There are many facets of war. War does not always include tanks and soldiers. Sometimes a war happens between two countries in terms of development. Countries try to use their resources optimally, incorporate newest technologies and educate its citizens in order to help the development move forward in a quick pace. The more a country is developed, the more it can dominate in world politics. More importantly, a developed country can take care of its citizens in a proper way. Citizens - the human resource - are the most valuable resource of any country. Happy citizens means no internal conflict and good work culture.
So, in short, what is development ? Development is the process by which a country improves its social, economic and political conditions. This improvement is necessary to help the country progress, keep its citizens happy and fend off external forces and natural disasters. The development must be inclusive. All the sections of the society must be touched by the development. In this paper, the author has tried to figure if India can cross China as far as development is concerned. Both the countries became independent almost at the same time - 1947 for India and 1949 for China. Yet, China is now one of the most developed countries in the world. India has progressed much post independence but it has not reached the same level as China.
What Does Development Look Like In China -
In order to find out if India’s development can surpass that of China, it is necessary to understand what Chinese development actually looks like. The development that blessed China can be divided into three groups to understand it easily - Social, economic and political.
Social & Economic Development In China -
It is necessary to discuss both the social and economic development in China because these two are intrinsically connected. Without economic development, a society cannot progress and people cannot live happily.
Although China is a communist country, it opened up its market in 1978 ( Open Door Policy) and from then on the economic development in China have sky-rocketed. Today China ranks second as far as GDP is concerned. Since its opening up, China has been growing at an average of 10% per annum. With so many factories in China, the manufacturing industry is one of the main reasons behind China’s phenomenal economic growth. Cheap labour, abundance of key raw materials, push by the political leaders and a solid network of business connections have made China the ‘Factory of The World.’ China is also seeing huge success when it comes to setting up its own businesses. Alibaba is one of the most successful companies in the world - comparable only to Amazon. Huawei is a Chinese smartphone maker that is giving tough competition to other brands.
Millions of Chinese citizens have benefited from the widespread economic development. As ChinaPower has pointed out, before the economic development gained momentum, the middle class in China was only 4% of the population (2002). After ten years of economic development, this figure increased to 31%. With high speed internet and a myriad of technological tools, the Chinese live a comfortable life. The employment rate in China is a whopping 65.2% according to 2019 statistics. As far as healthcare is concerned, 95% of Chinese have some form of health insurance. The Chinese government is doing a nice job by trying to provide basic universal and affordable healthcare that can benefit the poor and the rural population.
Political Development -
The political development in China is interesting. On one hand, it actively worked towards improving agriculture and bringing about sweeping educational reforms and on the other, it also tried to stifle antagonistic public sentiments. The Communist Party of China has done commendable work to improve the economic situation in the country. However, the Chinese people enjoyed exceptional political leadership at the cost of freedom.
Can India Rise To The Level Of China -
As already said that both India and China got independence just two years apart. Despite this, China is more developed than India. While China opened its door to foreign players in 1978, India got too late. It opened its doors in 1991. This is perhaps one of the most important reasons why India is lagging behind. Additionally, wars, natural disasters, poverty, political turmoil and religious differences obstructed India’s progress.
Things are changing. The India of today is now different from the India of yesteryears. Perhaps we are asking the question in a wrong way. China is developed because of the abundance of raw materials and because of the focus in manufacturing. If India wants to rise above China, it needs to identify the areas where it can practically beat China. India cannot beat China in the technological sector as of now because of the lack of raw materials. However, India can actually beat China in the agriculture sector, software engineering sector, clothing sector, education sector and many other sectors.
The author of this article will try to find out what went wrong in case of India. This will give an idea if India can beat China in the coming years.
How The Make In India Slogan Turned To Assemble In India -
When the new Prime Minister of India - Mr Narendra Modi launched the Make In India campaign in 2014, the people of India were elated. They thought that India could become a manufacturing hub just like China. However, the Chinese telecom giants hijacked the Make In India campaign. The number of handset imports fell after 2014. However, the number of telecom parts imports increased at the same pace. This shows that the Chinese companies worked around this Make In India campaign and just opened assembly hubs in India. This is a great concern for India as the citizens are living in a false hope that India is working just like China.
The problem with competing with China in the smartphone sector is flawed. In order for India to become a true manufacturing hub, it needs to invest a huge amount of money on Litho-Machines - the chip making machines. There is not a single company in India that produce chips from scratch. First,India needs to have an ecosystem built around this Chip making process. Only then can it dream of surpassing China as far as technology is concerned.
Brain Drain -
Jack Ma and Sundar Pichai - both are exceptional software engineers. However, Jack Ma works for his own Chinese company while Sundar Pichai works for Google - an American company. There are thousands of talented software engineers who leave India to work for foreign companies. This brain-drain is hurting India’s development.
Disparity In Literacy -
In order for a country to progress, it has to depend on its most important resource - its human resource. Well-educated people have the ability to pull the country out of the muck of instability. In India, the literacy rate is 74%, while that figure in China is 96%. Naturally, China is more developed than India. India needs to educate its citizens in a much more organised way if it wants to rise above China.
Too Much Conflicts -
Unfortunately for India, after its independence, it has to see too many conflicts. The Indo-China war, the Kargil war, the 1971 war and countless religious and regional conflicts have strained the economy of India and prevented its citizens to focus on productive things. India needs to work unitedly if it wants to beat China.
Red Tapism -
China is business friendly. The Chinese government provided benefits, funding, and land to the businesses there. The labour laws are kept diluted intentionally. In India, if a company wants to start a business, it has to go through so many formalities and it even has to give bribes for faster work. India ranks 63rd in the Ease of Doing Business Index, while China ranks 31st. Until recently the startups in India had to bear the brunt of a draconian tax - Angel tax.
Weak Economic Growth -
India’s GDP has come down year on year. The 7% GDP rate in 2013-14 fell down to 4% in 2019. Furthermore with non performing assets and low private investments, India’s banking sector is reeling under crisis. The situation is so bad that the smaller banks had to be merged with larger banks in order to save them and recover people’s money. The IMF is concerned about India’s poor growth. With flawed implementation of demonetisation and GST, India’s economic condition is worrisome to say the least.
Bad News In The Agriculture Sector -
China used agricultural reforms so that agriculture can bolster the economy. India is not able to do that. With a huge population and low production because of outdated agricultural tools, India is one of the countries with lowest per capita and per hectare production.
Is India Trying To Resolve The Issues ?
The government is trying hard to resolve the issues that are obstructing the growth of India. The Indian government is trying hard to improve the agriculture sector. The February 2020 budget has called for liberalisation in agriculture. The government is trying to make the farmers’ income double by 2022.
The startups are doing a good job in India. These startups are helping to create more jobs. They are positively affecting the GDP of India. For example, Jio Infocomm is able to secure lucrative deals from companies like Facebook. These deals, fundings and revenues are driving India to the growth path. The Indian government has noticed the contribution of Indian startups and have announced a slew of measures to help augment their growth. The corporate tax has been reduced, the dividend distribution tax has been abolished. The government has promised the startups that they will find it easy to do business in India. The Angel tax has been removed. The government is going out of its way to provide all kinds of assistance to the startups.
The education sector has seen many significant improvements. The edtech industry is getting much needed push from the government.
India needs to start small. Today, even the Diwali crackers and Holi colurs are getting imported from China. This can easily be made in India.
Is Socio-Economic Development Everything ?
True China is more developed than India. However, when it comes to spiritual development, India is winning. The ancient culture is still alive and kicking. No culture was able to hijack the Indian culture. India has not invaded any country. It is vocal against wars.
Indians enjoy more freedom than Chinese. They can criticise their governments without any fear. This political freedom is alien to the Chinese system.
Bottom Line -
India has the ability to go ahead of China. But it cannot do that anytime soon. The Indian government has just started taking some solid steps in making India self sufficient with independent manufacturing units, healthy agriculture, big companies and a well-educated workforce. It will take time for India to beat China as far as development is concerned. India must remember - slow but steady wins the race.