India vs China
India vs China
In an article in the CPM journal People's Democracy, Left economist Prabhat Patnaik compares India and China's growth stories and argues that there are fundamental differences between their experiences. He says while the two are often bracketed together as "emerging economic superpowers", the difference is becoming more apparent as the impact of the economic crisis reaches Asian shores.
"One may be critical of China's economic policies, notwithstanding their success in ushering in high growth, for a variety of reasons, but it is undeniable that China's economy is on an altogether different footing today than India's," he writes.
He says the first crucial difference is that China's export success was based on manufacturing, while India's export success is related to services, especially IT-related services. Per unit value of exports, he says, China creates larger employment than India since the wage rates of those employed in the former are relatively lower than of those employed in the latter.
Another basic difference, he notes, is that China has had a current account surplus on the balance of payments, while India has more or less had a deficit. "China's surplus has contributed to the building up of its foreign exchange reserves, while India has had to depend upon foreign capital inflows to finance its deficit and its reserves have got built up only because this inflow has exceeded the deficit," he says.
CPI's New Age focuses on the results of last week's by-polls in two Lok Sabha constituencies — the Congress nominee was defeated in Tehri while its candidate scraped through in Jangipur — saying the writing is on the wall for the UPA. The results are a clear indication of the people's mood, it argues.
The editorial concentrates on Jangipur, where President Pranab Mukherjee's son won by a margin of just 2,500. The worrying point in Jangipur result, it claims, is the increase in the BJP's voteshare.