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Unlike China, India will not become an economic superpower: Report

  • By Al Mayadeen English
  • Source: The Strategist
  • 2 Aug 2023 14:20
  • 1 Shares
4 Min Read

The ASPI report says that China's deep investment in its human capital helped place Chinese productivity far ahead of that of India despite starting at similar economies in the 1950s.

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  • Unlike China, India will not become an economic superpower: Report
    The national flags of India (right) and China are seen at the Delhi World Book Fair in 2016 (AFP)

The onset of the 1980s marked a crucial juncture in history, as China and India, two of the globe's most densely populated nations with nearly indistinguishable per capita incomes, embarked on the path of economic liberalization and embracing global trade.

These nations garnered anticipations of unprecedented "revolution" and awe-inspiring "miracles."

But the following years proved that the expectations regarding India's advancement were farfetched, The Australian Strategic Policy Institute said in a report on Wednesday.

Read more: US luring India with high tech weapons to further alienate Russia: WSJ

While China's rapid growth was built upon a robust foundation of human capital development, India somewhat neglected this crucial aspect in its growth trajectory. China successfully ascended to the status of an economic superpower; on the other hand, the predictions portraying India as the next in line seem to be predominantly driven by hype rather than substantive evidence.

The differences in the outcomes of the two countries have been a result of a long chain of pivotal events.

In 1981, the World Bank drew a sharp distinction between China and India. China boasted an "exceptionally high" life expectancy of 64 years, compared to India's 51 years. The report also highlighted that Chinese citizens had better nourishment compared to their Indian counterparts.

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Furthermore, China provided its citizens with near-universal healthcare access and higher rates of primary education, including for women.

According to the World Bank, China made great advancements toward gender equality during the Mao Zedong era, which has also been a decisive metric in understanding the current state of the two nations. 

This factor has contributed to increasing a skilled and well-educated workforce, reflecting China's emphasis on investing in human capital, prompting the World Bank to predict that the Asian country would achieve a "tremendous increase" in living standards "within a generation or so".

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Providing historical context to this success, Brown University economist Oded Galor explained earlier that the main pillars that marked sustained productivity growth since the dawn of the Industrial Revolution were associated with investments in human capital and higher female workforce participation.

The report said that while liberalization of markets was of great help to improve the countries' growth, China successfully resorted to building its strategy on the foundations of human capital and gender equality, unlike India which remained far behind.

Read more: China's trillion-dollar investment in the Middle East threatens US

An annual study conducted by the World Bank, which helps measure education and health standards in countries across the globe, revealed that China recorded scores similar to those of richer countries (per capita income), compared to those of India which fell below countries such as Nepal and Kenya.

The two economies were almost at par in the early 1950s and launched their modernization efforts within a very close period. But just 30 years later, China's productivity was more than 50 percent than that of India, while today it's nearly double.

Some 45 percent of Indian workers still operate in the highly unproductive agriculture sector, according to the report. China, on the other hand, managed to emerge as a global competitor in several fields (EV cars for example) relying on a well-developed workforce.

In the education sector, China broke into the world's top rankings universities. Seven Chinese universities are among the world's top 100, while two of which are among the top 20. Tsinghua University is considered the world's top institution for teaching computer science, while Peking is ranked ninth.

China is also recognized as one of the best countries to study mathematics, having nine of its universities among the world's top 50.

However, India has no university listed among the world's top 100, even its most prestigious one: Indian Institutes of Technology

This has helped Chinese scientists pioneer several scientific fields, including engineering, mathematics, and artificial intelligence.

China today stands strong at the frontiers of both the old and the new economies and has paved the way through its current model to achieve greater success, while India - despite assistance from its international partners - struggles to overcome its weak human foundation and risks falling into unbiased optimism, the report concluded.

Read more: India provides 80 million rural households with tap water

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