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India versus China: Beyond Infrastructure

Posted on Thursday, Mar 15th 2007

By Dominique Trempont, Guest Author

[SM: Business Week’s Cover Story on India’s Infrastructure troubles, in my opinion, are being addressed seriously by the government and public-private collaborative efforts. We will cover this in more detail later. Dominique’s piece raises some other questions that are not being addressed as aggressively by India.]

I just came back from a trip to China and am scheduled to go back in a couple of months, once if not twice. I spent four weeks in India every year in the last 2 years and expect to continue at that pace. On the flight back from Shanghai, I was thinking about the factors that will influence this neck-to-neck race towards world economic dominance.

Where I see similarities is that both countries do a good job mapping and executing on big infrastructure milestones, such as huge ports, airports and airlines, cellular networks, etc.

Where I see the biggest difference is the way China tackles strategically its core challenges:

* Raw materials: China filled up a role gap left by the West in Africa and has become very active in the development of Africa to secure a stable raw material supply including oil.

* Education: In the long run, the quality of education is THE key factor for economic development and growth. The Chinese government has reviewed its needs in schooling and universities, figured out that they could not build the classical teaching infrastructure fast enough, and has decided to build the largest online education capability on earth. India has a first class education system for a select section of gifted children, but it doesn’t scale. China could leapfrog every single country and scale a world class on-line education capability in a few years.

* Electricity: India has massive projects to expand its electricity grid, including nuclear energy plants. On the other hand, electrical power is unreliable today in India and causes significant disruptions. It is amost considered as normal there. In contrast, China seems to have a stable electrical grid.

* Water: One can hardly drink tap water in India while China is looking at seawater desalinization on an economic and very large scale to support its drinkable water needs. [See one of my favorite young companies in this field, Energy Recovery, that works closely with China.]

* Pollution: In addition, I see China very involved in other green technologies. I would not be surprised if China came out with a killer solar-powered car in the next 5 years. In contrast, I see Tata, in India, focused on designing and producing a $2,000 gas powered car. Can you imagine what tens or hundreds of millions of those will produce in terms of CO2 emission?

Culture, organization and value system are what will determine the winner in this race towards a stable, sustainable and non-self-polluting economic titan.

China reminds me a little of Germany in the 20th century and in the Industrial Revolution: very organized, very focused and determined, facing trade-offs head-on and being gutsy on a large scale to leapfrog everybody. Chinese engineers are very good at reverse engineering the best hardware and reproducing it at lower cost. For the future, China also reminds me of Singapore with its very systematic and well thought through world class technology development, education and environment protection.

India reminds me of Italy in the 15th century, with its creativity, individualism, talent, spirituality, respect of its cultural heritage … and systemic chaos. It is not by accident that India produces herds of very talented software developers as it takes a fairly unstructured thinking to excel in this field. I was not surprised to see a dozen of biotech start ups, founded by Indians, leveraging the most diverse genomic pool in the world. I predict that, beyond software, India will become a world power in biotech over time.

At the end of the day, China and India will probably follow their DNA and develop themselves very differently, in a complementary manner. Two great countries. Two great histories. Two great cultures.

The remaining question: how will the US and Europe maintain their privileged economic positions in this race?

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[…] Interesting perspectives on China vs. India by Dominique Trempont China reminds me a little of Germany in the 20th century and in the Industrial Revolution: very organized, very focused and determined, facing trade-offs head-on and being gutsy on a large scale to leapfrog everybody. Chinese engineers are very good at reverse engineering the best hardware and reproducing it at lower cost. For the future, China also reminds me of Singapore with its very systematic and well thought through world class technology development, education and environment protection. […]

China vs. India at Nyquist Capital Friday, March 16, 2007 at 8:20 AM PT

Brilliant post. The comparison is spot on though a little biased since India is doing a lot but it goes unnoticed. But I do agree on the point that in the long run, India and China would develop into very different economies both leveraging on their strengths.

Anshul Friday, March 16, 2007 at 2:40 PM PT

We are a small startup company based in Israel. We have developed a few industrial projects. The water desalination plant is based on innovative technology and has a registered patent. All the calculations pertaining the effectiveness and projected output of the planed plant are completed. We are presently looking for investment to build a pilot project which will be most suitable for countries like China or India (following the article published by you regarding the challenges facing these countries), for additional info see attached patent.
(WO 2004/014802) WATER-DESALTING PLANT 19.02.2004 B01D 1/00 TARAN, David
I will be happy to provide you with all necessary information
Truly yours
Ms. Raya Shafir

Raya Shafir Sunday, March 18, 2007 at 4:19 AM PT

Good Analysis

shreya Sunday, August 19, 2007 at 3:21 AM PT

And yet, Germany lost two wars and remained divided among world powers for forty years. Hope the author remembers that.

Abhishek Wednesday, October 8, 2008 at 9:28 AM PT

No power is perpetual, Abhishek. Look at America today. And look at the British Empire.

Sramana Mitra Wednesday, October 8, 2008 at 12:59 PM PT

Interesting birds eye view comparison between India and China though my personal belief is that these two countries are not comparable as they are not even close to be compared with respect to the infrastructure or global economical power.

Soon probably we will compare US and China with respect to global economical power (https://www.rediff.com/money/2008/oct/06bcrisis1.htm) very soon.

Indian economy has it’s unique problem of enormous dependency on agriculture and thus on the rain fall in right time and in the right places and the huge population density being 1/3rd in size of US and China. Industrialization in a democratic country of around 70% people depending on agriculture is harder than in a country where govt. owns properties and can decide with more flexibility about long term plans.

Santanu Wednesday, October 8, 2008 at 11:23 PM PT

1- Chinese maoists talk as nationalists . Indian nationalists talk like communists and maoists. Read Amartya Sen’s incissive critique of maoism that creates daily murder ( It is non-existent).

2- When science is a cultural argument, China can beat west in scientific control of the population. Indian economists, historians and politicians on the other hand haven’t figured out how to apply science on people. Every time they “discover” India with poverty and snake charmers, Indians come back – Last time a bunch of them landed in sillicon valley.

nup Saturday, February 27, 2010 at 9:55 PM PT

3- Chinese got a bloody nose, but they are number uno maoist communists in the world.

In contrast, Indians are never going to be number uno Britishers or French men. It is a struggle to teach Indian kids the local fruits and grains, they are more comfortable with strawberries, shakespear, derrida…Most would classify eggs as veggies, because french do that.

nup Sunday, February 28, 2010 at 3:52 AM PT