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  • Mert DAMLAPINAR
    Mert DAMLAPINAR    Group moderator
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    Why India Wıll Beat China..
    Hello dear members,

    I'd like to find out your opinion about the title and debate below...

    Let's get connected..


    Why India Will Beat China

    An entrenched and vibrant democracy will ultimately drive India to outperform China socially and economically.

    Authoritarian regimes often yield impressive short-term economic results, as seen in Germany in the 1930s, the Soviet Union in the 1950s, Brazil in the 1960s, and China in the 1990s. Unencumbered by such things as property rights, legal recourse, and public debate, the authoritarian regime can harness significant economic and political resources to create impressive industrial and economic feats.

    Conversely, democratic regimes tend to be sloppy affairs with loud public discourse, a vocal press, stubborn land owners, and a myriad of civil liberties. Far from being able to harness economic resources, the government often must act more as a regulator. The result is that there are very few grandiose government-sponsored projects. Instead, there are countless private-sector initiatives driven by the invisible hand of the market. While the authoritarian regime is envied by some, the fact is that longer term, this type of socioeconomic model has typically led to economic and social distortions.

    That is the dilemma that China faces today. Since the 1980s, the Chinese government has focused on developing an export-driven economy supported by an artificially undervalued currency. Foreign direct investment was encouraged while domestic consumption was limited. Massive infrastructure projects were initiated, fueled by a growing trade surplus, with cities sprouting up in the hinterlands like some mythical phoenix. For years, the Chinese economy benefited from these policies with double-digit gross domestic product growth, vast foreign currency reserves, and ever increasing capital inflows.
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    As India becomes urbanized many families will choose to sell or borrow against their land so that they can start businesses, buy apartments, or provide education opportunities for their children. India is at the beginning of a gradual migration that is being driven by the development of high-end manufacturing and other sunrise industries that will require a vast pool of semiskilled and skilled labor. This migration will create an increasingly urban India that is expected to attract more than 200 million rural inhabitants to urban centers by 2025, primarily in what are known as secondary or "B & C" cities.
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    India's democracy is far from perfect, but it is also quite young, and as incomes rise and the populace becomes more informed we can expect that India's government institutions will become more responsive and transparent.

    And what about the hare? Consider this fact: A recent survey found that of the 20,000 richest men in China, more than 95% were directly related to Communist party officials. Where would you place your bet?
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    For complete coverage of the article please visit: http://www.businessweek.com/globalbiz/content/jul2008/gb2008....

    All the best
    Mert DAMLAPINAR
    VELAGRO
    http://www.velagro.com
    • 31 Jul 2008, 4:49 pm