India or China

China and India have the largest populations in the world and will soon have the largest markets in the world. Each has advantages and each has disadvantages when you analyze them.

What would you think would give one the advantage over the other? The two paragraphs below are from the end of the article titled ‘India's surprising Economic Miracle’ that appeared in the September 30 issue of The Economist.

It is a fairly short article but one worth reading.

‘The Indian government recognises the need to tackle the infrastructure crisis, and is getting better at persuading private firms to stump up the capital. But the process is slow and infected with corruption. It is hard to measure these things, but many observers think China has done a better job than India of curbing corruption, with its usual brutal methods, such as shooting people.

Given the choice between doing business in China or India, most foreign investors would probably pick China. The market is bigger, the government easier to deal with, and if your supply chain for manufactured goods does not pass through China your shareholders will demand to know why. But as the global economy becomes more knowledge-intensive, India’s advantage will grow. That is something to ponder while stuck in the Delhi traffic.’