China's emergence as a world economic power follows years of expansion, with growth of 9% or more the norm.It is a major exporter and may now be the world's fourth largest economy having overtaken Italy and possibly the UK and France.India has also seen dramatic growth of more than 7% a year and is the recipient of much foreign investment .Still US remains the largest economy in real terms. But on a measure based on purchasing power, China could overtake the US by 2020.There was not much difference in the economy between India and China’s performance roughly until 1980, when the per ca-pita incomes were also similar. Over the last quarter century, both instituted economic reforms and the growth accelerated. China embraced globalization and trade enthusiastically, welcoming FDI with no inhibitions, and gradually gaining control of world markets for low-tech labour-intensive manufactures. While reforms in India are supposed to have been initiated in 1991, the doctrinaire socialist policy had begun to be diluted in the second innings of Indira Gandhi .The process of liberalization continued under her son Rajiv Gandhi and more dramatically after 1991 while the growth rate doubled from the previous Hindu rate, but still lagged that of China. The result has been that starting with more or less the same per capita incomes 25 years back, Chinese incomes today are double that of India's as a result not only of faster GDP growth, but also of a lower population increase, good with the one-child policy. One in three people worldwide lives in either China, the largest communist country, or India, the largest democracy. For the moment, China remains the most populous nation,with 1.3 billion inhabitants, followed by India, which is home to 1.1 billion.But India's higher fertility rate means the gap is narrowing and the UN expects it to overtake China before 2030.
Those of us who suffer from China-envy – the debilitating feeling that the Chinese are ahead of us in everything they do, should think about this starting from stringent rules in daily life from traffic bans to one-child policy,the average Chinese trusts her government even less than Indian trusts.Is that possible, after CWG, Adarsh and A. Raja and Dhayanidhi maran? It is.About some months ago, there were fears that radiation from Fukushima could leak into seawater, and eventually salt. This sent thousands to Chinese rushing to grocery stores. They cleaned out entire shops of all the packaged salt in store. This triggered fears of a salt shortage in coastal China.The government insisted the fears were baseless, as indeed they proved to be, but people took their neighbours’ whispers more seriously than the word from Beijing.Something even more serious is happening from last week. Folks across China have cleared shop shelves of soaps, detergents and shampoo. For the last week or so, media has said that the four companies that dominate this business, including Unilever and P&G and two Chinese entities, will hike prices of soaps and shampoos between 5% and 15%.None of these four companies has actually hiked rates, nor spoken about the timing of price hikes. Beijing insists that interest rate hikes and other measures will soon cool prices. Nevertheless, people have panicked.Yes, inflation is high in China, but India has also gone through a period of gut-wrenching price spikes. Yet, we do not see crowds stampeding through vegetable markets, or cleaning out store shelves before the things gets costlier. An Article about Chinese newspapers says that, In newsrooms, it used to be said that you couldn’t trust news out of China till Beijing denied it. Today, most Chinese seem to believe this. They don’t trust their government and if the mandarins say something, they’re betting that exactly the opposite is true.Here, it’s different. To most things , the Indian responds with a cynical shrug. The exception is the government calendar of dry days, which are vital and many in a year. That, we treat with all the seriousness it deserves.
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