India struggles to catch China

India struggles to catch China

BBC’s Rupert Wingfield-Hayes

By Rupert Wingfield-Hayes
BBC News, Delhi and Beijing

The rapid growth of the Indian and Chinese economies have transformed the two countries in recent years. But this prosperity has also brought other problems.

Beijing skyline
Heavy investment has turned Beijing into a modern city
I think it was in 2003, that the world suddenly woke up to China.

I am not sure what caused it to happen, what particular event or news story. I just remembered the phone in the BBC’s Beijing Bureau started ringing and it has not stopped since.

Well now it is happening again and this time it is not China, it is India.

Every time you turn on the television or pick up a magazine, it is no longer the rise of China, it is now the rise of China and India.

The desire to make comparisons is understandable. Both have more than a billion people. Both are growing at 10% a year.

Delhi is an overwhelming experience. It is as if all of humanity has been squeezed into one city
There are, I suspect, many who are hoping that India, with its freedom and democracy, will win this new race to become the next economic super power. I am not so sure.

I have spent the last eight years living in Beijing, and only four days in Delhi, so comparisons are difficult.

But the few days I recently spent in India made me look at China in a new light.

‘Shocking experience’

Crowds of people and traffic in New Delhi
Over 15 million people live in Delhi
Delhi is an overwhelming experience. It is as if all of humanity has been squeezed into one city.

The streets groan under the weight of people. The air is filled with deafening noise and sumptuous smells.

Switch on the television and it is the same.

Between channels blasting out voluptuous Bollywood love stories and pop videos, an endless stream of news channels dissect the latest political scandals, and debauched lifestyles of the rich and famous.

Coming from China it is an almost shocking experience.

But after the initial delight at being in an open society, I started to notice other things.

Foreign tourists stared in bewilderment; locals with the resigned look of those used to waiting
The hotel was expensive and bad. In my room I searched for a high speed internet connection, a standard feature in any hotel in China. There was not one.

Then with the night-time temperature still well above 30C (86F) the power went out.

I lay for hours soaked in sweat trying, and failing, to get back to sleep and wishing I was back in Beijing where the lights never go out.

But getting back would not be easy.

Passenger queues

I looked at my plane ticket. Departure time 0315. Surely that could not be right.

I called the front desk. “That’s correct sir,” he said, “the airport is too small so many flights from Delhi leave in the middle of the night.”

He was not joking.

My taxi struggled along the Jaipur road towards the airport.

The two-lane road was clogged by an endless convoy of lorries. Finally I arrived at Indira Gandhi International airport. Despite the hour it was teeming with people.

The queues snaked around the airport and back to where they had started.

Foreign tourists stared in bewilderment. Locals with the resigned look of those used to waiting.

I could not help feeling a sense of relief at being back in a country where things work
“Is it always like this?” I asked a man in the queue ahead of me.

“Pretty much,” he sighed.

I was finally shepherded aboard the flight to Shanghai.

Next to me sat a friendly looking Indian man in shorts and running shoes.

“Is this your first trip to China?” he asked me.

“No,” I replied, “I live there.”

“Really,” he said, his interest piqued, “what should I expect?”

“I think,” I said, “you should expect to be surprised.”

Jaw dropping

Six hours later, our plane taxied to a halt in front of the soaring glass and steel of Shanghai’s Pudong International Airport

A poor child sits on the street in New Delhi (Photo: Manpreet Romana/AFP/Getty Images)
In Delhi I had been shocked to see thousands of people sleeping rough on the streets every night, nothing but the few rags they slept in to call their own
As we emerged into the cool silence of the ultra-modern terminal, my new companion’s jaw slid towards his belly button.

“I was not expecting this,” he said, his eyes wide in wonder. “Oh no, I definitely was not expecting this”.

I also found myself looking at China afresh.

Later that day as I drove home from Beijing airport along the smooth six-lane highway I could not help feeling a sense of relief at being back in a country where things work.

And it was not just the airports and roads.

Driving through a village on the edge of Beijing I was struck by how well everyone was dressed.

In Delhi, I had been shocked to see thousands of people sleeping rough on the streets every night, nothing but the few rags they slept in to call their own. Even deep in China’s countryside that is not something you will see.

In Delhi I had been told of the wonders of India’s new economy, of the tens of thousands of bright young graduates churning out the world’s latest computer software.

I thought of China’s new economy, of the tens of millions of rural migrants who slave away in factories, making everything from plimsolls to plasma televisions.

And of the same rural migrants, heading home to their villages at Chinese New Year festival loaded down with gifts, their pockets stuffed full of cash.

China is not a free society, and it has immense problems. But its successes should not be underestimated.

They are ones that India, even with its open and democratic society, is still far from matching.

Re: India struggles to catch China

Well written. It's all true. India is still struggling.

  1. Internet connections are bad. When ever it rains in excess expect to lose interent connectivity and cable connections.

  2. Poverty is mind-boggling. No where in the world you would see so much poverty.

  3. Corruption is rampant.

  4. Infrastructure is horrible. No good roads, traffic jams, pollution etc.

Yet you find amazing work being done in India. The work done in Research and Development, Outsourcing, Medical Tourism, Animation, Medical Transcription you name it the work for most Westerm countries is done in India.

Well the world cannot avoid India. With the European population shrinking, India has the largest English speaking human capital.

One thing, India is progressing because of it's people and not because of Government (unlike China).

Lastly, Indians are extremely confident about the future of their country.

Re: India struggles to catch China

The only way India can prosper and catch up to China is by their government. Indians are very ambitious just like everyone but their population faces many obstacles. Poverty, health care and infrastructure are horrible. The coming years are very crucial to Indian progress, if their government cleans up its act and starts investing and takes care of its people, we will see a new and improved India. If they do not, people will start loosing hope and things will go back to its normal place. Rich people will keep getting richer and poor will be left behind. One thing is for sure, as long as fanatical parties are present, India will never make it.

Re: India struggles to catch China

At one time China was consuming more cement/iron than the rest of the world put together. That should give you an idea if its growth, they build their infrastructure betwwn 10 to 15 years.

The fiollowing is an eye witness account of an American tourist who went to both India and China.. What he has to say about India I will post latter but this is what he has to say about China.

From Kevyn Jacobs' travelogues:

We arrived in Shanghai, China, in the wee hours of the morning on Oct.
4, so I was asleep when the ship docked. That was a shame because I
always enjoy standing on deck and watching our approach to a new city.

I don't know what I expected of my first glimpse of China, but what I
saw when I looked out my window wasn't anything even close to what I
imagined. There, directly across the Huangpo River, was this huge,
futuristic-looking structure that would have been at home in "Buck
Rogers in the 25th Century." It turned out to be the Pearl of the
Orient TV tower, Shanghai's most recognizable landmark and the tallest
structure in Asia. I've never seen anything quite like it, except,
perhaps, in a Jetson's cartoon.

The rest of the city's skyline was not at all what I expected.
Skyscrapers are going up everywhere. The entire city seems to be one
giant construction area. I've never seen so much construction in my
life.

The next thing to shock me was the number of huge neon advertising
signs that peppered the skyline: Sprite, Phillips, Volkswagen, Fuji
Film. China is definitely open for business, and the international
corporations are taking advantage of it. It seems the Chinese
government has taken a long, hard look at Hong Kong and seen what the
Chinese people were capable of under a free-market system. So they've
opened the Chinese market, and a phenomenal amount of foreign capital
has started flowing into China, hence all the construction.

But getting off the boat, I found the old China still there. Between
the shiny, glass and steel corporate office buildings are polluted,
crowded streets, lined with dingy, decaying buildings built under 40
years of communism. This is the old Shanghai. It is being eradicated
by the city's incredible new growth, but it's definitely still there.

Probably the most unpleasant thing about Shanghai is the smell. The
smog is extreme, and the rivers stink like a cesspool, clogged with
the raw sewage and trash of a billion people. Environmental concern is
one area in which Shanghai has a long way to go.

The exchange rate of 8 yuan to the dollar makes almost everything here
cheap. I spent about $150 in five days in Shanghai - including food,
souvenirs, postage back to the states, taxi rides and admission fees
to tourist sites. In Japan, I spent close to $100 a day.

Soon after we docked in Shanghai, close to two-thirds of the shipboard
community boarded buses to catch a flight to Beijing. The optional
trip to China's capital was pretty expensive, so some students, like
myself, opted to spend our whole time in Shanghai. We called ourselves
"The Shangolition," and we had the ship pretty much to ourselves for
several days. It was nice to focus and reflect on Shanghai without
having to contend with the crowds on-ship. There were enough crowds to
contend with in the city.

And crowds there certainly were. With a population of more than 1.3
billion, China is renowned for its population problems. It kind of
puts you in awe of China to think that one person out of every five on
this planet is Chinese.

On my first day in Shanghai I took a guided tour of the city, visiting
the Yu Yuan gardens, the famous Jade Buddha temple and the
government-operated "Friendship Store," where foreigners are invited
to buy all sorts of Chinese and imported products at reasonable
prices. I also went to an acrobatics show, which turned out to be one
of the best parts of my visit. The Chinese have a reputation for
producing fantastic acrobats, and this was certainly the case:
jugglers, tumblers, contortionists and balancing acts all seem to be
done with incredible ease.

Right next door to the acrobatics show was Shanghai's own Hard Rock
Cafe. A sizable number of Semester at Sea students went to Hard Rock
while we were there, some every night. They preferred the
American-style food and atmosphere to urban Chinese places, and the
arguments got heated when the students who came to China to experience
China accused the students who went to Hard Rock of having come on the
trip just to party. "Why come to China," the argument went, "if all
you're going to do is hang out at the American party places?"

Needless to say, the issue was not resolved and the student life staff
had to tell everyone to drop the issue and stop harassing those who
feel compelled to keep going to American-style establishments. So much
for harmony among college students.

On Sunday morning, I made a trip to the People's Park to what is
called "English Corner." This is a small part of the park where
Chinese people practice their English. They were, of course, delighted
to have a native speaker's help, and I met some wonderful people in
the process.

I met a university student named Gu Ming. Gu is studying electrical
engineering at Shanghai Jiao Tong University, and he spoke very good
English. We had some interests in common, and we ended up spending the
whole day together, so he had someone to speak English with and I had
a native guide. He took me to lunch at a delightful little
hole-in-the-wall noodle shop run by Chinese Muslims from Lan Zhou
province, showed me around his university and let me check my e-mail
at his university's computer center. He also introduced me to his
girlfriend. The three of us had dinner together at a traditional
Chinese dumpling restaurant, and I promised to keep in touch with him.
I had made a friend in Shanghai.

The next day I took a special tour titled "Tasting the Life of a
Typical Shanghai Citizen," one of the trips sponsored by Semester at
Sea. We visited an open-air fish and vegetable market, a grocery
store, a kindergarten and a community center. We were invited to visit
a "typical" family in their home and have a meal. That was pretty
neat. Mr. Min and most of his family spoke no English, but their
niece, a college student, did. So we talked with her. Everyone else
just nodded and smiled and said "Hao chr," which means delicious food,
and it was.

The following day, I went with a group to a local maternity hospital
to learn about family planning in China. With one-fifth of the world
population to feed, China is big on birth control. Laws for city
dwellers are very strict - only one child is allowed per family. Women
who become pregnant with a second child are strongly encouraged to get
abortions, and if you violate the one-child law, you face stiff fines,
ostracism and possibly even losing your job.

To most Westerners accustomed to total reproductive freedom, this
might seem rather harsh, but to me it is the most logical and humane
approach for the Chinese. You have to imagine what it would be like if
everyone had the freedom to have multiple children and this caused
those children to starve to death. From that perspective, it is far
better to have only one child who flourishes than have multiple
children who suffer. But it always gives me pause to look at the
people of Shanghai and realize almost none of them have siblings.

My last day in Shanghai turned out to be a bit of a disaster when I
learned the hard way that China is not designed with very tall people
in mind. At 2 meters tall (6 feet 7 inches), I certainly stand out in
a crowd. While walking back to the ship, I blindly walked into a
window air conditioner hanging above the sidewalk. The collision
caused a deep gash in my scalp, which bled profusely.

When I got back to the ship, leaving a substantial trail of blood
behind me, the nurse on duty sutured up my head - seven stitches in
all. Good thing I had gotten my tetanus shot at Lafene Health Center
on campus shortly before I left.

I spent the rest of the day on ship, recuperating, writing postcards
and regaling the students returning from Beijing with stories of how I
was attacked by an evil Chinese air conditioner.

Seeing China in the midst of such a huge transition was fascinating. I
think I would like to return here in 10 or 20 years to see how much it
will change. I hope the changes will be for the best.

Re: India struggles to catch China

China has been growing at a rate of 7% - 11% for the last 3 decades. Just recently its growth rate touched the double-digits mark. India will not be able to catch up to China, let alone, it cannot even reach the double-digit growth mark right now.

Re: India struggles to catch China

Panoramic view of Shanghai at Night

Re: India struggles to catch China

If China maintains its current growth rate by 2030 projected Chinese per capita will be $32669, With 1.4B people living the life of first world will be a disaster for natural resources...

Ah yes but its dumb to try and predict the future who knows whats gona happen.

Year PPP PPP per capita Population

2004 $7.75 trillion $5962 1.3 billion
2005 $8.37 trillion
2006 $9.04 trillion
2007 $9.76 trillion
2008 $10.54 trillion
2009 $11.38 trillion
2010 $12.30 trillion $9111 1.35 billion
2011 $13.16 trillion
2012 $14.08 trillion
2013 $15.07 trillion
2014 $16.12 trillion
2015 $17.25 trillion $12591 1.38 billion
2016 $18.46 trillion
2017 $19.45 trillion
2018 $21.13 trillion
2019 $22.61 trillion
2020 $24.19 trillion $17279 1.40 billion
2021 $25.89 trillion
2022 $27.70 trillion
2023 $29.64 trillion $21171 1.40 billion
2024 $31.71 trillion
2025 $33.93 trillion
2026 $35.97 trillion
2027 $38.13 trillion
2028 $40.42 trillion $29079 1.39 billion
2029 $42.84 trillion
2030 $45.41 trillion $32669 1.39 billion

Re: India struggles to catch China

This is from ECONOMIST. Without more reforms India will struggle to catch with China.

THE Indian tiger is on the prowl. This week, in an apt piece of symbolism,Tata Steel, which dates back to the days of the Raj, leapt into theleague of top producers when it bought Britain’s Corus, which includesthe steelmaking remnants of the old imperial power. Nor is Tata alone:younger Indian companies such as Infosys and Wipro are storminginternation al markets. Meanwhile, the world’s business people andinvestors queue up to lavish money on India’s talented engineers andcomputer scientists,

The roar from Delhi is echoing across Asia. After peevish years cast as China’sunderperform ing neighbour, the huntress is now in hot pursuit. Over thepast year the Indian economy has grown by an impressive 9.2%, not farbehind China’s 10.4%. At some point this year India’s growth rate couldeven outpace China’s; and if you measure things by purchasing powerparity, India should soon overtake Japan and become the third-biggesteconom y, behind only America and China.

No wonder anincreasing number of Indian businessmen, policymakers and economistsare basking in the belief that their country is burning bright havingat last broken free of its bureaucratic cage. An economy once famousfor the “Hindu rate of growth”, of 3% a year, was opened up by thereforms of the 1990s, many of them pushed through by the man who is nowprime minister, Manmohan Singh. His government’s latest five-year planassumes that India can sustain average growth of 9%. Who can doubt"Incredible India", to borrow the slogan of its tourism campaign?

Tweaking the long tail
Fast grow this essential to pull millions of Indians out of poverty, so it is sadto pour cold water on this story. But that is precisely what is neededwhen there are so many alarming signs of overheating (see article).Across India prices are rising fast, factories are at full capacity,loans are piling up. Yes, the economic reforms of the early 1990sspurred competition, forced firms to become more productive and boostedIndia’ s trend—or sustainable—rate of growth. But the problem is thatthis new speed limit is almost certainly lower than the government’sone. Historic data would suggest a figure not much above 7%—well belowChina’s 9-10%.

When you mention overheating, many analysts point towards China. Yet Indiadisplays far more symptoms of the disease. Inflation has risen to 6-7%(compared with 2.8% in China); a record 99% of Indian firms report thatthey are operating above their optimal capacity; and credit isexpanding at an annual rate of 30%, twice as fast as in China. UnlikeChina, India also has a widening current-account deficit—a classic signof overheating, as domestic output fails to keep pace with surgingdemand. And if you are looking for a stockmarket bubble, Indian shareprices have risen more than four-fold over the past four years, farmore than in China. If something is not done, then a hard landing will become inevitable.

The Reserve Bank of India has been too timid in cooling down domestic demand:although one interest rate was raised this week by a quarter point, theoverall rise in rates over the past two and a half years has not evenkept up with consumer-price inflation. But the main focus of thegovernment’ s attention should be on supply—and dismantling the manybarriers that keep its speed limit below China’s.

So far,reform in India has focused on setting its inventive private sector free from the world’s most fearsome bureaucracy. This has unleashedentreprene urial talent, but more change is needed. Now is the time totackle the public sector itself. Infrastructure, such as roads andpower, and public services, such as education and drinking water, arewoefully inadequate and limit growth. Even as the economy has beenbooming, many public services have worsened. It seems incongruous thatsomebody can own a mobile phone, yet has to waste hours queuing fordrinking water. India’s top computer scientists are feted around theworld, yet most children in rural areas lack the basic education neededto find more productive work. Around half of all Indian women areilliterate, compared with a ratio of around one in seven in China.

Singh’s songsheet

India’s rulers have two bad excuses for not dealing with those roads, schools and hospitals. The first is theoretical. Many Indian economic commentator s say that further structural reforms, though desirable, arenot essential to keep the economy growing at 8% or more because of the"demographic dividend". A fast-growing working population and a fallingdependency rate (thanks to a lower birth rate) will ensure moreworkers, more saving and hence more investment.

India’s demographic structure is indeed starting to look more like that in East Asia when its growth took off. But this mechanistic view of growth assumes that demography is destiny and that economic policies do not matter. In fact, open markets, education and investment, especially ininfrastructure, were the three chief ingredients of East Asia’ssuccess. Population growth by itself does not add to prosperity, unlessyoung people are educated and new jobs are created. India needs toreform its absurdly restrictive labour laws which hold back theexpansion of manufacturing particularly.

The second excuse for doing nothing is practical: there is little room to spendmore on schools and hospitals. India already has one of the biggest budget deficits among the large emerging economies (as much as 8% of GDPgoing by the widest measure). In fact, plenty can be achieved by reform, rather than just spending. Private investors are hesitant about putting money in infrastructure, because the regulators are notindependent enough of populist politicians to guarantee a decentreturn.

If thesethings can be tackled, India can indeed match China’s growth. Mr Singh remains a reformer, but his government relies on the support of the communist parties and, with today’s prosperity, there is no stomach to take them on. The worry is that today’s overheating will need to boil over before that mindset changes.

Re: India struggles to catch China

You've written a little bit well that India is trying to catch China in prosperity and development, but it is not so much smooth and fluent to pursue China because there are so many differences between the economy of China and India.

Re: India struggles to catch China

India today is about where China was a decade ago. Back then, China’s economy was shifting into overdrive, but its roads and power grid weren’t up to the task. So Beijing launched a massive upgrade initiative, building more than 25,000 miles of expressways that now crisscross the country and are as good as the best roads in the U.S. or Europe. India, by contrast, has just 3,700 miles of such highways. It’s no wonder that when foreign companies weigh putting new plants in China vs. India to produce global exports, China more often wins out.

China’s lead in infrastructure is likely to grow, too. Beijing plows about 9% of its GDP into public works, compared with New Delhi’s 4%. And because of its authoritarian government, China gets faster results. “If you have to build a road in China, just a handful of people need to make a decision,” says Daniel Vasella, chief executive of pharmaceutical giant Novartis (NYSE:NVS - News). “If you want to build a road in India, it’ll take 10 years of discussion before you get a decision.”

http://news.yahoo.com/s/bw/20070309/bs_bw/0712b4026001

Re: India struggles to catch China

Some of the observations are quite right. Metro network for New Delhi was envisaged about 25 years back but got into implementation during last 3-4 years.

new

Re: India struggles to catch China

:biggthumb Delhi a super city by 2010!](Delhi a super city by 2010!)