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Javier E

India Is Passing China in Population. Can Its Economy Ever Do the Same? - The New York ... - 0 views

  • The two nations share several historical parallels. The last time they traded places in population, in the 18th century or earlier, the Mughals ruled India and the Qing dynasty was expanding the borders of China; between them they were perhaps the richest empires that had ever existed
  • But as European powers went on to colonize most of the planet and then industrialized at home, the people of India and China became among the world’s poorest.
  • As recently as 1990, the two countries were still on essentially the same footing, with a roughly equal economic output per capita. Since then, China has shaken the world by creating more wealth than any other country in history. While India, too, has picked itself back up in the three decades since it liberalized its economy, it remains well behind in many of the most basic scales.
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  • Today, China’s economy is roughly five times the size of India’s. The average citizen of China has an economic output of almost $13,000 a year, while the average Indian’s is less than $2,500
  • In human-development indicators, the contrast is even sharper, with infant mortality rates much higher in India, life expectancy lower and access to sanitation less prevalent.
  • The divergence, analysts say, comes down largely to China’s central consolidation of policy power, an earlier start in opening up its economy to market forces starting in the late 1970s, and its single-minded focus on export-led growth.
  • China took the first-mover advantage and then compounded its dominance as it pursued its plans relentlessly.
  • India started opening its quasi-socialist economy nearly a decade later. Its approach remained piecemeal, constrained by tricky coalition politics and the competing interests of industrialists, unions, farmers and factions across its social spectrum.
  • “There is that element where China is a natural role model — not for its politics, but for the sheer efficiency,”
  • The world now has a radically different power structure than it did in 1990. China has already made itself the world’s factory, all but closing off any path India could take to competitive dominance in export-driven manufacturing.
  • A “Make in India” campaign, inaugurated by Mr. Modi in 2014, has been stuttering ever since. Wage costs are lower in India than in China, but much of the work force is poorly educated, and the country has struggled to attract private investment with its restrictive labor laws and other impediments to business, including lingering protectionism.
  • service-sector growth can go only so far in reaping India’s promise of a demographic dividend, or blunt the peril of an unemployment crisis. Hundreds of millions of people can’t find jobs or are underemployed in work that pays too little.
  • the employment entrance exams at government agencies. These jobs are still coveted as private sector work remains limited and less stable.
  • 650,000 students will apply for just 600 or 700 jobs in the national civil service this year.
  • The civil service is a tiny part of the work force, but it is prestigious — in part because it comes with job security for life. Most applicants spend years, and a big chunk of their family’s savings, and still fail to make the cut.
  • “Here there is no enterprise, no companies,” Mr. Kumar said. For any young person, “the question comes, ‘What next? What can I do?’”
  • The lessons Mr. Modi is taking from China are most apparent in his push for infrastructure development, investing heavily in highways, railways and airports to improve supply chains and connectivity.
  • India has quintupled its annual spending on roads and railways during Mr. Modi’s nine years in power
  • As Mr. Modi has boxed in opponents, cowed the press and overwhelmed independent elements of civil society, his government has lashed out at expressions of concern from abroad as evidence of a colonial plot to undermine India or a lack of understanding of India’s “civilizational” approach — both elements that diplomats had long heard in China’s own defensiveness.
  • All the while, the increasing militancy of his Hindu nationalist supporters, as arms of the state hang back and give perpetrators a free pass, exacerbates India’s religious fault lines and clashes that threaten to disrupt India’s rise.
  • Even as India tries to align its growing technological and economic capacity to capitalize on the Western tensions with China, it is determined to stick to its neutrality and maintain a balancing act between the United States and Russia. There is also the question of whether the West’s shift from China, the linchpin of the global economy, is a temporary recalibration or a more fundamental one.
  • “China took advantage of a favorable geopolitical moment to really transform itself by having access to technology, to capital, to markets led by the United States. It took advantage of that to build itself up,” Mr. Saran said. “This could be that moment for India.”
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