What are China’s advantages over India?


Answer by Balaji Viswanathan:

Complementary to: What are India's advantages over China?

More friendly to business and investment

Yesterday, I was at LinuxCon in Chicago – a major business/tech convention and was chatting with execs on setting up businesses in India. With a beer in hand, each recounted their horror stories in setting offices in India. They are all well meaning business folks and each could have brought a lot more well-paying jobs & better tech. But, no.

In India, we are still living in the 19th century business & trade environment, still debating on Wal-mart's entry to India and FDI. China is lighting years ahead. They allowed Walmart to set shop 18 years ago, revolutionized their retail and extremely ahead in logistics, while we are in stone age retail. That is just one sector, but the same is everywhere.

We call China as Communist without realizing that China is way more capitalist than India. India cannot go anywhere if it is so toxic for businesses.

Look at our world rank below on ease of doing business. I get it that it takes years to construct roads, dams, airports etc. But, this is just ease of doing business almost entirely dependent on our attitudes.  We have to change our anti-business attitudes. Anti-business lobbies should be pushed out. We got too heavy of these. Nehruvian socialism has turned us too cynical and against our businesses.

China vs. India: Which is better for doing business?

See India's exports below vs. China's. Good luck trying to grow it by driving away Foreign investment.

In every indicator of capitalism – trade, investment, competitiveness and ease of doing business, China is way ahead.

China's health is way ahead:

Mao might be criticized for a lot of things. But, in many ways he was also a pragmatist. One of the key innovations of his time was the: Barefoot doctor. These were semi-educated village doctors who dramatically improved health outcomes in the rural areas. Instead of producing only a few 1000 doctors who got through a 7-year school, why not produce 1 million doctors who go through 1-year school have basic knowledge of diseases and sanitation? This is very important for a nation growing up.  China’s village doctors take great strides

 India failed to do this and focusing only on Western-style Medical education. Thus, we have too few doctors to take care of 600,000 villages. As China crossed the stage 1, they abolished the Barefoot doctors and are busy in stage 2. This and other healthcare innovations show up in the stats below.

How can a sick undernutritioned nation grow fast?

China's Infrastructure

Nothing more to say here. China has got some of the fantastic roads, railways, ports, etc. I will just use one statistic to dramatically drive home the point.

Size and resources

China is more than thrice the size of India with way more water, energy and mineral resources. I will give you one example of iron ore. See the blue lines vs other lines.

Going through its labor peak due to Demographic dividend

China and India have comparable population, but china has 80% more workers than India. How? It is because of temporary condition of Demographic dividend where a number of new kids drop rapidly and a significant portion of the population are the kids of yesterday – who are now healthy adults ready to work. The nation can focus a lot on educating these few kids and can assure better literacy and development. This shift pushed up Japan after WW2. China is going through this bulge. [Unfortunately, this is only a temporary help as Japan later found out in 1990s. Eventually lack of new kids will affect your labor population 30 years from now.]

The best part is we can solve all of this. None of this is rocket science. We just need to change our attitudes towards money. India's major religions – Hinduism, Jainism and Islam are all pro-traders, pro-businesses and pro-wealth. Hindus & Jains worship Lakshmi. Sanskrit traders were all over Asia and Africa trading  exchanging ideas.

Unfortunately in a post-Nehru India, businessmen and traders are treated like scum and our politics have made it quite hard for good business to move swiftly. This encourages corruption, as bad businessmen will go ahead anyway leaving behind the good businesses to get stuck in files. Let us get back to worshipping Lakshmi. We will do good.

What are China's advantages over India?


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