China and India were economic superpowers in 18th century, accounting for almost 40% of the world’s GDP. They were agro based economies and derived their wealth from exporting food grains, spices, cotton, textiles, tea, and not to forget, opium. They also exported art, science, medicine, culture, music and philosophy. However, the Industrial Revolution in western countries changed the scenario. By the 19th century India was under political and economic subjugation and China was under economic subjugation, reducing both the countries to abject poverty.
World War II (1939-1945) devastated the once dominant western countries, Russia and Japan. And it presented a glorious opportunity to India and China to regain their supremacy in the economic affairs of the world. India had a strong military 25 lakh strong! She had basic industry. She was producing automobiles, railways, ships and aircraft. Just as Japan developed her economy by becoming a supplier to the war ravaged western world after the First World War, India could have rapidly developed economically by becoming a supplier of industrial goods and by sending her people to build the infrastructure of the western world. But India lacked confidence in her own abilities. Her entrepreneurial class was not encouraged to become global players. The aftermath of the bloody partition sapped her energies, and she lost the golden opportunity.
‘Just as Japan developed her economy by becoming a supplier to the war ravaged western world after the First World War, India could have rapidly developed economically by becoming a supplier of industrial goods and by sending her people to build the infrastructure of the western world’
China, too, got carried away by the Communist model that was ruthlessly implemented by Mao Zedong. It led to its economic ruin.
But by now, China has become an economic superpower, second only to USA in GDP. India has a long way to go but has started its journey in that direction. How did this happen? And will the two of them regain their supremacy they once enjoyed?
Mao Zedong, ironically, laid the groundwork for China’s progress. He abolished gender inequality. All women must work, he decreed. That increased China’s workforce by 100%. He unleashed the Cultural Revolution that turned people’s attention away from religion and festivals. He made ‘materialism’ the new religion. Money became God for the Chinese. He forced people to leave their villages and go to towns. Towns had schools and hospitals. That improved the education and health of the entire Chinese people. He built roads to enable farmers to cycle to their farms while their children went to schools. Realising that population control was a priority, he enforced the ‘one child’ policy. He nationalised land. That gave the government enormous strength that was brilliantly exploited by Deng after Mao’s death.
Deng established ‘Special Economic Zones’ on Chinese shores. He invited foreigners to come and set up factories to manufacture labour intensive goods. These factories were exempted from labour laws. That provided employment to millions of Chinese. He also exhorted inland Chinese-owned factories to concentrate on export. Any loss they made was compensated by offering them a piece of land on a 99 year lease on which they could build houses to be given on rent to migrant workers. That had triple benefits. Export boomed. Employment was provided to construction workers who built the houses. And migrant workers got houses to stay. All at no cost to the government. A booming export brought in foreign exchange surplus of a monumental size. China invested that surplus in buying mines all over the world, especially in Africa. That gave China control on minerals to fuel her industrial boom. China imbibed modern technology by inviting Chinese expatriates to return to their homeland and bring technical knowledge with them. Chinese entrepreneurs rose to the occasion and created products for the mass Chinese market and also for the world market. The Chinese government invested heavily in infrastructure. New super cities were created connected to each other by high speed mass transit trains. China continues to boom. It is a unified country with one single aim: to overtake America in prosperity and power.
Are there any road bumps ahead? Ecological disaster looms ahead as China continues to plunder her natural resources. But China is well aware of the dangers ahead and is taking the required correctives steps. People’s aspirations for freedom of speech and dissent are presently being suppressed and that may lead to an explosive situation if the economic boom hits a roadblock. Corruption has become rampant and would reduce the speed of the Chinese economy. President Xi is mindful of that danger and is keen to take corrective steps but how far will he succeed? China is a dictatorship and may enter into a military adventure that may severely damage her economy, just like Nazi dictatorship did in Germany. But I am sure, Chinese leadership will find solutions to all these issues, committed as they are to make China regain its supremacy in the nearest future.
‘The Chinese government invested heavily in infrastructure. New super cities were created and connected to each other by high speed mass transit trains. China continues to boom. It is a unified country with one single aim: to overtake America...’
What about India? She had a head start over China but is lagging behind China by almost two decades. China liberalised in 1975 but at that time India went into reverse gear by the so called ‘Garibi Hatao’ policies (as well as coal and bank nationalisation). It was only in 1991 that India started taking corrective steps. Yet even after 25 years many important agenda items remain unfinished, nay untouched. India can also aspire to be a factory to the world like China. But she lacks political will to reform labour laws. Yet, India has good prospects if she realises that her destiny lies in the services sector. Information Technology has shown the way. India can replicate that story in the medical sector. The cost of medical treatment in India is one tenth of the treatment in USA. Americans who are not fully covered by medical insurance can come to India for medical treatment, rest and recuperation. The western world can look up to India for mental peace as well. India can offer yoga and meditation experience to them. Tourism is another sector where India can offer unmatched treasures to the world. All that she has to do is to keep the country clean and eliminate juggi jhopadis. Andaman, Nicobar and Laccadive islands can be developed to allure millions of tourists. Indian movies, music, dance, fashion and jewellery can be as important as the IT sector. Indian teachers, doctors, nurses, nuns are already well regarded in the world. India can develop centres to develop them. Let us not forget high tech sectors like Space, Defence and R & D. If India cannot become a factory to the world, she can become the R & D centre of the world.
Are there road bumps ahead? Plenty. Rural India, euphemistically called Bharat, remains mired in poverty, poor health and poor education. India cannot progress unless Bharat catches up with her. Reforms have to be ushered in and corruption has to be weeded out. India also has to ensure peace externally and internally, to be able to concentrate on realising her manifest destiny. But I am hopeful that it will happen soon, may not be as fast as we wish, but let us keep faith.
By Arun Firodia
