India's Growth Model: China or America?

In the previous post, we discussed about whether India and China were ever equal. Now we will go further and discuss the right model for comparison: United States of America.

As the analysts are finding the last couple of years, India and United States are much more common than what most people think (did I just say that the world's poorest & richest country have some commonality). Superficially, India's english, democratic tradition & British colonial legacy are visible. But, we have just got started. There are much more deeper. We will randomly see them and then put them in place.

1. Hollywood Vs. Bollywood - You must be thinking that I'm just kidding, as movies are not a factor for world economy. It is. At one point, not long ago, Russia overtook US as a super power and Japan overtook US as an economic power. But, how many kids dreamed of Russia & Japan, tried to imitate their culture, flock to their universities or even learn traces of Russian & Japanese? But they did all that to US, because of a very powerful influence - Hollywood. It shaped the world cinema, and gave a way for imagination and thought. In all that imagination and dream world, only America was there and its perspective on the rest of the world. Interestingly, whereever they lived most kids saw world from the prism of United States. Thus, US got the best of world relationships, best of students & scientists & entrepreneurs and easily outsmarted its competitors. I'm not saying that Hollywood was solely responsible for America's growth, but without hollywood, a lot of American succcesses would have never happened. For a long time, US benefited from the export of Hollywoodism, McDonaldism & CocaColaism. Culture shapes billions of bucks and US companies & brands (from Ford, GE to Pepsi, Coca-Cola to Microsoft) became a marque for the world.

Coming to India: India's long lasting legacy in Asia it is its export of culture. Everwhere from Thailand, Malaysia to China, Japan, Middle East, coastal Africa... you could see great influence of indian culture. Thus, even without magnificent war & army India had conquered a huge territory, just by being a powerful holder of cultural exports. People from Columbus, Vasco Da Gama to English sailors to Chinese buddists flocked to India and dreamed on a trade with India. In a way, it is similiar to American export of culture, only a good form of culture :). And as Bollywood emerges, people from as far as Africa to East Asia will see world from an Indian prism and will bring both development and international relationships with that, and Indian companies will get the visibility and brand promotion it requires. Probably we might even convince Pakistan and China to have better friendhship with India.

This is also extendible to other media. Washington Post, Time magazine & CNN has so much effect on world media. Now India has many of the strengths and can take a part of the strength just how US took from UK (with BBC, Times etc.).

2. Enthusiasm & Entrepreneurism: If a Rip Van Winkle from 19th century America suddenly woke up in current India, he could find the comfort of home in it. 19th Century America didnt have infrastructure, had shabby roads and dusty towns, quarelling federal government, but its people had an unique power: An optimism for the future, a sense of pride and vision & an overbearing urge to succeed. They quickly moved from the heterogeneous group of colonies to bring powerful economic houses that dreamed of growing big and conquering the world. This fiery capitalism and energetic entrepreneuship is what we see in India - from slums to high raises. We are poor in infrastructure and shabby in our cities, and our heterogeneous is quarallesome, but our energetic young men & women are going to overcome all of that with the same sense of purpose our godfathers (19th century Americans) had.

3. Stress on Unity in Diversity: America has a great power, it quickly assimilates its immigrants much faster than any other country. The irish, jews, Italians, Germans who came during the last 100 years are now fully integrated as Americans. Though, there is great diversity in terms of immigrants (we have huge African-Americans, Hispanic-Americans, Asian-Americans and of course European Americans) representing every continent in the world. But, they all are almost united on a concept: American (albeit diversity and fractionsim are growing).
Historically, only one other country had such a track record: India. It had such a power that whoever came to the land became Indians (or Hindus). We definitely have an exceptions like Islamics who will never be assimiliated anywhere. The Greeks, Afgans, Aryans, East Asians, Mongols, Arabs are all fully assimilated and the art & culture as an example for it. Thus, it has such a diversity (in language, religion, art forms) but a soft thread runs among all, conscious or sub-conscious. A sense of Indianism. A lot of Indians will oppose when I say it, till they feel their subconscious emotion of it at different times.

India and China: Were they ever equal?

The predominant comparison discussed everywhere in the world of economics and politics is India & China. People bring all sort of things to table how these are similiar and how India is the lame dog compared to Chinese tiger, etc. They also point out that India and China grew from similiar position. This blog has two threads: Were Indian and China from equal backgrounds and whether China is a model for India.

First, irrespective of what a lot of people think, India and China didnt start equals 30 years ago.
China was protected by Pacific Ocean to the east, Siberia to the north, Tibet to the south and Central Asia to the west and had no trouble of invaders except mongols. India was instead invaded by everyone from Greeks, Afgans, Persians, Huns to Arabs & Europeans. While China never was a full-fledged colony of anybody, India had 8 centuries of occupation when it entered 20th century. While China became a permanent member of UN security council and a recognized nuclear power, India was a pariah of World's elite clubs 30 years ago.

China was also a leader in manufacturing and innovation since eternity and was way ahead of India in the ancient history, from producing silk & tea to umberalla, gas pipes, etc. Indians were leaders in finance, religion, trade, arts (dance, painting, architecture, literature), Mathematics, etc. A perfect service sector. The comparative differences in the religion from a materialistic & pragmatic Chinese Confusianism to abstract & colorful Hinduism, are also point of interest here.

Chinese leadership also approached more pragmatically (however worse they were, they focused on fundamentals) and built its agricultural sector, rural health, roadways as major priorities even at an early age, while India is yet to reform the fundamentals even now. Dictatorship also helped them to get around with their reforms.

Thus, China and India were never similiar anypoint in their 5000 year history. Now to the second question: Is China a Model for India?

As they were never similiar and have different strengths & potentials simple comparisons dont do any justice. Just because India doesnt have a few things compared to China, doesnt make it worse. After all, just because the Tiger doesnt have fins, doesnt make it inferior compared to Fish. While it is definitely advantageous to learn from successful neighbors it is also better to keep originality as the tiger can and need never become a fish. The problem is especially found in investors, who just blindly compare return ratios (P/E) for India and Chinese stock exchanges and just say that China is more attractive. They just dont realize that Chinese exchange is heavily weighed by banking stocks, in which China doesnt have healthy position, and manufacturing that cannot have a higher P/E compared to India's Telecom & IT stocks. Just an example to show, how blind the comparisons are.

The next article focuses on a better model and comparison for India: America !!!

Also See: http://balajiviswanathan.blogspot.com/2006/02/india-and-china-different-viewpoint.html

Tank Man

One of the most incredible personalities in the recent history is this tank man of China. During the Tianenmen square protests, where Chinese students wanted democracy and gathered at the historic tianenmen square, in Beijing, they witnessed such a blood and horror that charecterized our era. The Chinese government used tanks and heavy armoury to break the protest of innocent, weaponless students. But, one man chose to defy them. He stood valiantly against all the tanks and its stunning to look at that picture and the video, where a human 'warrior' stands brave against dozen armoured tanks. See this video.

If someone needs courage, then you need to see this. I'm always impressed with such people who can terrorize 'fear'. They are real humans, who stand courageous for a just cause. Unfortunately, we have become a society of dumb people, who are willing to compromize values, who are willing to be voiceless before injustice, who are villing to be cowards before fear and who become the main source of the evilness of the society.

"Evil can proceed only when the good become silent"

India and China - A different viewpoint

For the world economists, the biggest question before them is "Can India match China" and there are arguments and counter-arguments put forth for each of the sides. Both nations have lots of similarities, yet they are strikingly different. Thus, the comparison is very interesting and presents two entirely different spectrum of choices.

India and China developed parallely and their histories trace to the early bronze age civilizations. Since, then both nations had cultures, civilizations and philosophies spawning from them. Interestingly, though these two countries were neighbours, there were very little cultural exchange between them. The biggest reason for that being the Himalayas. China was guarded on all sides by hostile terrain. Mammoth Pacific ocean to the east, daunting central asia to the west, roof of the world to the south and freezing Siberia in the north cradled a civilization and thus is responsible for a very different Chinese culture.

India on the other hand was a land being continuously invaded by raiders from west. Its ancient Indus valley civilization was probably replaced by the Central Asian Aryans and countries like Greece, Iran had lots of cultural interchanges with it and was followed by 800 year Muslim occupation and 300 year European colonization. Thus, while China developed in isolation, India developed in variety. This is probably the reason why, China wants to be One China, whereas India wants to have Unity in Diversity. Probably, this is one of the reasons why Communist dictatorship still survives in China while India clings on to a noisy, but stable democracy.

From ancient times, Indians were predominantly interested in abstract thoughts, while Chinese were focused on concrete, worldly thoughts. India led the world in Mathematics, Fine Arts, Religion and Philosophy, while China invented everything from umbrella to seismograph. While China built the imposing Great Wall of China, Indians were more interested in building artistic rock temples and majestic cave paintings. All the Chinese temples, Palaces and other religious centers appear to be constructed with the same typical architecture, while no two Indian building appears the same. India has atleast a dozen different prominent architectural elements inherited from Kushanas, Mauryas, Cholas, Orissa rulers, Hoyasalas etc. While the Chinese religions of Confusiansim and Taoism spoke mostly of worldly principles, India's religions like Hinduism, Buddism and Jainism focused on mystic aspects and abstract and loft philosophy. Chinese imported a lot of Indian religious concepts, like Buddism and learnt Karathe from the Indian found- Shoalin school of martial artis. While Chinese were busy manufacturing, Indians were busy thinking. Thus, China leads the today's world in Manufacturing, while India is good at services.

The strengths of these two nations are different. China is good in Unity. India is good in diversity. China could single-handedly build enormous number of bridges, roadways, and airports, while India lags behind a lot in infrastructure. However, India's soft elements are good, with a fine banking structure, respect for property rights and most importantly a stable democracy.