Why are Indians so “obsessed” with China? Can India with no maufacturing base compete with China. Only Service Sector jobs with no manufacturing jobs wont bring India’s economy to the level of China.
A Tale of a Rising Tiger Chasing a Soaring Dragon
As their nation booms, Indians can’t resist comparing stats with giant neighbor China.
By Henry Chu
Times Staff Writer
Posted May 1 2006
NEW DELHI — Politics and cricket may be the standbys of Indian small talk, but if you really want to get a conversation going here, turn the dial to China.
India’s northern neighbor is the hottest topic in town, the buzzword on everyone’s lips. Whether politicians or pundits, entrepreneurs or engineers, nobody here, it seems, can obsess enough over China.
Who has more people? China does, with 1.3 billion, though India ranks a close second, with just over a billion. Who has built more roads, bigger airports, taller skyscrapers? China again, by a convincing margin. But who boasts more billionaires? Chalk that one up for the home team, an edge that makes Indians puff with pride.
Such comparisons have become something of a national parlor game here as Indians increasingly look to China as the yardstick by which they measure their own progress and success. Excited by their country’s development boom, they are now eager to play catch-up with the economic big bang on the other side of the border.
" ‘Obsessive’ is a mild term for the kind of attention that China gets, and it’s always in terms of how many roads do we have, how many billionaires do we have," said Subarno Chattarji, a professor at the University of Delhi. “They are the role model.”
Newspapers brim with references to the Middle Kingdom, backed up by explanations, charts and graphs showing how India compares. Articles parse how India stacks up against China in foreign investment, literacy, Internet use, quality of higher education and even water distribution.
The fixation is fueled by a mixture of admiration, insecurity and rivalry. At root is the grudging recognition that China, for all its problems, remains the runaway leader on many fronts, in spite of India’s emergence as a high-tech colossus, the cascade of jobs created by Western outsourcing and the nudge into the middle class of millions of aspiring workers.
“China has been successful — let’s accept it. We want to emulate China no matter how we say we are different and want to be different,” said Chetan Ahya, an analyst with Morgan Stanley in Mumbai, formerly known as Bombay. “The fact of the matter is that they’re on top.”
Such a bluntly complimentary attitude isn’t without precedent. As long ago as the 7th century, a Chinese Buddhist monk returning from 17 years of travel and study in India asked, “Is there anyone in the five parts of India who does not admire China?”
In modern times, however, the relationship between the two countries has been marked more by mutual suspicion and, at times, outright hostility.
Although New Delhi and Beijing pledged lasting friendship in the 1950s — a popular slogan at the time, “Hindi-Chini Bhai Bhai,” proclaimed that “Indians and Chinese are brothers” — the two countries fought a border war in 1962. They gave each other the cold shoulder for decades afterward, each pointedly cozying up to the other’s enemies.
In 1991, India decided to dismantle some state controls to boost its economy. By then, China had more than a decade’s head start and was already embarked on its spectacular market-oriented growth.
Comparing the two Asian giants has since become a fashionable pastime among academics and Wall Street analysts who latch on to the obvious similarities: two ancient civilizations with billion-plus populations hauling themselves abreast of modernity, backed by talented entrepreneurs and cheap labor, with the added spice of atomic weapons thrown in.
China dwarfs India in most key respects. Its economy is more than twice as large, it receives 12 times as much foreign direct investment, and its exports are six times that of India’s. It boasts a larger infrastructure network, a more literate population and less abject poverty than India, where more than 350 million people eke out an existence on less than a dollar a day.
In terms of manufacturing, “made in China” still reverberates far more loudly across the globe than “made in India.” But India, even as it tries to whip its industrial sector into more competitive shape, is positioning itself as the yin to China’s yang.
Let Chinese workers churn out computers, refrigerators and cellphones, many Indians say, we’ll focus on the software — not just what goes into those computers but also the sectors such as the service industry, where a more skilled, better-English-speaking workforce gives India an edge. Foreign companies set up factories in China; in India, they invest in call centers and back-office service providers.
In 2005, industry accounted for 53% of China’s economic output and services 32%. The situation was flopped in India: 51% services and 28% industry.
“I think India feels there’s room for both of us, that both countries have their respective areas of advantage and that both will do well,” said Prabhu Ghate, a commentator here.
Greater confidence and boldness have taken root among Indians, who until a few years ago balked at comparisons with China, finding them not only depressingly to their disadvantage but a little scary, Ahya said.
“There was a sense of self-doubt in India …. People were not exactly as confident as you see them now,” Ahya said. "A lot of them did get worried about Chinese competition, that, ‘They’re going to kill me, they’re going to wipe me out,’ whether it’s motorcycles or color televisions.
“But that doubt did not turn out to be true. Indians have come through unscathed, and they’re able to protect their turf…. So now there’s the sense that we want to learn from them.”
Despite row upon row of Chinese-made appliances in shops here, the balance of trade between the two countries actually tips in India’s favor, mainly because China is buying up natural resources such as iron ore from India at a feverish pace.
But clashes are inevitable. Both giants, in the race to develop, are desperate for oil and have slugged it out for access to petroleum reserves in Central Asia, Africa and South America. China, having more cash, has won virtually all of those battles, including a nasty one last summer over an oil producer in Kazakhstan, which Beijing agreed to acquire for $4.2 billion.
But realizing that their bidding wars were driving up prices, the nations agreed in January to cooperate in securing reserves abroad, creating what one pundit labeled an “axis of oil.”
“It is clear to me,” Mani Shankar Aiyar, India’s oil and gas minister, said at the time, “that any imitation of the ‘Great Game’ rivalry [between the British Empire and czarist Russia for control of Central Asia] … is a danger to peace. We cannot endanger each other’s security in our quest for energy security.”
That doesn’t mean there isn’t room for a little gloating whenever India comes out ahead in any comparison with China.
“Here is something to brag about,” the Hindustan Times crowed in March when the annual Forbes list showed more billionaires in India than in China. And when the World Bank issued a study last year giving India higher marks for good governance, the Economic Times declared: “It’s official: Tiger governs better than dragon.”
As is often the case with underdogs, the preoccupation with comparisons seems mostly one-sided. “India hardly exists on the Chinese media horizon. They couldn’t be bothered, really,” said Chattarji, the University of Delhi professor. He visited Beijing in August and saw nary a mention of his homeland in the newspapers.
When Chinese Premier Wen Jiabao came to India a year ago, he was the subject of breathless magazine stories and front-page photo spreads. Trips by Indian officials to Beijing, by contrast, merit no more than the usual pro-forma coverage accorded foreign dignitaries.
That might change as India continues to grow and attract attention, and as its political profile rises.
“India figures less in Chinese discussion, but my sense is that it is rising and there is growing interest, especially as some leaders begin to see a U.S.-India axis emerging that might work to constrain China’s growth,” said Anthony Saich of the Asia Center at Harvard University.
“I do think the Chinese are fascinated by Bangalore” — India’s Silicon Valley — “and want to understand how this has been put together.”
Officially, Beijing welcomes warmer ties between Washington and New Delhi. But talk of their ganging up to keep China in check fans perennial fears of U.S. policies of containment.
At the same time, lingering resentment from the 1962 border war and distrust of China’s close relationship with Pakistan still color the rhetoric of some Indian politicians in discussions of their behemoth neighbor.
For now, China remains far more in India’s sights than vice versa.
“For a long time, the role models were Western countries, Europe and the U.S. And while Indians still think well of the U.S., it’s China and the Far East now that are the models,” Chattarji said. “This is the context for why the media and why even in normal conversation they’re constantly talking about this: How do we become like China?”
(INFOBOX BELOW)
Sizing up neighbors
Indians’ obsession with how their nation compares with China has become something of a contemporary parlor game. Here’s a quick measure (data for 2006 unless otherwise noted):
China India
Population 1.31 billion 1.09 billion
Median age 32.7 24.9
Population growth 0.59% 1.38%
Infant mortality 23.1/1,000 54.6/1,000
Life expectancy 72.6 64.7
Literacy rate 90.9% (2002) 59.5% (2003)
Total GDP (in trillions) $8.2 $3.7
GDP per capita $6,300 $3,400
GDP growth, 2005 9.3% 7.6%
Manufacturing (% of GDP, 2003) 39% 16%
Labor force, millions 706 406
Export goods and services
(% of world total, 2004) 6% 1%
Percentage living below $1/day 16.6% 34.7%
Electricity consumption
(kilowatt hours/person, 2003) 1,379 435
Internet users
(per 1,000 people, 2004) 75 32
Aircraft departures (2003) 946,000 264,000
Railways (miles) 44,675 (2002) 39,289 (2004)
Percentage of roadways paved 80% (2003) 63% (2002)
Sources: CIA World Factbook, International Monetary Fund, Foreign Policy, Deutsche Bank, World Bank