Chinese Economy – how superior is it to that of India’s?

While Chinese economy is enormous and growing at a rapid pace, it is vulnerable to the smell of democracy and freedom. The moment true freedom comes into the country the GDP can literally reduce by 70%. For example, the official unemployment rate in China is 10%, however, actual unemployment that includes massive rural unemployment and underemployment probably exceeds 20%. The chine Government infrastructure is three times more inefficient that that of India’s. However, India’s public sector inefficiencies are open for public scrutiny while China’s is hidden under the rug. The biggest problem for Chinese economy is lack of English speaking population. While 350 million Chinese are learning English, from experience in US, it can be safely said that Chinese population will take no less than 100 years before they can master the level of proficiency India has. In China English is not an accepted language. Biggest problem for China is that it has been converted into an manufacturing assembly economy. Cheap non-intellectual and non-English speaking labor force is used to manufacture goods based on American, Japanese and European design. These goods are then exported to other countries. In addition, these goods also serve the domestic economy. We predict that in next ten years Chinese economy will face a major crisis. The cheap Chinese labor will be replaced in Japan, US and Europe with productivity tool – Robots, Automation and Software. China will be a net importer of goods and unemployment in China will sky-rocket. India’s biggest problem is China and Pakistan. If India can avoid a war in the next ten years, it can become a larger economy than China. Automation and robots cannot replace the outsourcing work that India is gaining. These contracts require English capable intellectual population. The moment China gains democracy, there will be a rush to leave the country from the intellectuals and educated. This will cause further problems. India’s another problem is incapable entrepreneurs who try to make quick money with traditional trading mentality. China does not have any true entrepreneur – they have a long way to go. Just like Russia when finally communism disappears, China will be in a major chaos with negative GDP growth for at least five to seven years. India needs to learn from the West the power of small business. While in the agricultural sector, Indian entrepreneurs are really capable, in industrial sector they are equally incapable. That is why India has largest number of software engineers but practically no software that it exports to the developed nations. So where does these all lead us to? India is in a better shape on the long run- if it can keep its track on the ground. China looks great now – but it’s a mirage – things behind the scenes are scary and bad. Chinese economy will eventually learn the fact of freedom and its miraculous effect. If you want to know how that effect is, go to an entrepreneur in West Bengal in India and ask him/her how difficult was it do business with the communists. You can expect the same answer from those in China if only they can speak freely!

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