India today doesn’t look quite like the economic dynamo that, just a few years ago, some predicted would overtake China as emerging-markets champion.
But the race looks a lot closer if you account for one key fact: China got a 13-year head start on India in opening its economy and giving companies greater freedom to invest and produce. In exports, capital spending and foreign investment, India today is remarkably similar to China circa 2001.
That should both console and concern India as it gets back on its feet after three years of weak growth and high inflation. Console, since it suggests the country’s economy could remain on a China-like trajectory for years to come. But concern, because India’s delay could mean that the country has missed out on some big advantages that catalyzed China’s boom.
The latter point is especially worth considering given how assiduously India’s recently elected prime minister, Narendra Modi, is working to follow the blueprint for China’s export- and investment-driven success.
When Chinese President Xi Jinping visits the Indian capital this week he will encounter a recipe for economic revival that ought to look very familiar. Delhi is aiming to boost exports and raise India’s share in world trade by 50% over the next five years. “Sell anywhere,” Mr. Modi said in an Independence Day exhortation to global business last month. “But manufacture here.”
via India’s Economy Looks a Lot Like China’s — In 2001 – India Real Time – WSJ.
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