The article The Dragon and the Elephant compares the economy of China and India respectively. India gained independence in the year 1947 and at that time, the country became the world’s biggest democratic state (Zhongying, 2007). The country had a difficult time with the economy and it been not until the time of macro economy crisis that was in the year 1991 is when it gained a full economic boom. From that period of 1991, various policies and economic reforms have been successfully done in India although the economic growth has been taking place at a slow pace (Zhongying, 2007). The weak economic growth has made the country to fall behind its neighbor China with regards to economic indicators. The statistics in the World Bank indicates that the average annual GDP of India in the period 2004 to 2012 was approximately 7.6% and at the same period the GDP of China was high at 10.5%. The statistics support the point of the difference in the two economies (Zhongying, 2007). The Chinese economy, on the other hand, is the reverse of India’s scenario.
In the year 1949, Mao Zedong had his first victory as the flag bearer of the CCP party; China became a centrally run and stable state. Up to this date, China is headed under the same system, and the economy of this country has flourished under the system. The Chinese market was a closed system and centrally placed and it was not until 1978 when everything changed under the rule of Deng Xiaoping as the nation opened the economy and the economic status started to appreciate (Zhongying, 2007). The reforms in China happened earlier than in India, and the performance index was seen as exemplary (Bloom et al., 2006, p. 5). The economic growth of China has been miraculously attained by the lessening of some party organ control. Many statistics support the sentiments like, for instance, in the year 2010, the economy of China was approximately 47 times greater than in the year 1980 (Ford, 2011, p. 2).
Comparison of the dragon and the elephant emergence contrast the two political systems. In the previous section, it is noted that the government in India is attained in a democratic manner while the Chinese system of government is under one party system. Although the type of democracy in India is common in the West, the system is a primary contributor to the slow economic growth of India in contrast to China. According to Zhongying (2007), the India’s system of government is seen as an almost anarchic and pathetic management that quickly implements new policies in cases when the bureaucratic problems are a non-issue. The sentence depicts that when the people high in authority want something done, the issue is quickly handled but with regards to policy reforms, the nation lags behind with their implementation. The actions are reverse in the Chinese government (Zhongying, 2007). China is under an authoritarian and single-party system where a nay plan of action as time moves without the need for voting. China already knows the future rulers as opposed to India, who vote in their leaders and the Chinese leader work to achieve the great purpose of the citizens. China as a nation has attained a significantly high level of production compared to India. The high production is due to efficient organizational structure brought by workers shifting from low-production to high agricultural productivity. After the beginning of the reforms in China around the year 1970, approximately one fifth of the Chinese population left their land for production purposes. The production has significantly increased hence the active utilization of capital. In 1990, the IMF noted that the productivity benefits contributed a lot for the country more than any investment in China (Bardhan, 2006).
The Chinese education level, though exaggerated plays a significant role in the economic achievement. The technological skill and other unique skills have scaled the economy of China. There was a literacy campaign in the year 1950s that has now substantially paid well. In the year 1970s, China registered an adult literacy level of 66% in contrast to 36% in India. The educational attainment sums it all regarding economic development. The education was later reinforced by the Compulsory Education Act of 1986 which stated that at the age of six, a minor should get nine years of compulsory schooling. The aged education has been raised through the mass media like radio, television, and part-time learning in higher institutions.
Recently China’s economic growth is attributed to various changes in the economy. As at 2014, the economy was strong at 7.5%. The shift of investment from “mining” to “dining” is one change that can see the economy of China move to the great level. For the past years, there has been a massive building of physical foundation in China that has become prosperous owing to the availability of natural reserves. The value of the deals in mining dropped significantly in the year 2009. Since the year 2013, the nation’s strategic M&A changed as the state reeled in excess lending that was diverted to satisfy the wealthy class. The acquisition of the “dining” class increased as the number of the affluent citizen soared. The shift in capital flow that is two-way rather than one-way is seen as a trend that will make China grow economically. It was noted initially that most investments like the real estate were confined to China, but recently, investors in the property have moved internationally like in the US. The move will ensure continuity in capital investment. The consumer leverage is also shifting at a steadfast pace. Purchasing a car in China is still done through cash transaction to some extent (Bloom et al., 2006). Things are changing fast as the financial sectors and the business owners are changing the rules as they encourage the use of car loans to buy a vehicle. The factors are making China grow economically, and it will be difficult for a nation like India to catch up with China.
- Bardhan, P. (2006). ‘Awakening Giants, Feet of Clay: A Comparative Assessment of the Rise of China and India’, Journal of South Asian Development, 1(1), pp. 1-17.
- Bloom, D., Canning D., Hu L., Liu Y., Mahal A., Yip W., (2006). ‘Why Has China’s Economy Taken Off Faster than India’s?’, Harvard School of Public Health, (2), pp. 1-39.
- Ford, B. (2011). China vs. India: Differences, similarities, and prospects, Singapore: Australian Government.
- Zhongying, P. (2007). The Dragon and the Elephant. National Interest, 89, 47(1). 1-3.