This is an archived blog post from The Acorn.
To meet the target set by its current five-year plan (2002-07), India would need to achieve an improbable average annual growth rate of 8%. That is the minimum required to provide jobs and the chance of prosperity to its swelling population. Such a growth rate would also give India’s statesmen another cherished prize: bragging rights over China.
Since living standards in China overtook India’s more than a decade ago (see chart), the Chinese economy has grown roughly twice as fast as India’s. As a destination for foreign direct investment, China has in recent years proved five times as popular as India.
Indian reactions range from denial (“lies, damn lies and Chinese statisticsâ€), anger (“it’s easy if the government’s a dictatorshipâ€) and paranoia (“they will take all our jobsâ€) to a perverse sort of pride (“we may be slow and cumbersome but at least we live in a democracyâ€). In some quarters, however, 2004 is billed as the year when Sino-Indian relations move beyond the mutual suspicion that has characterised them ever since they fought a border war, which China won with embarrassing ease, in 1962.
A visit to China by India’s prime minister, Atal Behari Vajpayee, in 2003 brought home how much the two countries have in common, both in fear of an American-dominated world order and in economic aspirations. The worry that China might one day dominate even markets where India has a seemingly secure niche—such as it services—yielded for a while to the potential for co-operation. The world’s most successful centres of, respectively, low-cost manual labour and low-cost English-speaking services ought to have complementary strengths. The Economist World in 2004 The Economist predicts that politics will get in the way of closer economic relations. But I think it will be the other way around: closer economic ties will compel India and China to take a non-antagonistic view towards each other.
If you would like to share or comment on this, please discuss it on my GitHub
Previous © Copyright 2003-2024. Nitin Pai. All Rights Reserved.