Can India become The new China?

India has a number of embedded structural deficiencies, including a massively underdeveloped industrial basis, high growth rates leading to high NPA’s, an acute lack of the types of capital required for high growth rates and an assortment of governmental issues means that its unlikely that India will be able to pull it off. India will have to find a way to compete w/ Vietnam and Indonesia or the Philippines, which is a heck of a lot easier said than done. In fact, both those countries are outperforming India relative to their populations by quite a large margin. So India is not showing much promise to become the next China . Welcome to The Atlantis Report . I just realized that in the next few years or so, India will become the most populous country on Earth, and this will go down in History as the first time In the last 4,000 years that any country has a bigger population than China. The world’s attention will gradually shift to India after China’s Belt and Road Initiative run its full course for the next 50–100 years. So can India take over the baton if it wants to become the next global engine of growth after China. As a reference, the United States took around 70 years(after American civil war) to overtake Britain in GDP and became the key driver of global economic growth , while China took around 70 years(after Chinese civil war) as well to overtake the US in GDP (PPP) and became key driver of global economic growth. The United States did not become the world’s top economy by chance, but by working closely with many countries including Britain and Europe despite many disagreements and geopolitical issues with them. China also worked its way to the world’s top economy(PPP) by cooperating with the United States, Japan and ASEAN in the finance, commercial and economical areas despite many geopolitical issues Between them. India can grow and realistically may be able to sustain the 7–8% even for 1 or 2 decades assuming the governments do their job. But China had a core strength that India does not. China had the will and ability to enforce (be it land reforms, be it crack down on corruption which some feel has been take too far). More importantly they had single Party whose only agenda was to bring the country back to its Middle Kingdom days of glory. So everything in China is top down whether you like it or not and whether it is good or bad. So China could effectively lift almost 700 million of its citizens out of poverty to greater standards of living when India did around 200–225 million may be. India on the other hand has a democratic set which is bottom up. To make a reform and match up to what China was for the last 30 years means taking power away from the individual states and having central government enforce it. This would be undemocratic and cannot be done. So even if India's PM has a vision and wants to take India to its glory, he has the hurdle of states, not having majority in upper house to pass bills, a vast majority of political parties and open media consensus and criticism to handle among others. For these reasons and many more India will always be second to China. But will take on if China drops the ball. Realistically everyone talks about China growth rate slowing etc and India being the next China but even with slowing growth rate they probably would still do around 5–6% realistically. India on the other hand is realistically very diverse politically, regionally. Unless all elements in India Come together with common objective of making India great or being the next global manufacturing hub, this won't work. China of course has its own problems too. It is expected in the next year or so, 5 million people will be losing jobs in sunset industries and China also has aging population. So if one Chinese worker had to support a family of 4 + 2 elderly grandparents as sole wage earner and loses his job, it will lead to a disaster. Imagine compounding this million times. Now India has a great advantage here with young population. But the demographic of the population becomes useless if the economy is unable to create jobs for the young population. And that is contingent on India's ability to enforce the political, social and industrial reforms and doing so swiftly. Now whether China's autocratic set up is good for people or not is a different discussion all together. Let us not pat ourselves on the back on democracy as China has showed to the world how they do not have to be a democracy to be a super power. Democracy has its pros and cons and China's system clearly has its pros and cons. What matters is whether the people benefit from the system as democracy or autocracy is for the people. China though not 100% democratic, has shown the world what it can do with swift policy making and lift millions of the middle class out of poverty. in conclusion : While India will likely achieve decent growth rates in the short-mid term, it will not be able to sustain the growth rates required for a growth-miracle, largely due to waning export led industrialization, embedded structural deficiencies and the coming advent of automation. India will not become next China.







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