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The Indian Tortoise and the Chinese Hare

“India everywhere” was the theme at this year’s World Economic Forum. In the West, there is so much focus on China that India’s achievements are often acknowledged only as an afterthought. As if to underscore the point that political stability must triumph in the long run, the Indians plastered Swiss buses with the banner: “India: The World’s Fastest Growing Democracy.”

The India media blitz was a huge success. In Davos, speaker after speaker touted the idea that even if China is ahead now, over the longer run, the race between Asia’s two giants is a toss-up. For a few days at least, India’s emergence as a superpower on par with China was taken as a fait accompli. But what is the reality in the race between economies with more than a billion people each?

On the surface, China has opened up quite a lead on India. Twenty-five years ago, at the start of the contemporary wave of globalization, national output in India and China was about the same. Now, by any measure, China is more than twice as rich.

But the real difference is not so much that successful Chinese are doing better than successful Indians. After all, the Indian elite are world-beaters, as Lakshmi Mittal’s bold $22 billion bid for French steelmaker Arcelor shows. No, the real difference – whether we like to admit it or not – is that China’s communist government has succeeded in globalizing a much larger share of its population than India’s democratic government has managed to do.