India vs China

India has outpaced China in economic growth for the past two years—its GDP grew 6.1 percent last quarter, compared with China’s 4.5 percent. At first glance, the statistics seem promising. But the ground reality is otherwise. India is far behind China in every sphere.

The US strategists think India is China’s natural adversary; the two countries share more than 2,000 miles of disputed, undemarcated border, where conflict breaks out sporadically. Right now they are at loggerheads in the Ladakh region.The bigger and stronger China’s competitors are in Asia, the greater the prospects for a balance of power favourable to the United States. So, they are trying to integrate India into their strategic orbit. With Modi’s US diplomacy getting extra-ordinary focus in recent months in international media the saffron brigade has begun to believe that India is already a ‘super power’.

In 2006, the World Economic Forum in Davos heralded India as the “world’s fastest-growing free market democracy” and the then-Indian trade minister said that India’s economy would shortly surpass China’s. But these predictions didn’t come true.

Despite India’s fast growth over the past two years—when India joined the club of the world’s five largest economies—India’s economy has remained much smaller than China’s. In the early 2000s, China’s manufacturing, exports, and GDP were about two to three times larger than India’s. Now, China’s economy is about five times larger, with a GDP of $17.7 trillion versus India’s GDP of $3.2 trillion.

India has been falling behind in the race to develop science and technology to power economic growth. China graduates nearly twice as many STEM students as India. China spends 2 percent of its GDP on research and development, while India spends 0.7 percent. Four of the world’s 20 biggest tech companies by revenue are Chinese; none are based in India. China produces over half of the world’s 5G infrastructure, India just 1 percent. TikTok and similar apps created in China are now global leaders, but India has yet to create a tech product that has gone global. When it comes to producing artificial intelligence (AI), China is the only global rival to the United States. China holds 65 percent of the world’s AI patents, compared with India’s 3 percent. China’s AI firms have received $95 billion in private investment from 2013 through 2022 versus India’s $7 billion. And top-tier AI researchers hail primarily from China, the United States, and Europe, while India lags behind.

The international community has rightly celebrated China’s “anti-poverty miracle” that has essentially eliminated abject poverty. In contrast, India continues to have high levels of poverty and malnutrition. In 1980, 90 percent of China’s 1 billion citizens had incomes below the World Bank’s threshold for abject poverty. Today, that number is approximately zero. Yet more than 10 percent of India’s population of 1.4 billion continue to live below the World Bank extreme poverty line of $2.15 per day. India also has one of the worst rates of child malnutrition in the world.

In truth the idea that New Delhi will counter Beijing has created an arms import behemoth. India has opened a huge arms Bazar for the US military-industrial complex. There is a lot of confusion about the Indo-U.S. relationship, but the strategic logic is inexorable. India is unlikely to become a counter-weight to China in the foreseeable future.

For one thing the future does not always resemble the past.


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Vol 56, No. 3, Jul 16 - 22, 2023