The world seems to be divided between China sceptics and China believers. Prof. James Robinson (Why Nations Fail) and many others believe that an extractive political system combined with a lack of democratic institutions and free markets do not make for sustainable growth and China is likely to come to a bloody end with social unrest and political stasis. There are many who will question statistics coming out of the country and the excessive spends on infrastracture – with long stretches of empty factories and empty housing estates. One needs hardly be reminded of all the other problems such as environmental degradation, inequality, lack of a judicial system and the list goes on – most of them highlighted by Mr. Beardson. However, there are many China supporters. Kishore Mahbubani, Dean Singapore University has been a great advocate of China and argues that the West does not understand China. One can hardly attend any global conference today without a significant portion dedicated to China – it is a nation no one can afford to ignore. So where does the truth lie?
China liberalised around 10 years earlier than India, but today the chasm between them is widening at an alarming pace. In the last quarter, India’s GDP growth clocked a mere 4.5%. It is somewhat of a conundrum for Western thinkers that India – the largest democracy and free market economy (relatively speaking) with democratic institutions and a well established judicial systems seems to be losing the race. There is a prevalent belief here in the West that China is a short-term wonder and India will prove to be the marathon winner in the end. For the time being, we have not one, but two stumbling giants. Are the growing pains similar or are they different?