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Updated: November 30, 2010 15:15 IST

China or India? Hedging bets

A. Madhavan
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Dynamic China and an India hastening rather far behind have captured world attention. The two countries, home to over a third of humanity, are — to use President George W. Bush’s words — shifting the global system “inevitably towards Asia.”. They have cannily weathered the recession that has bogged down advanced countries. China’s emergence as the world’s second largest economy, displacing Japan, matches its advent as a major power with sophisticated civil and military technology, towering cityscapes, and marvels like the railway to Lhasa. India’s rise is no threat, except that the faster growth of the two neighbours could upset the precarious climate balance of the earth by more greenhouse gas emissions.

Raghav Bahl, the entrepreneur-communicator who founded Network 18, adopts the clichéd analogy of a race between China and India and teases out the fable of the hare and the tortoise in bizarre variations. (Witness: “The turbo-charged hare was miles ahead of the sputtering tortoise.”) If this is a race, it has no finishing line and no time limit. Bahl jazzes up the book with a metaphorical menagerie: the dragon and the elephant “make a nest with the eagle”. And India is a “half-asleep, half-stirring tortoise-elephant”!

This apart, the author’s sector-wise comparison is replete with capsule narratives of the divergent routes taken by China and India. He backs every comparison with telling figures. Notably, China’s GDP is four times that of India. He admires China’s advances, but does not spare criticism of its dominant state corporations, high public debt, suppression of dissent, widening inequalities, command economy, property boom, reckless bank lending, dubious statistics, export model of growth, and so on.

A strong votary of private enterprise, he deplores India’s dirigiste economic policies that have choked innovation and its timid, risk-averse attitude to ambitious investment in infrastructure and energy. He lauds the liberalisation of the Indian economy since 1991, particularly those enterprises boldly competing with established foreign brands. His racy, analytical chronicle of the past — scams and reforms included — is a virtual refresher course for readers who have but a dim impression of the different routes to modernisation the two countries have taken.

The book offers crisp expositions of the evolution of India and China in different areas, such as geopolitics, demography, economic foundations, urbanisation, infrastructure, and social reforms. At every turn, the author pauses to see which country is ahead. India scores by virtue of its youthful population as against China’s older citizenry, but the advantage will get dissipated unless India is able to sustain its economic growth to generate more jobs and upgrade skills for increased productivity. It must hugely expand and deepen its human investment in education and public health. China has so far done better in raising its millions from the mire of poverty. India has an asset in the vast English-knowing population, but China is catching up, as it does in the IT sector.

China’s regimented polity under the Communist Party’s control is often contrasted with India’s democracy and fundamental rights. Deng Xiaoping released the dammed up power of private enterprise and let a new kind of state capitalism evolve, with China’s distinctive stamp — a system based on economic freedom, but without political freedom. Land in China belongs to the state: hence mega projects could be executed in Shenzen and Shanghai without the disruption and civic unrest of the type India encounters while trying to implement projects that are even far less ambitious.

Can an authoritarian state speed up economic development better than a democratic one? Must economic and political freedoms run parallel to endure? In a two-page epilogue, Bahl abruptly reverses his initial hunch that China’s ascent would “be capped unless it mutated into a reasonably free and transparent country”. Here, he says he believes that China is capable of raising its people to prosperity before opening up civil society. Likewise, he calls the faith he had earlier expressed in India’s democratic strength an “overestimate”. “While its civil society is soaring with genuine aspirations, its state is deeply dysfunctional.” In the end, he hedges his bet on the winner of the race with risk-averse fifty-fifty prediction. The book is a slick discourse, letting readers decide how India and China will fare in the next few decades.

The race is not for the swift, perhaps. But India has to compete with China for access to oil, gas, markets, and technology for sustaining the growth momentum. Nationalism has trumped communism in China, but the world hopes it will not turn chauvinistic and go against its slogan of “peaceful rise”.

SUPERPOWER?-The amazing race between China’s hare and India’s tortoise: By Raghav Bahl; Published by Penguin Books India. Price Rs.699.

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