Strategic Development Between India & China

Strategic Development Between India & China

Strategic Development between India & China - A comparison

This article aims to compare the development strategies and trajectories of the two
economic giants of Asia, India and China. Despite different political systems, China and India are aggressively pursuing economic liberalization for growth. Both the countries tout science and technology, and exports as a basis for their growth. Yet, their strategic paths for economic development are remarkably different. China’s strategy is methodical and deliberate, while that of India’s is chaotic and opportunistic.

China is marching ahead with over 10% gross domestic product (GDP) growth rates over the last two decades. China has followed a conventional path in transiting from an agricultural economy to a robust industrial economy – an evolution observed in many developed countries including the U.S., Japan, South Korea and Taiwan. China is building vital linkages among its agricultural, industrial and service sectors, and systematically encouraging domestic consumption in parallel with a sharp focus on exports. Guided by the firm hand of the government, China’s approach to development has been methodical and deliberate. The results may be far from perfect. The urban-rural economic divide and the impact on the environment may be worsening. On the positive side, though, China’s per capita GDP is now double that of India, although both nations had similar numbers as late as 1991.

In contrast, India is attempting to leapfrog from a predominantly agricultural economy to a knowledge-based service economy. This approach is highlighted as the “shining” beacon of a 21st century economic development model. Bureaucrats and business leaders cite India’s 6% GDP growth over the last decade and the strong growth of India’s software and IT-enabled services (SITS, henceforth) sector in support of the leapfrogging approach. However, they ignore the lack of vital linkages of SITS with the remainder of the Indian economy and...

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