China’s spectacular rise in recent decades is unparalleled. The People’s Republic of China was established 70 years ago in conditions of economic misery. As a result of its profound economic transformation, China has led India for the past 20 years. In 1987, the (nominal) GDP of both countries was almost the same. But in 2019, China’s GDP is 4.78 times greater than India.
China’s GDP is 2.38x from India. China crossed the $ 1 trillion mark in 1998, while India crossed in 2007. Making the economy work Mao Zedong, the revolutionary leader, was unable to put the country on economic progress. In 1978, when Mao died, China was fighting against the ever-expanding population and uncontrollable poverty. Still, after Mao Zedong’s death, China’s new leadership began to open up its economy by inviting foreign investment to facilitate exports and Import: China’s regime began to free agriculture from state control. He enforced the one-child policy to defuse the population bomb and then use the population dividend.
Here are the following reasons, consistent with the experts, why China is ahead of India.
“Once committed to focusing on the economic process, some good policy decisions were implemented quickly and efficiently. From the moment Deng (Xiaoping) established the leadership 25 years ago, it has not been altered by politics of parties, ideology, or leadership changes”, says Kenneth J Dewoskin, Senior Consultant, PricewaterhouseCoopers (China). While corporate leaders in India agree that this could be true, they are emphatic that vibrant India’s democracy is the only way for the country to ensure that growth and development reach everyone.
According to Dewoskin, who has been involved in China for the past 40 years, China has a high savings rate, which recycles and concentrates the wages paid to workers in four large state banks. This capital has systematically financed 85% of China’s investment in infrastructure.
China’s leadership has always focused on investment in models and showcases. All of this has helped channel foreign direct investment into the country and has helped to create local economic development. For example, Shenzhen and Zhangjiagang became fantastic models that would help to sell not only the region, but also China as a whole to Investors – China created impressive gateways for visiting foreign investors – Beijing and Shanghai airports, the Pudong Development Zone, and Beijing Financial Street are just a few examples.
China has sold itself on one point: the dimensions of its market. “Every businessman of any size anywhere in the world knows what the 1.3 billion dollar means – the enormous market in China. Chinese leaders immediately discarded their Mao suits and put on coats and ties, spoke the language of business, organized thousands of delegations, organized endless conferences and exhibitions, and worked to convince foreign investors that China was business-friendly, stable and committed with the reform and an open door,” suggests Dewoskin.
China has created many flexible investment zones, export processing zones, commercial zones, high-tech zones, tax incentives, and excellent infrastructure. India has tried to duplicate this with its creation of zones of Export Processing and Software Technology Parks.
Especially “China has had the great fortune to leave Hong Kong and Taiwan out of its political control for many years or centuries, but within the Chinese ethnic and investment family,” says Dewoskin. “China always leaves out political, social, and ideological differences to obtain investment, technology, and export channels”, he adds. However, in India, the commercial and economic process has not been paramount. The budgetary process in India has always yielded to the emotions of the local industry, as in cases where foreign investments are restricted or restricted.
Much of the 60 million Chinese living outside the country are economic forces to be reckoned with. But they also reimburse their country a lot in terms of remittances and investments. China has recognized the importance of its diaspora and has worked to cultivate it. The Chinese government has a special cabinet ministry to affect the Chinese issue abroad. Incentives are offered to non-resident Chinese.