India and China – The real and the imaginary.

Parwaiz Khan

India Poised to Overtake China?

Pitching India against China has been another pastime of experts and economists in the West. India certainly compares to China in terms of headcount, and it is located just south of Chine. But, despite all the India Shines chimes, the parity ends right there.

Since the predictions of impending Chinese economic collapse, social disintegration, and chaos have been stubbornly refusing to materialize for more than two decades, envisioning India surpassing China in terms of economic growth and global power is the only hope left for our Teflon coated economists. But, these experts are taking a ride on a losing pony again.

India is a member of BRICS, and a fast growing economy. But, despite the GDP figures and make-believe convincing data, the prospects of it ever reaching the status of China in terms of global economic power are grim. The band of economists and experts harping on the Indian wagon is neglecting to take into account some very serious short comings and obstacles that India will have to surmount before even entering into the league of serious contenders for the title of World’s Economic Powerhouse – that China is.

In fact, there are no contenders and no contestants to challenge the status of China.

The Reality of India Shines

During a visit to India in March 2015, the IMF turkey, Christine Lagarde, declared that India could outpace China as the world’s fastest growing economy as soon as this year. She further elaborated that India’s economy is expected to grow 7.5% in the upcoming 2015-2016 fiscal year, which begins in April, up from 7.2% in the current fiscal year. At that rate, India would be the world’s fastest growing large economy, she added.

Lagarde attributed India’s dynamism to “recent policy reforms and improved business confidence” that provided a “booster shot” for the economy. “The pro-business government of Prime Minister Narendra Modi has made economic growth a top priority”, she pointed out.

She, of course, forgot to provide the deeper insight into the “booster shot” that she was referring to; the implementation of purely fascist policies to serve the interests of the multinational corporations and billionaires of India – at the expense of utterly poor Indian masses.

Unlike China, which for reasons of its own, under reports its data, India, following its ‘partners’ in the west, churns out growth numbers at the whim of the government. Last month, India’s government statisticians changed the base year used to calculate national accounts, and made ‘adjustments’ to better reflect manufacturing activity. Overnight, GDP growth in fiscal year 2014 was upgraded from 4.7% to 6.9% !

The latest data was further manipulated to show that GDP grew by 7.5% in the quarter ended December 2014 and a whopping 8.2% the previous quarter. An early forecast puts fiscal year 2015 growth at 7.4%. That would be bang in line with China’s most recent annual growth rate.
As many analysts have pointed out, these numbers have no basis.”But the big story is that new data continue to create confusion,” wrote Shilan Shah of Capital Economics. “The key point is that these numbers are inconsistent with a number of indicators that point to a slowdown in the economy for much of the past three years, and continued slack more recently.”

Even Arvind Subramanian, the chief economic adviser to the Indian government, stated, “I am not saying these estimates are wrong, only that these bear further scrutiny.”

Anyhow, with these changes, of course, India’s economy was suddenly putting up growth numbers that put it within spitting distance of China.

The dramatic revisions upended the prevailing narrative, which portrayed India’s economy as one that was struggling to one growing at a fast pace – thanks to the newly elected government of Prime Minister Narendra Modi!

Such fabrication of data is typical and shows the extent of manipulation and exaggeration in Indian politics and economy.

India’s main problem is its crumbling infrastructure – it is outdated and in dire need of update and repairs. The economic boom is being built on the shakiest of foundations. Highways, modern bridges, world-class airports, reliable power, and clean water are in desperately short supply. And what’s already there is literally crumbling under the weight of progress.

Shortage of electricity is another hindering block. Even after 35 years of economic boom, rotational power outage are a daily affair in India. Production lines have to be shut down while waiting for the power to come back.

In fact, India today is about where China was three decades ago. Back then, China decided to invest heavily in building roads, railways, power stations, and the power grid. It built more than 25,000 miles of expressways that now crisscross the country. India, by contrast, has just 3,700 miles of highways that don’t even come close to the Chines expressway standards.

China’s lead in infrastructure is likely to grow further as Beijing assign about 10% of its GDP into public works, compared with New Delhi’s 4% – of which more than half ends up in the corrupt pockets.

On the social front, the situation is even more grim. While China is pulling up tens of millions of its population above the poverty level annually, and has the fasted improving standard of living in the world for more than two decades, it is estimated that as many as 68% of people (or 885 millions) in India are living on less than US $2 (the ‘official’ World Bank poverty line) a day, over half of whom are persisting on an income of under US $1 a day (World Bank). Survival on such a pittance in itself is a struggle.

The majority of the Indian population – over 50% – do not have the luxury of a toilet, and are forced to defecate in public. In a recent report on worldwide sanitation, The World Health Organization (WHO) and UNICEF found that “globally, India continues to be the country with the highest number of people (597 million people) practicing open defecation.”

The other problem, that is further amplifying with the time, is the culture of extreme violence – Violence against the weak and poor, women, and minorities is imbedded in the Indian social fabrics. There are many writers who call India The Great Rapistan. Burning people alive and gang rapes are common every day occurrences – most of which, unlike the well known rape-murder on December 16, 2013 in Delhi, never make the newlines.

Such culture of violence, apathy, and intolerance, combined with utter poverty and religious fanaticism, is not conducive to stability and progress. It is a keg of gunpowder that is ready to explode any moment.

Comparing India to China and predicting that it will to surpass China economically, is just a wishful thinking, or, may be, just an effort to muddy the water.
China: A Global Powerhouse

China has been the work horse of the world for more than a decade. As it jokingly said in the economic circles, “If the China sneezes, the world will get pneumonia.”, China is the largest trading partner for most of the world’s significant nations. It is the largest importer of the raw material, agriculture, and finished goods, and is also the largest exporter of finished goods to them. Now China is also emerging as the most desirable alternative for investment, and for building the infrastructure all around the world.

China’s advancement in the area of pure science and technology is also accelerating. From a technologically dependent country, it is emerging as an innovator nation. In many areas, China is already the largest patent holder in the world.

But the strongest factor in favor of China is the fact that it is, probably, the only country that is governed, run, and managed by its own indigenous establishment – No one from outside pulls its strings. It is one of the most significant factor that differentiate China from India. While India is controlled by the same establishment left over by the British Crown, China charts its own course – On its way to crown itself The King. And, it seems it is fast approaching its destiny.

As we have pointed out in previous writings, the real Chinese Miracle is the ever expanding and modernizing manufacturing and service sector. It is a perpetual growth model supported by an ever increasingly affluent population.

To further augment the goal of perpetual growth, is the Chinese vision for an ever expending infrastructure – high-speed railways, super highways, airports, and a cobweb of facilities encompassing the entire country. Growth in the construction sector is expected to continue for at least twenty more years. Then, it will be the next generation of the infrastructure that will evolve out of the technological innovations – Welcome to the world that was envisioned in many science fictions – ultra high-tech city clusters – self sufficient, but working synergistically together.

China’s focus is more inward at this juncture, the entire country is modernizing at an ever increasing fast pace. It is a construction and industrial boom the current phase of which is expected to last more than twenty years. During this phase, China is building the ultra modern, self sufficient, and self-contained Cluster Cities that are going to sprawl all over the country providing a clean and luxurious living for its masses.

At the same time, externally, China is building a network of super Silk Roads, connecting the land masses from Petrolistans to France and from the Middle East to Thailand. China is going to be the hub of the global trade and commerce – actually, it already is.

No one even come close to China when it comes to the pace of development, progress, and advancement – and China is already miles ahead of every one else. Forget Comparing India to China. It is not even there.

The issue with the likes of Christine Lagarde, the IMF witless turkey, is not that they don’t know the facts – which are right in front of them, but that they don’t know or understand how to handle this situation – China displacing The Crown. Their endeavor in trying to pitch India as a competitor and challenger to China is just laughable.

India as the “I” in the BRICS, is also connected to the Chinese camp, And, as such, adds its weight to counterbalance to West. It is therefore pertinent to West to try to incite and pit India against China. But, in reality, it is just a nice try.

India, by itself, is certainly advancing, both economically and technologically. That in itself is quite a contrast to its western and eastern neighbors – the failed state of Pakistan and a ruined Bangladesh. But, the witless efforts of the “experts” in trying to pitch India against China, and comparing India with China, are just pitiful.