Can India beat China??

If China can not sustain the growth, that doesn't really mean India can beat China because India is the largest democracy in the world. The authoritarian regimes then and current China are significantly different. And dreaming that China will falter and make way for others to beat it, would be just a dream.

Bad Press for China, is a reflection of the inability of the world failing to come to terms with China and accepting China for what it really is.

There was lot of bad press about China recently in view of Olympics in Beijing. I believe because almost the entire world is so jealous of how China does things. Many western countries are too dependent on China that there is no point of return from China. So they are at least trying to bring different kind of pressure on China to get a leverage.

Otherwise, why would the same Western world that pushed so many billions of dollars of investment to China for the last two decades, and made China what it is today, suddenly finds a new voice of criticism about Human rights and freedom of expression etc. As far as I remember, China did not become worse than two decades ago. It is a much better country now.

Why India Will Beat China
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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