India vs China SnapShot

27 Comments

Lot of talk about India and China in the papers. US VCs and technology companies cannot stop raving about China. A little reality check! The divergent paths Bombay Stock Exchange and Shanghai Stock Exchange have taken. An old editor of mine used to say – pay attention to the ticker, the ticker can see the future. The breathless growth of China leaves Indian 4%-to-5% annual growth in dust, but short term money seems to think otherwise. These two economies have a direct bearing on the US economy – both in good and bad way.

Sramana Mitra: “It looks to me, therefore, that US, Europe and India are all headed for trade-deficit economies, while China reigns supreme as the trade-surplus nation.”

Silicon Valley is also tied into this nexus.

Previously on GigaOM

27 Comments

Avinash

i believe this is whats going to happen in the future for India and China

• Both will grow rapidly, taking a much larger share of global
GDP. Yet for the foreseeable future, it is likely that China
will continue to grow more rapidly than India. In both
countries, the domestic market will become increasingly
attractive to global companies.
• The division of labor between India and China will become
blurred as both countries excel in services and
manufacturing.
• Trade between India and China will expand, enabling
companies in both countries to achieve critical mass. For
global companies selling in these markets, this means more
local competition.
• Both countries will create new world-class companies that
will be competitive with companies based in the West. For
some Western companies, this will create new challenges.
• Both countries, while remaining relatively poor, will
experience rapid growth of the middle class, creating vast
new opportunities for Western companies to sell in those
markets.

yaromir

Most of the commentators need a reality check. You guys are living in the past bragging about how old your civilization is. Compare India with the US and answer yourselves a question whether India has the same charactersitics as the US to become the world’s superpower. The answer is clear – no. On regional level the comparison with China is also not favorable for India. India shines in IT and English is a big plus, but other than that – nada. India still has good chances to become a regional superpower in 50 years or so, I guess.

babu

There is no doubt that India will one day become a super power based on its population size, long and highly civilization and history. The question is when and how soon? We can answer by looking at china model. china can transform it in 30- 40 years. India is a bigger country than china. Its population will surpass china in 2015. Indian people have freedom and western thinking. I think India will surpass China in one decade (2017) . I would like to see India to conquer Tibet, Mongolia and the western muslim of china ( Xinjiang). India shining. India shining.

Janak De

Sam’s March 12th comments contain several errors.
“Everyone here” isn’t Indian. Other nationalities are professed.
Examples of present Indian superiority are private world-standard firms in IT, pharmaceuticals, steel, automobile parts. English language, freedom and democracy, rule of Law, free press, 5,000 years of high civilization, philosophy.Living standards are disparate in both countries.
Brazil is also three times larger than India and similar to China.

sam

I think everyone here is Indian. The fact that India has border with China does not mean India can measure up with China. I cannot think of anything that India is good at and can compare with China. India has a democatic government and capitalist, free economy and its people still live in poverty. India is not a big country. It is overpopulous with a land area slightly larger than Mexico. Its children is malnutrious and do not have enough food to eat. I don’t think India can measure up to Mexico or Brazil. Mexico and Brazil have the same land area as India, less people and have more natural resource. India and china have nothing comparative but I don’t know why all of Indian friend that I know always want to relate or talk about China, I guest it can make Indian look better in comparison with China.

biswanath roy

i think the people of two future super powers should not fight amongst each other.both the countries should respect each’s sovereignity& recognise their respective strong points.india must realise that the usa is using it against china for its own means.usa has never liked any country to progress so much that its gets beyond its clutches.earlier it was the soviet union which was usa’s no 1 enemy,2day it is china,iran,n.korea,venzuela etc.india china&russia should form a triumvirate to check usa’s interference in the internal affairs of other independent countries.who is the creator of taliban? usa talks&supports democracy,then why is it supporting gen musharaf in pakistan,why did its cia murder salvador allende of chile who had won a free& fair election,& thrust gen pinochet on the chileans.one has to admire mrs gandhi(indira)who freed & created bangla desh,giving a harsh slap on the american face. india&china united can completely change the face of this earth,& that is what the usa fears.

ASHWIN

Here Below is the evidence for prediction of india overtaking china

“However Luce also lists a number of opportunities and colossal advantages that India enjoys. Firstly the demographic profile is favourable. From 2010 China’s dependency ratio – the proportion of China’s working-age population to the rest – will start to deteriorate. India’s, by contrast will improve until the 2040s. In the next 20 years the proportion of dependents to workers will fall from 60% of the population to 50% which will give the economy a large ‘demographic dividend’. In 2032 India is projected to overtake China to become the most populous country in the world.

The higher workforce will also boost the savings ratio which will lift investment which in turn will boost economic growth. Already the savings rate has improving from 18% of GDP in 1990 to 26% in 2006. At this level it is still well below China’s 40%, but China’s is falling while India’s is improving. India is projected to overtake Japan as the world’s third largest economy in the 2020s.

Luce’s conclusion is that India is not on autopilot to greatness, but that it would take an incompetent pilot to crash the plane. He asks too whether the Indian tortoise will overtake the Chinese hare? For the investor in resources the question about which country will be the larger consumer is perhaps academic. “

ASHWIN

ACCORDING TO GOLDMANSACHS PREDICTION ON THE WORLD ECONOMY IN THE FUTURE THEY HAVE SAID THAT INDIA WILL BE RICHEST COUNTRY IN THE WORLD BY 2050 I DONT THINK THERE IS A BETTER EVIDENCE ON INDIAS GROWTH PROSPECT THAN THIS INDIAS INFRASTRUCTURE IS EXPECTED TO GET 350 BILLION US$ THIS YEAR FOR ITS IMPROVEMENT SO EVERYTHING IS GOING IN INDAIS WAY

ITS ABSLOUTELY UNANIMOUS THAT INDIA IS GOING TO BE THE BEST NO DOUBT AT ALL

sam

Come on guys, there is no comparison here. Chinese are smart, proud, self center and hardworking people . Indian are passive,lazy, outward minded people. China do their best for their county and don’t listen to the west that is why the west don’t like China. India always try to learn and copy as much from the west. China can make the different. India is just follower.
Just an opinion

indian

The idiots in Delhi totally squandered India’s goodwill and geo-political capital in Africal opening the way for the aggressive Dragon, ever intent on supplanting India’s influence everywhere, has been throwing her weight around by using her UNSC seat and burgeoning forex reserves of over $800 billion, as incentives and bargaining chips – “money talks, bullshit walks” – India’s short on the former and full of the latter. The blame rests with successive weak and myopic Cong govts whose stupid policies destroyed the economy, leaving India pauperized, unable to help anyone as she herself was abegging for aid. So much for the Left Front’s vision of India’s role in the world.
Well, you can be sure that China will win… The politicians of China are far more forward thinking that out useless ministers like Arjun Singh, Ramadoss who will promptly sell their countries interest for personal gains (the 27% reservation is the prime example).

Time for Indians (at least Forward Castes) to immigrate to China

Yash

[Well, it is hard to hear but it is true. India cannot catch up China in any field. China is ambitious and is a pride united nation with pride history and beautiful languages, hand writing and deep cultures. India is not a proud nation, not a proud culture an its language is obsolete but English. Buddhism is from Nepal, not from India. Only Hindu is from India and majority people follows Hindu is Indian. I don’t think India is a great country as compare to China. It is an over populous country and its land area is less than 1/3 of china’s. India has a long, dark, not so proud history. China is an interesting country, anything from history, cultures, foods, religion,…polictics..To compare India to China is like to compare a stone and a diamond. That’s it.
A Mexican boy.]
FOOLISH MEXICAN.CHINESE CIVILISATON IS 1000-2000 YEAR OLD WHILE INDIA’S GOES TO 5000-7000.
I DONIT SAY CHINA IS BAD BUT NOT BETTER.

Rajesh Sambhar

The comparison between India and China is inevitable given their geo-socio-political backgrounds. But I feel that these two giants can not be compared for they are distinct, different and are following their own path towards their destiny of becoming greater nations. China is a perfect example of what political leadership can do to the fortunes of their people and nation by following a strict regimen of socio-economic discipline. India on the other hand, unlike China, is a free, open and democratic set up. In a democracy with such Diversity and Plurality as India things move on based on evoloving consesus. India’s embrace to Economic reforms under the leadership of P V Narsimha Rao and Manmohan Singh in 1991 was purely a situational compulsion rather than a choice for better future. But since then, the reforms definitely worked for the Private Sector within the country and gradual opening up of the Indian shores to the Foreign Investment is really improving the Indian economy. Unlike China where the growth is government driven, the Indian growth is driven by the ever growing free spirit of Private Sector and hence you would want to imagine the growth potential India has. With high regards for China, I want to state here that the free liberal democratic spirit of India will definitely overwhelm the skeptical minds of India bashers one day. I dont want to compare the statistics of under-reported restrained India and inflated overstated China. I feel India and China can complement each other rather than seeing each other as competitors.

rajushakeel

How can India government explain the killing and genocide of thousand Muslim every year.

raju

O.K. India is number one and will surpass China.
Are all Indian happy now? Smile, Hahahaha
One several trips to China, i have visited Beijing, Shanghai and several cities in Guangdong provinces several times. The cities are so clean and so beautiful. I have admired Chinenes people, they have worked so hard to build their country. I am so sad for India even thought I am an Indian descent. Indian people are living in dream and like to flat each other. When can all Indian grow up and see the reality. The truth is hard to hear but will make you better. I am bitter because I cannot change the fact that I am still an Indian descent and I want India to be better .

shakeel

O.K. India is number one and will surpass China.
Are all Indian happy now? Smile, Hahahaha
One several trips to China, i have visited Beijing, Shanghai and several cities in Guangdong provinces several times. The cities are so clean and so beautiful. I have admired Chinenes people, they have worked so hard to build their country. I am so sad for India even thought I am an Indian descent. Indian people are living in dream and like to flat each other. When can all Indian grow up and see the reality. The truth is hard to hear but will make you better. I am bitter because I cannot change the fact that I am still an Indian descent and I want India to be better .

vinod patel

I still think india can surpass china in one day. The fact that no one can deny india is a country of wisdom and the land of god. India gave china buddhism, without india china have no religion. India gave kungfu to china . According to Chinese history, Kungfu was invented by Shaolin temple which was established by an Indian monk. India invented and gave to China lots , lots of philosophy and …India is like a master and China is like a disciple. India is a land of God, beautiful and freedom. China is a land of dictator and communist.

Sergei

I am sorry to say this but Idia is still one big mess. The have a younger population buttttt people in China live longer the average, besides the national IQ of China is estimated at 100(people of Hong Kong even 107) while the national IQ of India is 80 (http://en.wikipedia.org/wiki/IQandtheWealthof_Nations). And about Chinese goods Dont forget all the major brands like HP, Intel, Samsung, AMD, Microsoft, Even XBOX360 (atleast mine) Are made by chinese. If India wants to overtake China (which I dont see happining any time soon or not at all) it really has to improve its infrastructure. And while India is leading in infra structure China is focusing on energy like for example the biggest damn and the biggest solar powerplant. And for another example look at the biggest city of India (Mumbai) its really a scrap heap compared to Shanghai the biggest city of China, actually I can bet that Shanghai has more skycrapes (2900) than India has. And about IT, IT goods and software can be very handy indeed but it does not make a country a super power and about China economic growth allot of people suggest that it wil slow but the last 3 years it has only increased. And also peaople are saying for I dont how long that India is going to grow faster than China but When 10 years ago people said the same. So face the facts before India even wants to get close to China it should really take some major step because India still is a big mess. No hard feelings I think India is beautifull country ;-)

ashwin

BLOODY SHAKEEL DO YOU HAVE ANY COMMON SENSE HOW YOU SAY”Everything in India is made in China now” BLOODY IDIOT GOODS ARE BEING EXPORTED IN LARGE QUANTITIES FROM INDIA TO CHINA YOU HAVE SAID”If chinese good is not good, then India is a superpower in the future? What ’s reason is this”THEN WHAT IF CHINESE GOODS ARENT GOOD THEN COUNTRIES LIKE PAKISTAN,AFGHANISTAN WILL BECOME SUPER POWER?IDIOT INDIA IS THE SECOND FASTEST GROWING ECONOMY .IF YOU DONT KNOW ANYTHING SHUT UP AND BE QUIET OK

ashwin

MR SHAKEEL .YOU ARE AN IDIOT .IN THE WORLD THE TWO COUNTRIES LEADING IN GDP GROWTH ARE INDIA AND CHINA 9% AND 10% RESPECTIVELY .AND INDIA IS EXPECETED TO BEAT CHINA IN THE COMING YEARS OWING TO YOUNGER POPULATION WHEREAS IN CHINA THE PEOPLE ARE OLDER OWING TO THE ONE CHILD POLICY PLEASE THINK BEFORE SPEAKING

TO THE MEXICAN BOY

PLEASE BE CAREFUL IN YOUR COUNTRY MANY COMPANIES ARE CLOSING UP SHOPS IN WEST INCLUDING MEXICO DUE TO COSTLY LABOUR AND HAS LOST ITS COMPETETIVENESS PLEASE GO TO GOOGLE.COM AND SEARCH”WORLD IS FLAT” AND YOU WOULD COME TO KNOW WHAT INDIA IS GOING TO BE IN THE FUTURE .WE SHOULD BE PROUD OF INDIA AS INDIAN COMPANIES ARE ACQUIRING ALL WETSERN COMPANIES FOR EXAMPLE TATAS ACQUISITION OF CORUS AND ETC…

john mitchell

Well, it is hard to hear but it is true. India cannot catch up China in any field. China is ambitious and is a pride united nation with pride history and beautiful languages, hand writing and deep cultures. India is not a proud nation, not a proud culture an its language is obsolete but English. Buddhism is from Nepal, not from India. Only Hindu is from India and majority people follows Hindu is Indian. I don’t think India is a great country as compare to China. It is an over populous country and its land area is less than 1/3 of china’s. India has a long, dark, not so proud history. China is an interesting country, anything from history, cultures, foods, religion,…polictics..To compare India to China is like to compare a stone and a diamond. That’s it.
A Mexican boy.

shakeel

Injia, your reason shows that you are as stupid as a cow. If chinese good is not good, then India is a superpower in the future? What ‘s reason is this? How is Indian good? You mean Indian good is durable and good quality? Go back to India and see what can India make? Everything in India is made in China now, and India even cannot make a Toilet. Chinese goods is not good now but at least it can make everything now and practice make perfect, its quality is better over the time as Japanese or Korean goods.

ashwin

Injia will beat china due to quality products .Chinese products dont have durability and thats why India will be the superpower in the future

Deepak Singh

Dear Om mallik
it dose seem after readin the article that you really know nothing and have just no idea of the change which is going on in the india.
Just sitting in the US and saying india is not good has been the foolishness of many a indians and i understand that as the government is becoming more representative of the people and the ways are changing it is difficult to digest and comprehend the great ness of India.
It is rising and it will be a great power but remember that india is the land of Buddha and Ram and Gandhi so its ideals are diffrent and so the results will be different.
China was always a great military power and was a untified state and while india was a great knowldge powwer

Ron

well, not EVERYONE in US industry ;-) but i couldn’t agree more, the race for new geographic markets is the one to watch at the moment

Om Malik

the most interesting thing about this whole debate is that china is now on the lookout for new markets. this has serious implications for US brands and unfortunately the US industry is sleeping and twidling its thumbs. oh well

Ron

I don’t think the enthusiasm around China has fully run its course, but more and more people are seeing India as a market, and not just a source for cheap brains. Also, in the battle between China and the US for economic hegemony in Asia, India could play the role of king-maker.

the yukon

Om, While you are talking about the stock market, here is the realities. China wants a lot more than it is willing to give. And India doesn’t know what to do.

“If Delhi doesn’t think out of its box, C in Saarc may end up standing for China”
http://www.indianexpress.com/full_story.php?content_id=68051

Peking duck outscores Bombay- http://www.indianexpress.com/full_story.php?content_id=68085

When’s india’s geopolitics strategy has no direction, why do you expect it to have direction in the economic area?

In about 3-4 years china will acquire a trade surplus with india. china’s export basket is full and much more diversified than india’s who’s only talkable export other than raw materials is IT.
To see what is going to happen in 3-4 years, you only need to look at china’s exports to the us.
China wants a fta with india because it can exploit the fta to a much greater extent than india can. And we still haven’t even taken into consideration indian bureaucracy and corruption.

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