India starts to pull itself out of China's shadow

Fast-growing nation aims to 'twist the dragon's tail'

Last updated July 5, 2007 8:44 p.m. PT

By MARCUS GEE
THE (TORONTO) GLOBE AND MAIL

NEW DELHI, India -- After more than two decades of eating China's dust, India is starting to pull closer to its sprinting neighbor.

India's economic growth touched 9.2 percent last year, just short of China's 10.4 percent. This year things are going even better. With one estimate putting growth at a seasonally adjusted 11.4 percent in the first quarter, India might even overtake China to become the world's fastest-growing economy in 2007.

The competition between the two Asian giants -- both ancient civilizations, each with more than 1 billion people -- is the great race of the early 21st century, and Indians are watching it with excitement and fierce pride.

Newspapers are full of headlines proclaiming that India will outdo China's success story and "twist the dragon's tail" and that India's booming information technology sector is "15 times bigger than China."

There is nail-biting, too, as if Indians can't quite believe their recent good fortune will last. "India to slip behind China in innovation," worried a recent headline in the Times of India.

For years, India had to stand by as the world applauded China. India's economy grew by an average of 6 percent a year between 1980 and 2002, a healthy rate by global standards but well short of China's full-tilt 9.5 percent. Now that India is gaining ground, Indians are almost obsessive about comparing their performance with China's. "It's our national pastime," said Rukmini Bhaya Nair, who teaches at the Indian Institute of Technology in Delhi.

Like spectators at a cricket match, Indians are quick to rattle off the stats of their home team.

China may have a bigger population -- 1.3 billion to India's 1.1 billion -- but India's is growing faster, at 1.6 percent a year compared with China's 0.6 percent.

China may have more export factories and bigger foreign exchange reserves, but India has more billionaires -- 36, according to Forbes magazine's recent listing of the world's superrich, the most of any Asian country.

"In the 60th year of our independence, the rise of the Indian business community on the global arena must be counted as one of India's proud achievements," the Indian Express said in a recent editorial.

Relations between India and China have improved enormously since 1962, when they fought a border war, but the rivalry is still strong. When Prime Minister Manmohan Singh called China India's "greatest neighbor" this month, a poll showed that more than 60 percent of Indians thought he had been too effusive.

Talk to people on the streets of New Delhi, and they will tell you that India, not China, holds the key to the future.

Even at the China Market, the New Delhi equivalent of a dollar store, owner Mohammed Ali, 32, says Indian goods are better than the cheap Chinese toys, clocks, calculators and assorted gadgets he sells.

"Chinese quality is lousy," he says. "If it stops working, you just throw it out. It's Indian quality that will put us ahead."

"I think for a lot of people, China is a benchmark," said Brij Tankha, a professor in Asian studies at Delhi University. "India is coming into its own and we want to catch up."

If so, there is still a long way to go. India's gross domestic product stood at $915 billion last year, a third of China's. Per capita GDP was $840, compared with China's $2,069. More than 100 million Chinese worked in its teeming manufacturing sector as of 2005, while India's employs just 7 million.

Basic living standards are much lower in India, too. In China, 90 percent of adults can read and write, in India just 61 per cent. The average Chinese can expect to live 72 years, the average Indian 63.

Any visitor to both countries can't fail to notice the gap right away. In India, "our cabs are shabby and the airport bathrooms are dirty," Nair said. In China, with its gleaming new airports and well-maintained highways, "your first impression is how impressive it is. You have an impression of prosperity you don't have in India."

The economic reforms that launched India's current boom began only in 1991, 13 years after the historic economic opening proclaimed by Chinese leader Deng Xiaoping. As a result, economic analyst Bibek Debroy said, India is 20 to 25 years behind China in economic terms.

"I think this says it all: China is hosting the Olympic Games, we're hosting the Commonwealth Games," Debroy said. "We're not really in the same league."

COMPETING GIANTS

INDIA

# Population: 1.1 billion

# Population growth rate: 1.6 percent

# Economic growth: 9.2 percent in 2006

# Per capita gross domestic product: $840 in 2006

# Adult literacy rate: 61 percent

# Average life expectancy: 63 years

CHINA

# Population: 1.3 billion

# Population growth rate: 0.6 percent

# Economic growth: 10.4 percent in 2006

# Per capita gross domestic product: $2,069 in 2006

# Adult literacy rate: 90 percent

# Average life expectancy: 72 years