India or China : which one is destined to rule the 21st century

Clearly, China's post-Mao transformation is the story of post-war economic history. The nation's economy has grown more than 7 percent annually for the last couple of decades. China's emergence as a manufacturer of high-tech goods is equally impressive with a roster of companies featuring the likes of Lenovo, Baidu.com and Huawei Technologies. But China's hyper-growth has disguised several increasingly pronounced blemishes.

"The multitudes of people, the size of their building projects, and the sheer audacity of their vision to transform this country into a mega-powerhouse,". "What do you do with an infrastructure that is developing so rapidly, that there are more than 160 cities with populations over 1 million each and no fewer than 10 cities with populations over 10 million?"
Talk about an understatement. That mind-numbing question is as big as all of China.
Almost 15 million people in China each year move from the countryside to the cities. With so vast a population in transition, the absence of a safety net carries with it the ever-present potential for social unrest.

So far, things have worked out. After Deng Xiaoping came to power following Mao's death in 1976, the government made a covenant with the rising entrepreneurial class. To put it simply, it went like this: "We'll let you get rich, but leave the politics to us." Of course, the state has had to deal with occasional turbulence, such as the rebellion at Tiananmen or the northwestern province of Xinjiang.

But these rate as momentary detours on an otherwise unimpeded march toward superpower status. Meanwhile, India has had its own issues. The state doesn't invest enough in vital infrastructure while it spends too much money subsidizing agriculture.

"China's invested more in infrastructure than India, which is in a big catch-up situation," said Michael Spence of Stanford University, who won the Nobel Prize for Economics in 2001. "If they don't do that, they won't grow at the rates being projected."

For all the mess that is India, it's still one heck of a productive mess. In its latest five-year plan, the country forecast average growth accelerating from 9 percent to more than 10 percent. That's a breathtaking climb. And consider the following: In 2002, the country's annual GDP growth was lower than that of China, Vietnam, Sudan, Tanzania, Uganda and Bangladesh. Within a year, India had closed to No. 2 behind China, largely on the strength of its emerging IT and business process outsourcing sectors.

India also reaps benefits from an excellent educational system that's generated thousands of graduates who work for overseas American corporations.

Above all, India's political power doesn't emanate from the barrel of a gun. On Tuesday, the U.S. statement included China with the likes of Iran, Zimbabwe, Cuba, North Korea and Myanmar as a country where human rights protections routinely get violated. Compare that with India.
The system may sometimes be raucous and inefficient, but it remains the world's largest functioning democracy. That counts for a lot and helps feed into a touchy-feely attribute that can't be measured like a dry economic input.

Spence summed it up this way: It has a lot to do with a sense of optimism and momentum, a feeling that today will be better than yesterday and tomorrow will be better than today. It's a very American way to explain India's phenomenal growth, but I think it helps fill in some of the gaps. In China, you can dream of being rich, but it then behooves you to keep your opinions to yourself. The average Indian can also dream about making her fortune--and then figure out how to apply those lessons to building a better society.

What could be more Indian? What could be more American?