Is China India’s Role Model for Economic Development?
Do you think that India should look to China as an Economic Role Model?
The International and national media has a great passion to measure India’s economic growth against china’s yardstick. India had an 8 percent annual growth in recent years which was recorded as one the fastest economic growth in the world. The media compared the two nation’s social and economic growth. It’s a fact that virtually, in almost every aspect; China is ahead of India including infrastructure, armed forces, education, manufacturing and software industry. Chinese are also fast gaining proficiency in English language, while India has this historical advantage. It has been also alleged that China has outperformed their country in large part because the Chinese one-party system is more “disciplined” than India’s vibrant, but messy, democracy. The China’s economy, at $5.9 trillion, is about three and a half times as big as the Indian economy.
But that all growth in China is with a much older population than India, thus India’s time to reap the Demographic Dividend coming up. Here are some more reasons, why China should not be a Role model for India:
India’s growth is Balanced
China is too much dependent on exports and investment for its growth. There is a need in China to increase the role of private consumption to make its growth more balanced. This is where China wants to be and India already is.
Consumer spending plays a much bigger role in India’s economy than in China’s. The state owned companies and Banks in China can easily fall prey to the Government mandates and policies as China has “State Capitalism”. This can lead to problems such as asset bubbles and excess capacity. Indian banking and public economy system is more balanced. If we compare the bad loans of Indian and Chinese banks, India gets better marks.
India Does not distort Global Economy:
Thus India doesn’t have to implement policies that distort the global economy as China has been doing with its currency regime. India buys more from the rest of the world than it sells. So again, we are less susceptible to shocks from the international economy.
India is not ruled by Dictators:
It has been projected that the authoritarianism in China has been a necessary factor behind the economy’s rapid growth. But has been one of world’s fastest growing economies without presence of such authoritarianism over the past two decades. It has been alleged that India doesn’t have a true democracy,all Indians are corrupt and unjust, but here the Governments change and votes count. India does not sacrifice human