Sunday, May 15, 2011

India vs China- The Turtle vs the Hare

Much like a drag race, China, has accelerated the quickest, and has maintained 'control' or rather suppressed, over its internal political 'complaints' for a quite some time(about 30 years) and is clearly winning. Whether they become the next superpower will not depend on how great these results are, but rather, how they've been getting them.
Unlike India, China has not had to slow down due to the need to be "Democratic" and its authoritarian government has been able to make rapid decisions to keep outpacing the rest of the worlds economies, which can be seen in its its astronomical growth rates. (or just take a look at any fund that invest primarily in the Chinese markets).
However, a couple key issues may backlash against the Communist Party as the future nears, the desire to have political freedom, which the citizen's increased economic power may bring, and China's long term labor supply. Their control over the population with the one child policy, and their citizens desire for political freedom may determine their long term fate.
India's slow but necessary adjustments may prove to serve it people in the long run. The next super power though? That probably wont be for some time. For now, we'll have to see how the Hare fare's.

Greg Voegtle

http://www.project-syndicate.org/commentary/bhagwati6/English

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