Will India Beat China in Economic Race?

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Monday, December 7th, 2009

Both India and China are growing, and that is nothing but good for Korea, who can export high-end technological goods to both countries until the cows come home. But which country will win in the never-ending race for a better economy? Will it be India, who is just now opening up its economy after half a decade of inward-looking policy? Or is it China, who beat India to the opening-up punch a few years ago but is also having problems in improving its own economic outlook? Will India eventually end up on top?

Yes

India has one of the best strengths for economic growth that a nation can have, and incidentally China does not have - democracy. India is a democratic country, which has been shown to synergize very well with capitalism. India has spent years developing itself to be ready for extensive foreign investment, and 2010 will be its coming-out party. India will pull ahead and ever look back.

Also, India has internal stability. It has a strong culture reinforced by its own long history and modern entertainment industry. Its people live within a very large landmass, and can be so safely immersed in their own culture that they ignore other countries. This is a very important factor to social stability, and social stability is a precursor to economic prosperity. This is what will draw India ahead in the economic race against China.

No

China has a head start on India, and has an important strength that India lacks - control of its citizens. With the tighter controls that China has in place, it can change policies and create reforms more quickly in order to do what it takes to gain the economic edge. China is able to do things that India, a democratic country, simply cannot. And this edge will give it better economic prosperity. This is not simple communism vs. democracy - China is a new thing, a collectivist country that also embraces capitalism. That is the edge it needs to keep ahead.

China is also stronger militarily. If one thinks that is not important, look at the most prosperous nation in the world - the US. It also spends the most on military technology. If a country has a strong military, they are a good investment. When the global economic crisis was at its worst, every investor was buying bonds from the US government, even at less than face value. This is because out of all the nations of the world, the investors believed the US was the one most guaranteed to survive any crisis. Emulating that phenomenon, based on military strength, is what will help China in its own economic race against India.

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