Just read a very interesting post, entitled, “Will India Challenge China? Not yet.” The post is by GE Anderson over at the ChinaBizGov blog. I know GE Anderson to be one very smart guy (with a Ph.d and an upcoming book to prove it) and one damn fine analyst of things China, particularly those things relating to China’s auto industry.

He wrote his post on India after having spent a couple of weeks there. 

Now before anyone points out the shortcomings of views based on a two week visit, let me stop you by saying I both agree and disagree with you (only we lawyers can say things like that). I disagree because one can get a “sense” of a country in two weeks and then use that sense, coupled with previous readings, to glean and then convey one’s impressions. I buy into the idea that first impressions are far more accurate than often credited and I am a huge fan of the book, Blink.

Before I agree with you, I would like to note that I have never been to India and I do not purport to know terribly much about the country. When I was a freshman in college, my freshman tutorial was on India, but since I read only 4 of the 17 books assigned (who the hell assigns 17 books in a freshman tutorial anyway?), I can hardly claim much expertise from that. I should also note that my father served in India during World War II (who the hell serves in India, anyway?) and he absolutely hated the place from the moment he got there to the moment he left. He spent most of his time in New Delhi, which, as I understand it, is a tough place to love. Anyway, his views of the place have always (rightly or wrongly) overly influenced mine. There is one image that has never escaped him (nor me) and that was his arrival into New Delhi by train, where he saw hundreds/thousands of people squatting by the tracks and defecating. He told me this but once and I have never forgotten it.

When I was vacationing in HoiAn, Vietnam, last year, I met a couple of sisters from England who were there doing charity work. One of the sisters lives in London, the other in Goa, India. The one from London had talked of going to India for the charity work, but the one from Goa had dissuaded her by saying that the “entire country smells of human feces from the moment you get there until the moment you leave.” Since hearing that comment I have asked about a dozen people who have been to India whether that is true or not and about half said “yes” and about half said “no.”I am concerned that Dr. Anderson too has been overly influenced in his assessment of India by what I will call the “feces factor,” for lack of a better term.

Dr. Anderson’s post is absolutely excellent, but as an assessment of India’s ability to compete with China, I worry that it leans too much towards describing filth and chaos. Though you can absolutely count me among those who will go a long way to avoid filth and chaos, I am just not sure how relevant that is in assessing a country’s economic future.

india has its problems but it is moving forward economically. China has its problems (some the same as India, some different), but it is moving forward economically.

But let’s get to the core of this. Can India compete with China? Is that a stupid question in that India already competes (and beats) China in many things, including IT and pharma?  Why must we compare the two? And why India and not Indonesia or Vietnam or Brazil or ….? What is it with the whole India versus China thing anyway?

I’m “opening up the “microphones” here so have at it. But please nobody comment without first reading Dr. Anderson’s post.

  • Mark

    “Now before anyone points out the shortcomings of views based on a two week visit, let me stop you by saying I both agree and disagree with you (only we lawyers can say things like that). I disagree because one can get a “sense” of a country in two weeks and then use that sense, coupled with previous readings, to glean and then convey one’s impressions. I buy into the idea that first impressions are far more accurate than often credited and I am a huge fan of the book,”
    Yea, that’s why everyone calls them a Iraq expert or India expert or China expert. Take a vacation in a foreign country and you are an expert educational credentials notwithstanding. I thought only journalists did this.

  • Elemental

    China has had its day. Now that it’s demographics is changing and its wages are rising, the big question for China is whether it has the capacity to be more than just some massive factory. I personally don’t think it does. As you lawyers would say, the jury is still out on India on this score and I think its success in IT actually bodes well for it. So looking out 30 years, I vote India.

  • Jasonno

    These comparisons are stupid and only fan animosities. You running this is irresponsible.

  • Bobby

    Forget about Indonesia. I have spent more than two weeks there and I can tell you that nothing ever gets done there.

  • C.

    ” (who the hell assigns 17 books in a freshman tutorial anyway?)”
    Go to an Oxbridge college. Dons assign 200+ books and articles a week.
    /tangent
    I think you’re right — you can tell a lot based on a short period of time in a country. And a lot of this is due to the media. For example, the fact that CCTV always leads its English news programs with stories about the Yuan’s inflation against the dollar indicates that China’s really worried about America taking actions against the PRC for currency manipulation.
    I haven’t been to India, but my ex in Indian-American. According to him, the Indian media is constantly constructing China as India’s primary competitor. Psychologically, they already view China as their primary competitor. Some people think it’s because China’s getting all the manufacturing contracts, so the uneducated masses have little employment options, which increases crime rates and destabilizes the country.
    Something you won’t understand from a short visit is the implications of the hukou system. In China, the poor people are more or less forced to return to the countryside if they can’t find work as a migrant laborer. In India, they’re free to go wherever they want. They often wind up living in slums. This makes India appear much poorer and dirtier to foreigners. The hukou has its own issues, and I’m not sure which country’s approach is better for reducing poverty in abolute terms or improving the Gini coefficient.
    At least this is what my Jain ex said. I’ve never been to India because, as an unmarried white woman, I’d have a very difficult time traveling there.

  • MHB

    Thanks for your post on comparative fecal studies. This is a topic my brother and I have been researching since we were toddlers. I look forward to your upcoming analysis of Chinese faeces!
    Dr Anderson compares corruption, as measured by the amount of swindlers, and authoritarianism. He begins by remarking on the culture of service in relation to tipping. In both Japan and China, there is no tipping, but in China there is far worse service. Therefore, service is not related to tipping. In both India and China, there is (rampant) corruption, but China is far more authoritarian. Therefore, authoritarianism is not related to corruption. Can we say that “there [is] clearly a much deeper cultural or sociological explanation” for this difference?
    Poverty is not generally considered a human rights abuse, but it is at least as harmful. China has achieved incredible feats lifting its citizens out of poverty. This has been the justification for its authoritarianism. More so, it seems that reducing poverty has motivated Chinese policy.
    But is this the case any more? Will it be in the future? Those first brought up in the lap of luxury are reaching their 20s. Their wealth is international. Chinese decadence is resurging. Is China still focusing internally to improve the lives of its citizens, or is it looking to expand its power outwards? Would such a shift in the drivers for policy affect the social pact between governed and government? Is China in fact becoming more like India, rather than the other way around?
    These are genuine questions, as well as rhetoric, because I know there are many posting on this site with far deeper knowledge than I have.

  • Effie

    Neither. Like you Dan, I see the future in places like Vietnam. I think smaller more homogenous countries like that have inherent advantages.

  • India my Love

    India does smell like human feces. Always. I’ve been here seven years and the smell has never left. Having said that, however, it is my favorite place on earth. The food, the other smells, the people, the energy, the exotic, the future. It’s all here. Come and I will show you.

  • Kenny Zhou
  • I couldn’t agree more on the last and crucial point that Dan is making: our huge interest in comparing China with India really doesn’t make sense. There are two major reasons why I think we’re making this comparison: the fact that we’re intrigued by their commonalities (being located in Asia, world’s top-two populations, emerging economies/military powers) and their differences (mainly democracy/one-party system).
    The point that I would like to make, however, is that we should pay greater attention to the way that they perceive each other. Currently, the relationship between China and India tends to be described (in the West) from an Indian perspective. Whether this is a result of shared norms and concerns regarding China’s rise, or simply a lack of Chinese-language proficiency, I don’t know. But if we believe that China and India will become even more important members of the international community in years ahead, we have to fully understand their relationship. And this relationship is based on perceptions among people in both countries.
    For more on this topic, please take a look at the study “Managing Mutual Mistrust: Understanding Chinese Perspectives on Sino-Indian Relations” (published by the Swedish Defence Research Agency in September 2011) http://foi.se/upload/asia/FOI-R–3271–SE.pdf

  • We at Summit-China and Summit-ZJRC China Business Entry Consultants firmly believe that
    India and China are planets apart. Our observations were made in Vancouver where there are both thriving Chinese and Indian immigrant communities.
    While India will do well in selected export markets, its people as a whole does not have the wherewithal nor, more importantly the adaptability and most importantly tbe purchasing power to match China’s global power.
    We believe that in the next 5 to 10 years purchasing power will be the deciding factor in global power relations.

  • Sick of this place

    Comparisons are always odious and that certainly holds true here. Both of these countries are on different rolls and both have different impediments. I am glad you pointed out the areas where India has done so much better than China because over here in China, everyone (like Dr. Anderson) acts as though it’s no contest. What we need is an expat who lives in india to come over here for two weeks and make the comparision.

  • IT Gujy

    Here’s a really good article that says India will trump China. http://www.time.com/time/world/article/0,8599,1957281,00.html. I find Indian companies to be far more sophisticated and flexible than Chinese companies, but since I am sitting in NYC and hiring them for IT work, I am not the best source for comparison other than in that one industry.

  • Eyes on India

    What about the fact that India is a democracy? Do you think that matters at all?

  • Dan

    @MHB,
    You are very welcome. I should have pitched comparative fecal studies as an independent major while an undergrad. But to be more well-rounded, it would probably make sense to throw urine into the mix.

  • Martin Lu
  • AK

    It’s pointless to declare that since India is less organized it is less able to compete.
    China is richer than India. The difference is huge.
    China 4,382
    India 1,371
    I’ve pasted the 2010 nominal GDP per capita numbers. So it’s expected that India will look less organized and poorer.
    That said China and India started liberalization around the same time in the 1980s. China declared an opening up in 1978 but only gradually proceeded with reforms that accelerated after a decade. India took modest steps towards opening its economy in the 1980s before dramatic changes in 1991. China and India had around the same GDP per capita in 1990 but now 20 years later and despite starting reforms around the same time, China has 3x the GDP per capita.
    Based on performance over the last 30 years, China is the clear winner. That alone is evidence that China will out compete India.

  • MHB

    @Eyes on India – how do you think it matters? For example, do you think democracy would decrease or increase corruption in China (and why)?
    There is a healthy distrust of passing observations made during a two week holiday. Dr Anderson tried to forestall these comments with his anecdote on tipping and service in China and Japan. There are many things that a short holiday cannot tell us – which of China or India will triumph, how their relationship will develop, or what it means for the world, for example.
    But there are many things such a comparison can tell us – culture is taken for granted and unnoticed until it is refracted by the prism of another culture. Some comparisons will be more colourful than others.
    Is the comparison between India and China valuable? Can it show us something about China that we didn’t appreciate or notice before?
    Yes! I have never been to India, but I can now more easily forgive the few instances I witnessed of public pooping in China – it could be much worse! Please see my earlier post for more serious comparisons. Please take the questions on and provide your own comparisons.
    Such comparisons are more than just tourism. Do they share common goals (reduction of poverty? Economic growth?) Do they share common problems (corruption?) How does each culture treat these goals and problems. How do these goals and problems fit into each culture. How do the different attitudes and approaches to these goals and problems differ? What can these differences tell us about cultural values?
    Nevermind China and India, what does the comparison tell you about your own values? Can you accept India’s corruption because it is democratic, but not China’s? Can you accept China’s human rights abuses because it has successfully alleviated poverty? Can you accept India’s poor poverty record because it is democratic? Can you accept India’s poverty because of its caste culture? Can you accept China’s corruption because of its ‘guanxi’ culture?
    Can we dig deep enough to understand the cultural or sociological explanation behind the disparity between Chinese and Japanese service?
    P.S. @Dan – Urine? I’m in, too! (Not sure if that pun works in an American accent…)

  • China Jim

    China is ahead of India. Today yes. But that doesn’t mean it’s “won”.
    India has yet to cash in it’s population dividend. China has just spent theirs.

  • Albert

    Yes. Just like China, India has its strengths and weaknesses and, yes, one of its greatest weaknesses is that it is a very difficult country for those of us troubled by olfactory events.

  • Thanks for the shout-out and the kind words, Dan.
    I have read through the comments, and many have great insights to offer. As Dan points out, and as I tried to make clear in my post, I don’t expect two weeks in India to have made me an India expert (I don’t even consider myself a China expert), but anyone who travels to any place with an open mind will inevitably find himself comparing that experience with all that come before and after. We’re humans; that’s what we do. (And I have a blog, so some people have to read about it.)
    As for whether the two should be compared, I can only say that it would take an extreme lack of curiosity not to want to compare these two countries — especially having visited both of them. I am endlessly fascinated by how different political systems result in different outcomes in terms of development and respect for human rights. I only wish more people in the US government shared a similar curiosity. Are these not among the topics you would love to hear presidential candidates debating? (Yes, too much to hope for, I know.)
    As for the smell of feces in India, I honestly didn’t notice it — either that, or I have spent so much time in China that I have become inured to it. 🙂

  • nathan

    Truly an interesting question. Hard to know which way it will go but you can’t avoid asking it. I thought John Howard had an interesting perspective (via Shanghaiist) recently:
    http://shanghaiist.com/mt/mt-search.fcgi?IncludeBlogs=15&limit=30&search=john+howard&x=0&y=0

  • LH

    One argument that Anderson makes that strikes me as obvious silly is the “squalor and chaos” argument. China became a manufacturing powerhouse because it had a huge population that lived, if not in squalor and chaos, at least at a very low standard of living and public health. Now that Beijing begins to resemble New York and Paris and Tokyo, the edge is coming off China’s competitive advantage for the obvious reason: the squalor and chaos has given way to a higher standard of living. When you’re looking for the next explosive growth story, you have to look to a place where there is a huge opportunity to lift a large number of people up to a different standard of life.

  • It IS hard to get a good picture of ANY country from a visit.
    Let’s listen to the citizens of China and India: 86% of Chinese approve of and trust the Chinese government. 16% of Indians approve of and trust the Government of India.
    If we dig into the stats, as Amartya Sen has done, we can easily see why the discrepancy is so great.
    There really is no serious comparison. China is a 3,000 year old nation. India has not yet turned 70.

    • Surajk1983

      who said india is under 70, india is more older than china. India exist since the inception of civilization, not china….

    • george

      bloody fucker wht do you know about india it exists since the world began ……bloody mother fucker

  • Daiwu

    Remember last year Shanghai students ace the PISA test? Well, recent test scores from India put India right at the bottom of all the countries.
    http://isteve.blogspot.com/2011/12/somebody-else-finally-picks-up-indian.html

  • slim

    People who constantly cite that one Pew poll conveniently ignore or neglect to mention the fact that China — uniquely — did not permit Pew pollsters to ask about politics. So it has little value in comparisons with other countries.

  • Mike

    HAHA very interesting reads. I have many feelings about China being born there and visiting family and working 5 or 6 times at 2 year intervals. My thoughts on China are never finalized, clear, or confident. This is the first time in which I found a group of people commenting about China based on “feel” and minimal quantitative analysis. It’s very refreshing.
    I’m not going to spew out my other scattered thoughts because I know NOTHING about India. China (metropolitan) have some unique traits though, stemming from what others have mentioned. For example, there is a lot of “strategic plotting” such as the whole guanxi thing but also office politics. I feel sometimes that Chinese people are more “clever” like foxes. There is little room for a down-to-earth or a relaxed mentality/personality. It’s pretty dehumanizing in a sense.
    Infrastructure is a big factor for economic growth. But look at natural infrastructure (soil base, climate, natural resources, etc). Isn’t India super hot all over? I don’t think people can work well/fast in hot conditions. China on the other hand have more diverse climate….
    Okay okay, here’s a quant concept to “objectify” things. Growth is compounded. China’s GDP per capita is $4400. India’s GDP per capita is $1500. On a 20 year horizon, if China can experience annualized growth of 3% (extremely conservative perhaps), India needs 9% annual GDP per capita growth to catch up……3% and 9%, those are the two break even numbers right there.
    BUT! Here’s the kicker. Does India have a population control mechanism? China’s 1 china policy improves greatly the chances that population growth does not exceed GDP growth, which means GDP per capita have positive correlation with GDP. If India’s population faster than it’s GDP, then that means GDP per capita will decrease……What does this all mean? Well I can’t state a interpretation because there are many many other factors and implementations involved considering just population vs gdp…..
    Just some random comments.Sorry for messy piece, I’m definitely no writer. Bye.

  • Mike

    Wait wait….disregard the “I’m not going to spew out my other scattered thoughts….” part. I just reread my own post and that state had been an outright lie. My apologizes. Everything else is factual though. Peace

  • Aaron

    1st, Dr. Anderson’s entire section on evolving view of India and China is a self-contradiction in logic. On 1 hand, he claims that the view of “Democracy” is to blame is too simplistic to explain India’s problems. On the other hand, he himself generalizes an equally simplistic view of China, that China does not have “personal freedoms” and does not want any development in personal freedoms. Er, such generalized statements are obviously untrue. China has different priorities for personal freedoms, choosing higher priorities for economic freedoms.
    2nd, such generalized statements only demonstrate that Dr. Anderson’s personal “wants” for India are clouding his views on India – China dynamics.
    For 1, I think he’s seriously underestimating Chinese leadership’s ability to perceive the problems of India and China, portraying the Chinese leaders as willing to accept simplistic views as he puts it (without so much as trying to annecdotally proving it). If any thing, Chinese leadership understand the complexity of problems with various political systems, and that is why they consistently refused to accept the simplistic view that some “Democracy” would cure all their problems. That is not a simplistic view, that is pragmatism.
    3rd, a comment on Dan’s intro with the “feces” story.
    I can see why some commenters are offended by that. But I also want to point out that this story illustrates not a India-China issue, but an underlying issue of waning Western influence in the world.
    When people ask why US and Europe aren’t engaged enough, invested enough in poor nations, say in Africa, while China is making head ways, we can point to Dan’s story about how 1st Nation people can’t stand the smell. And the point is, Development is a 2 way street. Don’t just talk about India or China as “developing” themselves, but whether the West is developing WITH them. Because at the end of the day, if China (or India) develops (and they will sooner or later), and the West did not invest in that, (because of some thing that smells offensive), then the West would miss out and stagnate.

  • Several years ago, I reviewed Pallavi Aiyar’s great book on India vs. China for The New York Times. Unlike GE Anderson, Aiyar was born and raised in India, but also worked in Beijing as a foreign correspondent.
    http://www.nytimes.com/2008/07/16/arts/16iht-bookwed.html
    It’s more of a personal memoir than an academic study, though she does touch on issues like press freedom, Tibet, economic development, etc. The book is a few years old now, but I think its general observations still hold true.

  • Jing

    India will never be able to mount any significant challenge to China and it’s so-called “demographic dividend” is a flight of fancy of deluded idiots who’s idea of slumming it is absconding from the first class airport lounge.
    China is ahead and it’s lead will grow not because of infrastructure, or authoritarianism, or India’s chaos but because of one simple factor, the Chinese people.
    China possess an insurmountable advantage in human capital over India and every other non-OECD economy (and most OECD countries for that matter). It has a healthy, increasingly better educated, workforce that is becoming more capital intensive as the population growth stalls. It is productivity growth and per capita capital accretion and investment that creates prosperity, not warm bodies. A fact lost upon some people.

  • I am just getting to Dr. Anderson’s post now after a trip to Hoi An myself- awesome place. That said, after working with two organizations over the past sixteen months that are focused on sanitation (or lack thereof) and that concentrate some of their efforts on India, I can attest from our research that the majority of rural India is toiletless, and that estimates of up to half of Indians practice open defecation. It is, in fact, an important feature of India’s development and sanitation organizations have an uphill battle in changing this behavior. Readers should not be offended by this- toiletlessness is a fact of life for about 40% of the world and India just happens to be a country with a pretty high rate. That stated- while I’ve read the stories and seen the pictures- like you, I’ve never actually been there myself nor have any burning desire to go.
    Thankfully, Dr. Anderson can fill us in. What really shocked me about his learnings was the comparison he made regarding corruption: “in terms of scams and general corruption, I used to think the Chinese were masters at cheating foreigners, but they have nothing on the Indians I encountered on the tourist track. By comparison, the Chinese are rank amateurs.” While the high level of government corruption in India gets a lot of press attention, far less is given to that occurring in the business world or just day to day operations.
    Great post, but Dr. Anderson misses one similarity between India and China: India’s fog may ground planes regularly, but flights in and out of Beijing are delayed because of pollution, which is definitely getting worse!

  • Farley

    @Jing – then how do you explain the growth rates? On the other hand, lets just go with the flow here and say China rules and India is full of feces. Happy now?

  • Anthony

    I’ve worked with both Chinese and Indian companies, and don’t see Indian companies as more sophisticated as some journalists claim. In comparing apples with apples, that is – non-state enterprises, I would conclude both Indian and Chinese firms are at about the same level of marketing, financial and managerial sophistication. There are inevitable variations due to cultural and historical factors.
    Also when it comes on IT, I would very confidently say Chinese IT is ahead of Indian IT; Indian IT firms concentrate on BPO outsourcing, they are very mature in this market segment but BPO is the low-end of IT, not unlike making glass windows, seats and dashboards for automobile. The meat of IT is writing source codes. In China, IT firms have more experience in writing source codes for manufacturing and state enterprises. Last year, the world’s fastest supercomputer (now second fastest) was built and programmed by Chinese engineers. Although the CPUs were imported from the US, writing the parallel programme software was an outstanding feat by these engineers.

    • Nex

      Until India produce something remotely as good as in terms of overall trade value, credibility, ease of use and speed of logistics as China’s Taobao their IT skills will always be massively overrated.

  • Marty

    You raise a very good point when you talk about the stench and filth of India. Some may find that sort of thing irrelevant or even funny, but it is highly relevant It is highly relevant for a business like ours, which is architectural design. We needed to set up an outsourcing center for our drawings. We needed about 50 architects and drafts-persons and designers for this and it came down to China and India. China was more expensive, but we chose it because our three architects who would need to go to the outsourcing office every few months for weeks at a time, just did not want to go to India. Take our situation and multiply it out and you can see how this sort of thing can matter.

    • Seva K74

      Interesting analysis… You take one sample and then just multiply that. Its like asking a democrat or a republican who he would vote for and then multiply with the entire US population to arrive at the winner. If only things were so simple…

  • Handan

    I find Dr. Anderson’s comparisons patchy and incoherent. His observations of China, like calling China homogeneous, are crude. Reading through, I keep thinking that he doesn’t understand the true price Chinese people have been paying for the shiny economic achievements.

  • Chloe

    After complaining about the grimy streets here in China, a local Chinese person informed me that India was a “far dirtier place,” so I can only imagine.

  • Jing

    @Farley – Poop or lack of it has nothing to do with it. It’s things like this
    http://prayatna.typepad.com/education/2012/01/india-in-pisa-2009-results-from-hp-and-tn.html
    That ultimately limit India’s long term potential.

  • Muckracker

    How would a Chinese person know India is far dirtier? I think a lot of this comments are border line race bashing IMHO.

  • Seema Bendhi

    @Jing – that study compares Himachal Pradesh, one of India’s poorest states, with Shanghai. If you want to draw conclusions, make them sensible ones.

  • India is good at making labor-intensive products, and comparatively, China’s advantage lies in building infrastructure, for example, airport, or subway. India needs more investment from China on infrastructure construction, not competition in service or labor-intensive products. I read in the website of Daxue Consulting some useful information about India China business, and as a student , I think it taught me something.

  • http://www.fountainheadforum.com/Downloads/Developed%20india%20and%20world.pdf
    check out this link and get some gyan.before degrading a great country and people