of its system hiding the inner turbulence which is growing over a period of time.. See these report Can you imagine something like this happening in India? The very next day the government will be out of power if it happens so..
China puts public interests (?) ahead of Individual rights. A flyover construction project cannot be stopped if one Individual’s house or a temple is on the way! It will be demolished.
India puts individual rights ahead of public interest. If a temple or a house is on the way then the project HAS to stop. The person can go to the court. Get proper compensation or the project will alter its route! The process might delay the project execution, but finally all its people are happy! There is no threat of civil wars.
Even minority voices (not in the religious sense, but minority in terms of public support!) might hold the public interest at ransom in India, but every individual person in India feels empowered. Indian growth might be initially a bit slower compared to Chinese… but once the entire India adjusts itself to the globalization wind, Indian growth will overtake Chinese growth within a fraction of time!
The story of India and China is like that of Hare and Tortoise… India might be slow.. but what matters is who reaches the winning point first
I am feeling sleepy now.. its late night… Now tell me, Tiger or Panda ?
