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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4494)	3/5/2005 10:59:04 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

`Only radical reforms can put India in China league` GG2.NET NEWS [05/03/2005] The real tiger? INDIA can not hope to catch up with China`s growth rate unless it vigorously pursues a second wave of radical economic reforms, says a survey conducted by The Economist magazine. ‘If India wishes to be a new Asian tiger, it makes sense for it to study China -- the tiger in front is Chinese,’ says the survey. ‘China has grown faster, attracted more foreign investment and eradicated poverty much faster,’ says Simon Long, the magazine`s South Asia correspondent, who has authored the survey entitled ‘The Tiger in Front’. Last year, China netted $60 billion in foreign direct investment (FDI) -- twelve times more than what India managed to get. Demystifying reasons for China`s stunning economic success, Long dispelled a popular fallacy that China`s lack of democracy accounts for China`s higher rate of growth. ‘It is not the political system so much but an early start that put China miles ahead in this economic race in Asia,’ says Long. ‘Some of the main reasons for China`s better performance have nothing to do with the political system. When China started its reforms, in 1978, it was poorer than India. Part of the gap now is due simply to an earlier start,’ says Long, who has chronicled China`s success story in his book ‘China to 2000: Reform`s last chance.’ Another key reason for China`s breakthrough is its vastly superior human capital base. ‘Unreformed China seems to have done a more impressive job than India did in educating and providing health for its poor,’ says the survey. Statistics point to China`s superiority vis-a-vis India in terms of basic development indices. India`s real GDP grew by an average of 5.6 per cent a year in the 1980s and by 5.8 per cent a year from 1991 to 2003. China started from a higher starting point -- 9.3 per cent in the 1980s, rising to 9.7 per cent from 1991 to 2003. Due to the higher rate of population growth, China`s per capita income was $1,100 compared to $530 in India. China`s record in poverty reduction is remarkable compared to India`s -- the number of people living on less than $1 a day fell by about 400 million between 1981 and 2001 in China. In sharp contrast, the number of the poor in India fell by 69 million between 1977 and 2002 and 35 per cent Indians continue to live on less than $1 per day compared with 17 per cent Chinese. Figures for international trade also show sharp differences between the two countries. Last year, two-way trade grew by about 36 per cent and China overtook Japan to become the world`s third largest trader behind the US and Germany. India`s two-way trade was less than 1 per cent of the global total, according to the survey. Furthermore, India`s superiority in IT does not amount to much vis-a-vis manufacturing in terms of mass employment, argues the survey. The IT industry in India makes up only 4 per cent of GDP. In 2002, just 6.2 million people were employed in India in manufacturing whereas in China about 160 million people work in manufacturing industries in China. If one adds up the sharp differences between India and China on these all-important economic and developmental benchmarks, Long`s argument about China`s superiority in the Asian sweepstakes of the 21st century becomes evident. India is unlikely to match China`s growth rates unless it goes all out for radical reforms, concludes Long. ‘That seems very unlikely for now, but then when China started its real reforms in 1991, not many believed it,’` points out the author of the survey. But this does not mean India and China are going to be rivals. Instead, India and China will have a "competitive partnership," predicts the survey. India can learn from China`s economic model and China will benefit from learning India`s political freedoms, says Long, who has served as BBC`s correspondent in Beijing from 1989-1991. gg2.net