How China beat India to become a Global Power

Both Indian as well as Chinese civilizations are one of the oldest civilizations of world. When the inhabitants of ancient Europe were in the state of hunters and gatherers, both Indian and Chinese civilizations were broadening the dimensions of Urbanization. Both civilization saw emerging and decline of many empires over the period like the Nandas,Mauryas,Guptas in India and Zhou,Qin,Han in China.

Both were religiously inclined and utmost importance was given philosophy and faith. In India, Vedic traditions dominated in the early era and later other sects also involved like Buddhism,Jainism,Ajivika and Shramana etc.

Whereas Confucianism, Taoism, and Buddhism were the three main philosophies and religions of ancient China, which have individually and collectively influenced ancient and modern Chinese society.

But the point of discussion is not the comparison between ancient cultures of India and China , we only discussed it so as to look for any particular cause that made China of today a superpower, but we find none as such. Both India and China were thriving civilizations in the past.

So what changed in Present, how China's GDP is $ 14.9 trillion dollars and we are only at $2.6 trillion dollars( Nominal terms).

Lets find the reasons..................

Upto the early 1980's , both the GDP of China and India were almost identical but then came Den Xiaoping. After Mao Zedong he is regarded as the greatest of all chinese premiers. What  Narsimha Rao did in 1991 for India i.e. opening up of economy, Xiaoping did it for China in 1978. Although Chinese economy opened much earlier than us , there was also a greater difference in the model also as both the countries follow different political systems. India was a democratic country and China was a Communist.

But how come  a communist country deregulate its markets, its goes against the very principle of Communism. Here what Den Xiaoping played its best, he categorically said that only Chinese economy will act on Capitalist principle but the political system will always remain Communist to the core.

REFORMS UNDER XIAOPING

Combination of Capitalism and Communism, whereas the former applies to Chinese market the latter is for Chinese Polity.

Being a autocratic government, Den allocated resources and labour with incredible efficiency which can never happen that fast in India as we a democracy thus we first need develop a consensus then only we can reform.It may sound as criticism as the process looks slow but in the long run we value democracy more thus it is only a small price to pay.

Chinese government directed a top down culture which is endured by masses due to influence of Confucianism which accorded compliance and loyalty to state by masses for a larger cause.

Xiaoping built economy on low cost exports products which attracted FDI  due to availability of Cheap Labour.

Rapid industrialisation and city building happened under Deng. India opened up its economy 13 years late — in 1991 — and by that time China was already ahead in GDP. Even more, China’s strengths in social infrastructure was giving it the tail winds.

WHERE DID INDIA GO WRONG

Although upto 1980's , the level of economy was same but after that China only rose higher and higher and India only lagged behind and with time the difference rose to humongous levels.

1. China capitalised its economy before India and due to this reason China attracted the foreign direct investment more than India.
2. India is democratic nation so we phased political instability many times and due to this reason national interest got subducted under the political instability whereas china have communist party system its means continuity of policy or sustainability of the government policies would be more than the india.
3. Post-1978 China saw average real growth of more than 9 percent a year with fewer and less painful ups and downs. In several peak years, the economy grew more than 13 percent whereas India growth rate was always in the range of 4-6 % over these years.
4. China is an export oriented country and given the above reasons the imports are low but exports are high. In most of the countries Chinese dump their goods and the importing countries has to fight with raising their customs duties, countervailing duty etc but still they are able to dump because of cheap labour available with them. But India is an import oriented country which means the imports are higher than our exports and hence trade deficit is high.
5. Infrastructure is the backbone of economic development. China realised this quite early and made way more investments. But India realised it late.
6. China being a one party system never faced a political crisis, leaders one after another continued reforms since 1980. The policies were imposed without any resistance or opposition. Same governing model continued over the years with limited modification. India, on the other hand had a weak government from 1977 to 1980 and 1996 to 1998.

There are many other reasons as well but these were few most prominent causes which helped China become a Giant.