“Who’s going to win the race”.

As the year passed by there were many incidents, events and milestones that we encountered. I am sure that the weekly magazines, the newspapers and the media will showcase these in different hues and shades. So please keep tab for these for the first week of Jan. But one question that always triggered me was the China and India ‘s race for “Who’s going to win the race”.

In the corridors of international power, there is a new discourse emerging. It is about the rise of India and China. Neither ascent is viewed as certain but the odds are high that both nations, desperately poor until recently but now showing signs of economic dynamism. What is driving this dynamism? What can probably derail this growth?

As far as India is concerned the rationale for this growth is founded on three factors primarily as far as I think. They are the intellectual capital/labor (what if cheap), democratic resilience and economic dynamism.

Unlike China, India’s economic success has been led by the service sector, not by the manufacturing. Information technology is the most visible face of the India’s economic surge, even though it constitutes less than 5 % of India’s GDP.Few days back I was searching the net for good material as I was scribbling a paper for a contest conducted by Wharton School of Business through Economic Times in India. I found a Larry King Live interview of former president Bill Clinton where in he made a stunning claim that half of the world’s software is made in India. Clinton perhaps to me made an overstatement but even if it half true, it speaks volumes about the perception in elite circles all over the world. Leaving a mark in high technology and service areas is never easy in a developing economy. India’s IT revolution lifts the entire country in international eyes and lends confidence to the business sector in India raising corporate ambitions and creating self-belief. A company like Infosys, the new age emblem of Indianism today inspires small businesses in India to rise from below. I feel we have not lost much even though we missed the manufacturing bus in time, the clock has made a full circle now. Last year saw some behemoth-manufacturing giants investing huge amounts in India.

I am no great a political analyst nor does politics interest me but I feel whatever form of democracy may it be,it has done more to India. India’s democracy is not flawless but tell me who knows what a flawless democracy is. And no other country can match India’s democratic record, however faulty it may seem to be to its middle classes. This democratic form is one of the shining jewels and for China to get a seat in the highest table, its polity will have to become democratic. India’s edge on this score is massive. To quote a simple example, when China builds its highways it displaces the poor and forcibly relocates them. In India that is virtually inconceivable. China has managed to privatize its public sector and retrench extra workers. Indian polity remains highly resistant to both. This of course doesn’t mean that India’s democracy is the villain of the piece. The real and core issue is not democracy but the nature of Indian growth which should go in sync with the huge population she carries. India’s economic dynamism constitutes a huge paradox comprising achievement and failure simultaneously. Example: Assume a chief tech officer of Intel Corp is leaving the Bangalore Airport and heading towards the Taj Residency hotel, he will definitely feel elated when he sees the Intel’s impressive building where some of the latest chips are designed and some brilliant R&D work is happening but then the long drive will alert him of the infrastructural failure.

China’s economy is manufacturing-led. Manufacturing any day is more labor absorbing than IT. As its economy grew, China could create jobs for its millions of poor who had already been made literate by a huge public investment in primary education. In China, thus the market driven growth became hugely poverty reducing and set the ball rolling but not in India. As long as there is poverty in India, the economic momentum will be viewed with mixed respect. China has a clear edge here but in spite of its negatives, India has shown a growth of 6+ per cent year on year, which has attracted international attention.

Well I can continue here for loads but let me stop my blog here (another reason,its sunday late night and have to start for work tomorrow). I will share the paper I scribbled in this site (India Vs China). Wow!! today is the first day of the year but then I started with something, which I had thought of penning long back. New Year’s Day, what’s that its just another day and one more year added to my number of years of existence on this planet Put in simple words, I have decided on for something this year and I will disclose it in due course (that’s my first love and passion and I love him/her/it passionately, no questions on that please. Before you draw any conclusions if you think I belong to Elton John’s category, I am not so leave apart option one and that leaves two options.)

Keep reading and remainconnected….