India’s GDP growth rate exceeded China’s GDP growth rate in 2015. This has fueled several media headlines in India claiming that India is on track to replicate China’s economic tale. However, the truth appears to be far from it. Despite the Indian media’s frantic efforts to lump India and China together by using deceptive data to compare the two economies, India remains far behind China. True, India has made remarkable progress toward becoming an economic superpower. In contrast, China has been doing so for decades. In this piece, we shall show why parallels between India and China are completely unfounded.
1 China’s economy exceeds that of India
India’s GDP is close to $1.5 trillion. Simultaneously, China’s GDP is surpassing $7 trillion. China’s GDP is at least four times larger than India’s. This means that even if China develops at a paltry 1.5 percent per year and India expands at a pace of 7% per year, the Chinese economy would have contributed the same amount of production as the Indian economy!
Comparing the GDP growth rates of India and China is thus useless. Over the last three decades or more, China’s growth rate has continuously outpaced India’s. For a few quarters, India has narrowly surpassed China’s growth rate. Only by outpacing China’s growth rate by a large margin over the next two to three decades does India stand a hope of surpassing the Chinese economy.
2 In India, inflation is six times greater than in China
India’s GDP expansion has been accompanied by the country’s rampant inflation. Inflationary growth cannot be sustained for an extended length of time. Instead, such growth rates reflect the short-term boost provided to the economy by monetary policy.
![[10 Points] INDIA Vs CHINA – Business Case Study चीन भारत से इतना आगे क्यों](https://bijnorbusiness.com/wp-content/uploads/2022/07/10-Points-INDIA-Vs-CHINA-–-Business-Case-Study-चीन-भारत-से-इतना-आगे-क्यों.jpg)
In China, on the other hand, inflation has been relatively stable for several years at a low 0.8 percent. This has been done even though China has been running a fiscal surplus for many years and, in theory, should be experiencing inflation. On the contrary, China has established sovereign wealth funds that invest excess cash in foreign assets, therefore keeping inflation low.
Given that India’s economy is plagued by inflation, it is doubtful that it will be able to compete with China in the long run.
3 China’s manufacturing productivity is 1.6 times that of India
China produces far more than India. It also does so far more efficiently. Given China’s superior infrastructure and manufacturing skills, it is not surprising that the typical Chinese worker generates 1.6 times more output than the average Indian worker. This indicates that China’s national productivity is 60 percent greater.
The Indian industrial industry is plagued by several issues. These issues include inconsistent electrical supplies, sluggish and costly transportation networks, and a lack of skills that boost industrial output.
Given that many of these issues are structural, it is doubtful that India will be able to resolve them shortly.
4 Workforce
When it comes to labor, the Indian economy has a clear strategic edge. The British established the Indian educational system. As a result, the Indian workforce is global in scope. They can communicate in English fluently, giving them an advantage over Chinese nationals who suffer linguistic problems. Furthermore, the Indian labor performs high-level positions in the information technology and business process outsourcing industries, as opposed to the Chinese workforce, which does menial tasks on the factory shop floor. Given that the future of the world depends on high-skilled knowledge occupations, the Indian workforce may soon overtake the Chinese workforce.
5 One Child Policy
Furthermore, China is facing what many economists refer to as a demographic time bomb. China has used the one-child policy to regulate its population for several decades. However, China is currently facing a situation in which there are more individuals out of the labor force than in it. Every Chinese worker is obliged to cover the expenditures of at least two Chinese retirees.
6 Entrepreneurship
China is still mostly a communist country. This indicates that the government runs all of the businesses. State-run businesses are typically inefficient and uninnovative. On the other side, the Indian economy is built on creative businesses. Given the global economy’s competitive character, the Indian sector has a higher chance of success in the future. This is already evident as capital-intensive Chinese sectors like coal and cement fail, whilst knowledge-intensive businesses like information technology thrive!
As a result, the China-India comparison is now meaningless. China is a full-fledged powerhouse that has begun to decline, whereas India has just recently begun to rise. The road ahead is long and unclear, and only time will tell if some questions will be answered!
7 China has always been less influenced by the West
Both India and China have extensive and fascinating histories. Along with Mesopotamia and ancient Egypt, these two kingdoms constitute part of the world’s four ancient civilizations.
While both nations have rich and diverse histories, China has had less Western influence and is an excellent option for tourists who want to visit somewhere totally different from their home country.
While India is also an excellent country to visit if you want to compare your culture to another, many Indians are familiar with Western culture and have embraced certain features of it.
8 China’s History: Dynasties and Ruling Families
The Imperial China Period encompasses the majority of China’s history. This period begins around 221 BC and features the establishment and fall of numerous mighty dynasties. The Qin Dynasty was the first to unite all of China under a single empire, giving rise to the country’s name.
The Qing Dynasty succeeded the Imperial China Period in 1911. With a civil war and the Japanese invasion, China had a difficult era from 1911 to 1949. The People’s Republic of China was founded in 1949, and the country experienced a communist revolution before entering a period of stability.
If you’re interested in Chinese history, visit the Forbidden City in Beijing or the Terracotta Warriors in Sichuan.
9 The History of India: A Fusion of Many Cultures and Peoples
India’s history has been filled with foreign conquerors whose people mingled to form the variety that is contemporary India. The Indus Valley Civilisation was India’s earliest civilization, dating back to 1800BC. Following then, India was attacked by a variety of troops, including Arabs, Turks, Mongols, and even Alexander the Great.
In the 18th century, India was conquered by the British and became a colony. The British ruled India for over 200 years before it earned independence in 1947. When India obtained independence, it was divided into three nations: India, Pakistan, and Bangladesh.
If you are interested in Indian history, you may visit Mughal monuments, maharaja palaces, and massive colonial constructions built by the British and Portuguese.
10 Diversity: India has more minority groups and protected classes than any other country
Both India and China have a diversified population. Minority groups and geographical variances contribute to China’s variety.
The variety of India is mostly attributable to religious and ethnic distinctions. Both countries have safeguarded minorities with different traditions and languages.
✅ Minorities in China
China has a more homogeneous civilization than India, with around 92 percent of the population being Han Chinese. China has 55 more recognized ethnic groups, albeit making up a tiny fraction of the population.
These ethnic communities can be found all around China. With around 16 million people, the Zhuang minority people of southern China are the biggest minority community.
✅ Minorities in India
India is one of the world’s most religious and ethnically diverse countries. In India, there are two major ethnic groups: the Indo-Aryans of North India and the Dravidians of South India.
Aside from these two major groups, there are several more, including Sino-Tibetans from the northeastern states and Anglo-Indians of European heritage.