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Tuesday, October 18, 20051129686600

The Importance of Economic Growth (India and China)

"China vs India by charts," New Economist, 14 October 2005,http://neweconomist.blogs.com/new_economist/2005/10/china_vs_india_.html (from SimonWorld, also at PSD Blog).

Deutsche Bank recently compared Chinese and Indian economic growth over the past few years. It clearly shows how just a few years of slightly higher economic growth can change global power,a lot

A Little More Economic Growth...

... a lot richer country

Growth is very important. Let's hope American politicians have learned the lesson.

Update: The Asianist picks up the story from AsiaPundit, and agrees with the conventional wisdom

What this tells me is that China's reform policies have paid off handsomely, but that China's business culture has some strong hurdles. Conversely, India has fared less well due to slower reforms, but has a greater potential in the sense that there is more ingrained Western-style business culture.


Yet looking at the charts also tells me that India is ready to play catch up. Not to mention I've got an idea for a post brewing on the difference between India's and China's economic potential...

Posted by: Simon | Tuesday, October 18, 2005


Great points. India can definitely catch up, but given the wasted decade it could take 20 years. Of course, China has a lot of political risk that India doesn't, and doing something stupid (losing a war followed by a revolution) could set China back a long time... It's happened before.

Posted by: Dan tdaxp | Tuesday, October 18, 2005


The Economist did an article on this same issue based on an interview with Simon Long titled "the Tiger in Front" March 3, 2005 (http://economist.com/displaystory.cfm?story_id=3689214). It argues that India, being a more open society stands a good chance of catching up. However, Chinese reforms started well before India's going back to 1978.
I think there are some other fundamental differences, Chinese have a better political role on the world stage oweing to their UN Security Council Seat and veto power. Additionally, China's population goals in the short term (I am not referring to their justness from a moral sense) have probably helped streamline the economy.
I agree with your comments about how easy it would be for the Chinese to destroy their advantage through a revolution or by engaging in a war over Taiwan or energy needs in Southeast Asia.

Kind regards,

Bill Rice
Dawn's Early Light

Posted by: Bill Rice | Tuesday, October 18, 2005

Poor + democracy = Poor (india)
Poor + bad autocracy (dictatoship) = Poorer (Zimbabwe)
Poor + good autocracy = less poor (China)

These formulas will be true for another 200 years.

Posted by: David | Friday, July 21, 2006


The generalization of your statement has been truly for sages. After all, Martin Luther wrote something to the effect that "I'd rather be ruled by a competent turk than an incompetent Christian"

The specific national criterea come and go, of course.

Posted by: Dan tdaxp | Sunday, July 23, 2006