I would also like to quote that another myth is that China’s rise was due tomajor investment in infrastructure, when economic liberalization andinstitutional reforms deserve more credit. Indeed, Yasheng Huang of MITnotes that single-minded development of infrastructure has its drawbacks,and China pursued this goal while giving less priority to education. India’seducational system, on the other hand, has steadily improved, especially inrural areas. For these and other reasons, he postulates, India couldoutperform China over the next 20 years - unless that is, the Chinese learnfrom their neighbor and rival.
i: My friend has very rightly pointed out that China has focused primarily on Infrastructure development but let me tell her that Why Chinagets 60 Billion Dollars as FDI whereas India is unable to get even 6 billiondollar is an Intriguing question. For China Congenial Business climatefactors comprising of making structural changes, Infrastrucal models,Developing SEZ strategically, providing economic freedom, opening up itseconomy and creating flexible labour laws has been one area where Chinahas created an edge over India.
: India has not lagged behind in any of the areas; we haveopened our economy quite late that is in 1990 and have grown phenomenallydue to our human capital, size of market, rate of grown of market and political stability. India is on the radar of global investors and has a lot of outsourcing and BPO services from US and EU.
i: On the other hand, China has grown 10 times faster in terms of FDI inflows and has grown three times faster economy as compared toIndia.
: Having a look at the latest data, we see that India appears tohave permanently broken out of its leisurely “Hindu rate of growth”– anannual gross domestic product increase of around 2 to 3 per cent – and its performance is beginning to approach the East Asian level. From April toJune 2005, India’s GDP grew at 8.1 per cent, compared with 7.6 per cent inthe same period the year before. More impressively, India is achieving thisresult with just half of China’s level of domestic investment in new factoriesand equipment, and only 10 per cent of China’s foreign direct investment.