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"Battle of the giants
China is touted as the next economic and military superpower, but India may yet overtake it in the new global order, reports Hamish McDonald
At present, China is racing ahead. Its economy has averaged 8 per cent plus growth for more than a decade, and hit 9.1 per cent last year when per
capita income for its 1.3 billion people went over $US1000 ($1335) for the first time
Yet there are strengths in India that may make it more advanced than China later in the century. If you read the Nobel Prize-winning economist Amartya
Sen, it already is more advanced - if you assume individual freedom, rule of law and democracy are goals of development. But these freedoms will help
India move faster into the knowledge-based economy
Many foreign companies have been substantially Indianised, like ITC (ex-British American Tobacco) or Hindustan Lever, and Indian firms such as Tata,
Reliance, Infosys, Wipro, Ranbaxy and Dr Reddy's Laboratories are reaching into global markets - and investing in China. It is hard to think of more
than one or two Chinese corporate brands that register overseas.
India's big banks have emerged with bad debt ratios averaging 10 per cent, compared with the 22 per cent admitted by China's big four state banks
(and believed to be closer to 50 per cent). India's stockmarkets, opened under the British in the 19th century, have been thriving since the '80s
with millions of individual investors and a range of funds. China's stockmarkets are minor sources of business capital, mostly used to palm off dud
public sector enterprises to domestic savers who have few alternatives
Militarily, China is ahead in its ability to deliver nuclear weapons by missile. India's army is more skilled and better led. Its air force has
better training, equipment and doctrines. Its navy is building the kind of missile-destroyer China still has to import from Russia. Its electronic
intelligence capability is rated by the ANU expert Desmond Ball as far ahead, and unlikely to be overtaken because of China's authoritarian culture.
Its satellites are better.
Demographics may favour India's economy. Thanks to the one-child policy forced on the Han majority for near three decades, China has a rapidly ageing
population whose over-60 component will rise from 10 per cent now to 30 per cent by 2050, placing a huge demand on welfare. India, which has avoided
forced family planning except during Indira Gandhi's emergency rule in 1975-77, will have a much younger population for decades longer