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21 January 2015

India faces tests before it can overtake China

According to the latest World Bank report, released on January 14, India's growth rate will catch up with China's in the next two years.

Many people consider China and India the engines of the development of Asia, some even regard them the engines of the world.

India is a proud nation, competitive and unwilling to lag behind. So it is eager to challenge China in every aspect, from aerospace, military force, to economic strength.

Thus, as Modi's ambitious "Make in India" plan has been gradually put into practice, and India's economy has progressively recovered in the wake of economic reform measures, voices asking "can India catch up with China" and "when will India overtake China" can be heard once again.

Some predict that India will outrun China economically in 20 years, while some say 50 years. Granted, the economic picture in India is brightening, but it won't be easy for it to displace China as Asia's next economic giant.

India's fast-growing population and inexpensive labor market have made it attractive for foreign investments.

India also enjoys a better marketization than China, and has been making life easier for local businesses. Nonetheless, New Delhi still has some barriers to overcome before taking the next big leap.
India is predicted to become the most populous country in the world in 2030. The large number of people has put enormous pressure on its finance and resources.

More importantly, democracy, which the nation is so proud of, has become a burden for development. For example, building a railway in India takes much more time than it does in China. Whenever policymakers decide to go in for large-scale construction, protests will be raised against it, mostly by opposition parties and groups. The messy democratic tradition in India has made it hard to deliver a coherent approach to get every piece of big projects done.

In addition, the country has not found a way yet to get around the problem of the polarization of wealth and corruption remains rampant.

From the Bofors scandal that involved then prime minister Rajiv Gandhi in the 1980s, to a spate of scandals under former prime minister Manmohan Singh in 2012, corruption has been rocking India's society while hampering its growth.

As a matter of fact, China is now providing a chance for both of the countries' economic strength to ride high. The initiatives of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, which were unveiled by Chinese President Xi Jinping, would build a massive trade and infrastructure network connecting East Asia with Europe, and pose an opportunity for a win-win bilateral cooperation.

But many people in India are still stuck with a Cold War mentality toward China. Apart from the remaining border disputes, they do not think the network, or any connection with China would benefit India. On the contrary, they are extremely vigilant, believing that the Chinese army may invade once a railway is built through the two states.

What's more, they always doubt that China will interfere in the affairs of northeast India by supporting separatist militants. To be frank, they should stop over-thinking. China has no intention of interfering in the internal affairs of any other countries.

If India could give up its Cold War mindset, China-India cooperation will be promising. Even if India does outrun China some day in the future, Beijing will give New Delhi its warmest congratulations.

The article was compiled by Global Times reporter Li Aixin based on an interview with Wang Dehua, head of the Institute for the Southern and Central Asian Studies, the Shanghai Municipal Center for International Studies. liaixin@globaltimes.com.cn 

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