“Raj K. Gupta, a partner in one of India’s largest shoe manufacturers, makes a dreaded but necessary trip every two months to Hong Kong and then into Guangdong Province in southern China.
He goes to buy Chinese shoemaking machinery, because India has few producers of such machinery.”
New York Times (Free Registration required)
Read the whole thing. It is an eye opener.
A McKinsey study a couple of years back had recommended that freeing up product markets i.e. removing the reservation of products for the small scale industry is the thing that will cause the biggest impact on India’s GDP growth.
The article mentions that India is “obsessed” with its backwardness as compared to China. If only this was true.
Update:
On the other hand, there isthis article (free registration required) that claims that the Chinese miracle is basically a Potemkin village. Most of the statistics are fudged, corruption is widespread, the banking system has gone to seed, industries are growing less productive by the day and, central planning has meant a massive misallocation of resources. There isn’t much of a Chinese market because its low cost exports mean that the Chinese themselves are poor, without much buying power. Their cities look cleaner because the Chinese themselves are being kept out. The article predicts a collapse in a few years.
Hm… That makes me happy.. Not because I dislike or envy the Chinese, but believing that a Central Government can actually direct economic growth is to either believe in socialism or in miracles. – a difficult task for a capitalist and atheist.
On the third hand, China doing wrongly is not an excuse for India to do a different set of wrong things and then claim that we were on the right path when China collapses.