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China vs. India On Poverty Reduction. China Gets The Kudos Here.

By Dan Harris on Posted in China Business

When people criticize China too harshly, I like pointing out the incredible (unprecedented?) job it has done in bringing its people out of poverty. Don’t get me wrong. Hundreds of millions in China still suffer from real poverty, but compared to China’s recent history, the transformation has been, well, transformative. Starvation and illiteracy have been nearly eradicated. China still has a long way to go (what country other than Denmark, Sweden, and Norway do not?), but that should not detract from what it has done.

I was reminded of that today when I spoke with a client who just returned from a month in India and then read a depressing Wall Street Journal article, entitled, “In India, Doubts Gather Over Rising Giant’s Course,” The article notes how India’s increased wealth has failed to trickle down. It’s a fascinating article and it only reinforces what China has accomplished. 

Read it and then let us know what you think. Has China been that much more successful than India in ameliorating poverty? If so, why do you suppose that is?  Communism versus capitalism?  Manufacturing versus service industry? Cultural differences regarding equality or poverty? Something else?

Speak now or forever hold your peace.

  • http://www.sjgrand.cn Paul

    The communism vs capitalism question needs some clarification. The various experiments in ‘pure’ communism of the 1950-70s created some of the most disastrous periods of poverty/starvation in China’s recent history. When the government started to loosen its stranglehold on the country’s entrepreneurs is the moment living standards started to rise. We should consider whether the amelioration of poverty has progressed despite not because of government. Semantics perhaps but by “China” I think it’s the Chinese people, not its government that deserves the kudos. The government should be acknowledged but not praised for simply allowing its people the freedom to engage in less restricted commerce. That should be a universal right.

  • Bob Woods

    The search for truth means being willing to enter into some very un-p.c. realms.
    China’s average IQ is 103 or so, while India’s is around 83.
    Can facts be racist?

  • outcast

    Even though they started from similar places, China’s path was to focus on manufacturing and infrastructure. Given the situation at the time, bottomless pools of uneducated farmers, this made a lot of sense because as much as they suck, factories and sweatshops (usually) provide a much better source of income than subsistence farming, thereby allowing more of the wealth to trickle down. This is essentially a sped up version of what happened in the west during the Victorian Era.
    India on the otherhand tried to leapfrog industrialization by jumping straight into services, which has resulted in a much larger gap than what exists in China because services locks out most of the bottomless pools of uneducated farmers, preventing them from urbanizing in a meaningful way and creating some of the largest slums in the world. There have been other non-resource rich countries that tried to do this, Egypt comes to mind first and foremost, but they all fell down for the same reasons.
    It is highly questionable that either of them will attain a western standard of success anytime soon, if ever. Too much is fundementally missing in both of these nations which needs to be added if it is going to avoid getting trapped in the $10,000 per capita gdp slot, otherwise they will both just end up puttering along like Malaysia. One thing is for sure though, they aren’t going anywhere.

  • http://www.inpraiseofchina.com Godfree Roberts

    I have long been puzzled by India’s growth stats, which seem implausible given its lack of infrastructure. As Steven Roach observed, the Indian government seems to wait for the Chinese to publish their annual growth figures and then make up figures deemed plausible by the (very credulous) Western media.
    Even more puzzling is India’s corruption ranking by Western NGOs: they continually salute India for being less corrupt than China. Who are we kidding here? India has no infrastructure, horrific malnutrition, terrible illiteracy, all largely thanks to a predatory political and bureaucratic class of almost unimaginable corruption, criminality and incompetence.
    This speaks as much to political bias as to the Western media’s focus on elites and dismissal of broad social programs as ‘populism’. India’s elites are doing fine, as are China’s. The remaining 70% of India’s people who are sinking–while the bulk of Chinese are rising.

  • Uncle Sam

    Everyone should stick to China. India is dirty and hot and has inedible food.

  • Jing

    Most of what is written vis-a-vis the Chinese and Indian economies and societies are outright lies and disseminated misinformation in service to powerful and strongly held delusions.
    India is a much more unequal society than China because it is a much more racially heterodox society than China. The standard deviation of aptitude is much higher in India and than in China as a result of this. Diglossia in a semi-literate society only compounds the differences between the advantaged and the disadvantaged.
    Reference here.
    http://www.people.fas.harvard.edu/~tzajonc/india_shining_jan27_flat.pdf
    Testing in India shows a standard deviation in capability second only to South Africa. The facts are obvious to any truth seeker, but shrouded to the bourgeois sensibilities of India’s Anglophone elite who delude themselves otherwise, that is until the time comes for their children’s pending nuptials.

  • dan berg

    It’s important to notice WHEN this dramatic reduction in poverty was accomplished – mostly in the early 80s; in the early 90s real poverty rates increased and have very slowly drifted down ever since.

  • Prad Bit

    Yeah, India’s full of crap and illiterates and stinking poverty. Anyone who says it isn’t is a bare faced liar that should be made to eat vindaloo for a week and see how they REALLY like it. Nasty fly ridden disease infested corrupt country with no redeeming features whose main man turns out to have been a racist. Yes that is Gandhi I’m talking about in a WSJ review of a new book: http://www.rawstory.com/rs/2011/03/26/was-gandhi-gay/
    India is for losers and wannabes lost in yogic dreamland.

  • No Mas

    It makes no sense to compare China and India because all it does is bring out the haters and each country can stand alone anyway.

  • vpseth

    Indian PM admits that India is way behind in defence establishments. I do not see any field where India is ahead of CHINA, except Bolly wood, Cheaper medical facility, corrouption ( way ahead) , hipocracy, of course in population we will beat china in 20 years or less.
    I never wanted to come to China for work, but my daughter prompted me and I came. I do not think China was better place than India in any respect only 30 years before( except corruption in high places). What wounders are done by people/ Government that they are so ahead from Us, I think hard work/ Honesty amoung 95% people yes 5% top are corrupt here also/ very very stiff punishments for crimes and love for country. China has very few traitors as compared to India seen in all sections of society.
    I wish china should prosper more and more and our leaders and people should learn from them and also improve if not serpadss.
    Good luck.

  • Eugene Czarnecki

    I have been to second tier cities in china like Changsha and yue yang city both in hunan province of china. Both of these cities are much cleaner with better infrastructure and the food is of high quality famous hunan cuisine. Indian capital New Dehli is very dirty and the food in general is terrible. In my opinion China is way above India.

  • Eugene Czarnecki

    I have been to second tier cities in china like Changsha and yue yang city both in hunan province of china. Both of these cities are much cleaner with better infrastructure and the food is of high quality famous hunan cuisine. Indian capital New Dehli is very dirty and the food in general is terrible. In my opinion China is way above India.

  • Eugene Czarnecki

    I have been to second tier cities in china like Changsha and yue yang city both in hunan province of china. Both of these cities are much cleaner with better infrastructure and the food is of high quality famous hunan cuisine. Indian capital New Dehli is very dirty and the food in general is terrible. In my opinion China is way above India.

  • tango_r

    Sure but at what cost. As  bay area resident We have a lot of poverty in Oakland. Following the chinese solution would mean simply picking up people from their homes and transplanting them into farming communities. 

    True the Chinese have done wonders in development, But it was done using the something that is uniquely chinese. Almost every democratic country in the world has tried this (the Projects in NY comes to mind) and its always failed. 
    The chinese way of forcing million of people to uproot or giving them jobs that no one else wants simply does not work in democratic societies. 
    A simple example of slum dwellers in Mumbai comes to mind too. For many decades the government has been trying to get people to move. But people simple do not want to move because its their home. You can’t just force people to move.