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© 2012 Sanjeev Sabhlok's revolutionary blog
HSBC predicts that "half of China's emerging market trade will be settled in yuan within four years. When that happens, it will be one of the top three trading currencies in the world." [Source]. More importantly, "If there's to be a rival to the US dollar as the world's reserve currency in the 21st century it would have to be Chinese yuan". No one is saying that of the Indian rupee.
China is now ready to produce nearly 800 million tonnes of steel in a year (India will produce 120 tonnes in 2012). [Addendum: India produced only 68.3 million tonnes of steel in 2010, so this figure of 120 MT looks doubtful]
In 1980 China's share of real world GDP (PPP basis, source: IMF) was 90% of India's. Today is it nearly three times that of India.
(Note: The last section of the chart is not to scale. The slope of the Chinese and Indian "growth" curve between 2010 and 2016 is steeper than what is depicted. Note also that this is not a "growth rate" curve, but a dynamic share of world GDP. It gets harder and harder to achieve larger "market share" in an expanding pie. China will displace USA by 2016 as the world's largest economy, which would have gotten relatively smaller by then – not absolutely smaller.)
Let's just say this, that China is not fooling around the edges. It means business.
The Indians, on the other hand, are definitely fooling around the edges.
A lot of effort is being wasted today on the so-called anti-corruption movement driven by the whims of a half-baked Gandhian and a yogi who wants to take India to the medieval ages. Their actions have ZERO relationship to the fundamental reforms in policy and governance that India desperately needs, reforms that will eliminate corruption far more effectively than any of the 'reforms' being touted by this so-called anti-corruption "movement". The challenge before India is simply NOT within the capacity of populist Vedic socialists and Gandhians to deliver.
In the meanwhile, the socialist Congress is establishing its hold effectively through the hustings. India's future is therefore looking more and more questionable.
India simply can't continue to cruise based on the economic reforms that IMF forced down India's throat in 1991. That medicine is over. Its life was limited, its potential constrained by mis-governance and other policy problems. Yet few are interested in the deeper set of reforms that India needs.
With reforms it will be relatively easy for India to catch up with China, given its advantage of stability, democracy, and the English language. I've been trying to suggest these reforms since 1998. FTI has been offering these to India since 2007 (subject to assembling a competent leadership team).
Should you be interested in India's catching up with China then please join FTI or otherwise support it. Else India could well end up as a colony of China.
Addendum
"Only 53.4% children in the fifth standard in rural India can read a second standard level text; the proportion of first standard children who could recognise numbers from 1-9 declined from 69.3 % in 2009 to 65.8 % in 2010; children in the fifth standard who could do simple division problems also dropped from 38 % in 2009 to 35.9 % in 2010." [source]
A discussion on India and China today by Pradeep Taneja
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Dear Sanjeev,
That China has left India far behind is a known fact to any serious observer. If we ever wondered what the nineteenth century west must have looked like with it's tremendous individual initiatives, laissez faire economies coupled with rampant corruption and disregard for environment, we have all that on display in China today at a much bigger scale.
To attribute the rise of China merely to the authoritarian government and the lack of the hindrances that a democracy usually brings as many commentators do , is wrong. China's reforms were embraced vigorously at the local level once Deng gave the go ahead. This pushed the powerful middle level party leaders to grudgingly dismantle socialism Today some estimates put the private sector at about 2/3rds of China's economy (Officially the Party maintains that it is only 1/3rds. But most of the state enterprises are today private fiefdoms ) which is a larger share than in most western economies.
And while being cautious, the west has given it's quiet support to the Chinese regime based on the assumption that the party will continue to extend the personal and economic freedoms. My guess is that China's move to a liberal democracy will resemble England's – a gradual transition through a series of mini-revolutions, rather than a violent overthrow. And that is good news for the rest of the world too.
Rather than worrying constantly about China's rise, India can do well to take lessons from China's experience. Indian policy makers refused to take lessons from South Korea, Japan and Singapore saying that they had smaller populations. Now a bigger population is being lifted out of poverty in a similar manner. Socialism has no excuse any more. Even if we don't do that, China can still be considered a land of huge opportunities. Building trade relations is probably the best way to avoid military conflicts. And despite what some nationalists in India might want, it would be downright foolish to provoke China.
For all these and many more reasons, I think it is an absolute must for all would be entrepreneurs and policy makers to keep themselves informed of what is happening in China. To take the good lessons and avoid the mistakes it has made. Because let's face it, China is a decade ahead of us and we have to follow the same road. Here is an excellent book that provides an unbiased picture of China's transformation – http://www.amazon.com/Dragon-Rising-Inside-China-ebook/dp/B000W9688C
India's biggest failing seems to be the inward looking nature of our culture. It's time we acknowledged the superiority of other civilizations and take lessons from them.
Regards,
Surya
Thanks, Surya
There is something clearly wrong in India. CONCLUSIVE data, conclusive evidence about what works, and why it works, is IGNORED. Instead, like mindless zombies, people keep repeating the mantras that Nehru had taught them.
I'm referring here to the "educated" classes of India. The others are simply doing the best they can (since as you will see from the Addendum I posted above, they can't even read or write: theirs is an animal existence).
Whether it is a culture of indifference to the truth, to the facts, or an inability to analyse information critically, or an "inward looking" culture, I don't know. The result is that the SIMPLE model of transformation that FTI has been offering has very few takers, and many of the "leaders" who have joined have no burning desire to change anything. They are hangers-on, waiting for something to be GIVEN to them, instead of being initiators of change.
Indians find it easier to be spectators than to participate in change. Is that the cultural issue you are referring to? This is the "bills on the sidewalk" problem. TRILLIONS of dollars lie scattered about, and no one picks them up.
S
@sanjeev I think you should write about this news. http://www.worldcoal.org/blog/china-leads-global-poverty-reduction-%E2%80%93-thanks-to-coal/