India, following years of British colonial rule, gained independence in 1947 and in turn ‘became the world’s largest democracy’ (Calvocoressi, 1982, p. 274). However, India did not open its economy fully until after the macro-economic crisis in 1991. Although India always had a large private sector, this wasn’t fully taken advantage of until after these reforms. Since the 1991 economic reforms, although successful in part, India has had ‘relatively modest growth, and is falling behind on many fronts relative to the Chinese performance indicators’ (Basu, 2009, p. 58). World Bank data shows that India’s annual average GDP growth between 2004-2012 was 7.63%, whereas China’s was 10.51%, further supporting this point.
China’s, on the other hand, is the exact reverse. Following the victory of Mao Zedong, the leader of the Chinese Communist Party (CCP) in 1949, China is a ‘large but stable, centrally run state, and has been through its history’ (Desai, 2003, p. 3). China, to this day, continues to be ruled under this system, and the economy has flourished under it. China was a closed, centrally planned, non-market economy until 1978 when, under the reforms of Deng Xiaoping, it opened its economy and its economic rise began. ‘China reformed earlier and much more aggressively’ than India (Bloom et al., 2006, p. 5) and its economic performance has been extraordinary. China’s growth miracle has been achieved by the relaxation of some of the party’s controls, and statistics support this. ‘In 2010, its economy was 47 times larger than it was in 1980’ (Ford, 2011, p. 2).
Linking in with the two countries’ emergence is the comparison between their political systems. As noted previously, governance in India is undertaken democratically. However, China is still ruled under a single-party system, of which Communism is at the helm. Although democracy has been widely promoted in the West in the 20th century, it is evident that this is a contributing factor to India’s slower growth rate compared to China because decision-making is so difficult whereas in China, leadership diktat sets a direction brooking no opposition. Many scholars agree with this notion. Bardhan (2006, p. 14) is one who has said that often reforms can put India ‘two steps forward and one step backward’ simply because of the struggle it is to get reforms passed. Smith (2007, p. 172) is another who describes India’s system of rule as ‘a bustling, messy, sometimes near-anarchic democracy’. The advantages given to China are that ‘they are a fast-acting government implementing new policies’ where bureaucratic constraints are not an issue, therefore speeding up the capability to grow (Soil, 2011, p. 3).
This consequently means that ‘when the leadership … wants something done it gets done, from grandiose infrastructure projects downwards’ (Smith, 2007, p. 172). Contrastingly, India struggles to implement policy reforms, and the ability to speedily build up infrastructure is a real constraint. A number of scholars have been critical of India’s processes. Comments include that ‘India’s political system appears sluggish’ (Soil, 2011, p. 3). Other suggestions include ‘when India’s political leaders want something done they hope and pray it will happen’ (Smith, 2007, p. 172). Supporting this idea, the benefit of having an authoritarian, single-party government like China, means that plans can be made long in to the future without the worry of getting voted out of power. This is key in India, given it faces a regular electoral cycle, the next elections being May 2014 Hence there is a potentially a new direction for the country after each poll, whereas China is better aware of what its future aspirations are, and working to achieve them with a greater sense of purpose. Desai (2003, p. 17) states that ‘for India, any hope of growing faster depends on less government rather than more’. So the contrast shows that sometimes democracy is less effective than authoritarianism, because achieving an agreed strategy and general consensus can be problematic, which is not to say that China’ approach is intellectually better. However, it is economically more effective, at present anyway.
Bardhan, P., (2006) ‘Awakening Giants, Feet of Clay: A Comparative Assessment of the Rise of China and India’, Journal of South Asian Development, 1(1), pp. 1-17.
Basu, S., (2009) ‘Comparing China and India: Is the dividend of economic reforms polarised?’, The European Journal of Comparative Economics, 6(1), pp. 57-99.
Bloom D., Canning D., Hu L., Liu Y., Mahal A., Yip W., (2006) ‘Why Has China’s Economy Taken Off Faster than India’s?’, Harvard School of Public Health, (), pp. 1-39.
Calvocoressi P., (1982) World politics since 1945, 4th edn., London and New York: Longman.
Desai M., (2003) India and China: An Essay In Comparative Political Economy, Delhi: IMF.
Ford B., (2011) China vs. India: Differences, similarities and prospects, Singapore: Australian Government.
School of Inspired Leadership (2011) India and China: An Economy Comparison, : School of Inspired Leadership.
Smith D., (2007) The Dragon and the Elephant: China, India and the New World Order, London: Profile Books Ltd.