China vs. India, revisited II

Jeremy Siegel, a columnist for Yahoo! Finance, chimes in. See link.

China vs. India, revisited

Nicholas Kristof of the New York Times captures the debate well:

The great race of the 21st century is under way between China and India to see which will be the leading power in the world in the year 2100.

President Bush's trip to India next month is important, for we in America must brace ourselves to see not only China looming in our rear-view mirror, but eventually India as well. India was the world's great disappointment of the 20th century, but now it's moving jerkily forward with economic reforms, reminding me of China around 1990.

One of India's (and China's) greatest strengths is its hunger for education. Most American newspapers lure readers with comics, and some British tabloids with photos of topless women, but a Calcutta daily newspaper is so shameless that it publishes a column on math equations. Imagine titillating readers with trigonometry!

I visited the ramshackle Hasi Khusi Kindergarten and Primary School in a poor area of Calcutta, where most of the pupils' parents are illiterate street vendors, rickshaw drivers or laborers. Out of an average family income of $23 a month, the parents pay a one-time fee of $13 for registration and then $2.30 a month.

"What they didn't get, their children must get," explained the principal, Sampa Sarkar. Even kindergartners study English, Bengali, math, art and music - and do 30 minutes of homework. Private schools like this one are booming all across the country.

With India's ever-deepening pool of English speakers, its outsourcing boom will continue. Your next employment contract may be prepared by an Indian law firm, your mutual fund advised by Indian analysts - and if you need elective surgery, you may get it at a luxurious Indian hospital that will let foreigners combine their medical care with a recuperative vacation in Agra or Goa.

India has a solid financial system, while China's banking system is a catastrophe. And India is in better shape demographically for long-term growth: China has already reaped most of the economic benefits of population control and is now rapidly aging, but India's population will be disproportionately working-age for many decades to come (a factor that strongly correlates with economic growth).

India's democracy, free press and civil society also provide a measure of political stability. Sure, India can erupt, as it did with the slaughter of Muslims in Gujarat in 2002. But the risks of social and political explosions in India are declining, while in China they may be rising.

China will probably manage its eventual transition to democracy with bearable turbulence, as Taiwan and South Korea did, but with China anything is conceivable, including a coup d'état, mass unrest or even civil war.

Yet if democracy is one of India's strengths, it's also a weakness. Prime Minister Manmohan Singh knows exactly what to do, and I've rarely met a leader more competent (or less charismatic). But his reforms are stalled or slowed in the Indian political labyrinth. India's basic problem is that its economic policy-making isn't nearly as shrewd, pro-growth or farsighted as China's.

That's a tragedy: we should all want India to demonstrate that democracy is an advantage. But Indian lawmakers aren't helping.

Foreigners are still blocked from directly investing in some sectors in India, like retailing. Privatization is lethargic. Food subsidies are soaring and are so inefficient that it costs 6.6 rupees to transfer 1 rupee's worth of food to the poor. Restrictive labor laws mean that companies hesitate to hire, and regulations tend to suffocate entrepreneurship.

The upshot is that India has enjoyed a boom that has added few jobs. Only about one million people work in technology, and manufacturing, which could absorb tens of millions of poor rural laborers, trails even Bangladesh. The losers are India's poor.

And while China has been exceptionally shrewd in upgrading its infrastructure, India has been pathetic. India's economic future is marred by its third-rate roads and ports.

India is also horrendously mismanaging its AIDS crisis; it may already have more H.I.V. cases than any country in the world. AIDS casts a cloud over this nation's entire future.

The bottom line is that the once-great nation of India is reawakening from several centuries of torpor, and facing less risk of a political cataclysm than China. India is poised to again be a great world power.

But over all, my bet is that China will still grow faster and win the race of the century. I'm going to tell my kids to keep studying Chinese, rather than switch to Hindi.

The End...

... of our official trip.

An aside: the strangest sink ever

The sink in one of Shanghai's trendy bars.

Shanghai New Source Real Estate

After discussing the Shanghai real estate market with us, Mrs. Tang took us on a site visit of one of her company's complexes. She then invited us out for dinner where...

Wu laoshi (aka Jihong) returns to celebrate the end of our trip!

A wonderful feast.

A toast to the host!

Old friends closing out the night.

PayPal China

Jeff Liao, Country Manager, James Zheng, COO/CFO, and us

We also met with Ying Wang, Chief Marketing Officer (not pictured)

Linktone Ltd.

Xin Ye, CTO, and us

UC Berkeley Haas Alumni Dinner

Beard Papas

Japan's finest cream puff goodness, available not only in East Asia, but select US cities. Look out Krispy Kreme...

Shanghai bound

Morning train to Shanghai. Most tried to sleep. Others had too much energy.

Recommendation: Nanjia's Kitchen (sp?)

Nanjia's Kitchen. This place was a lucky find. Excellent, full meal in a great atmosphere. Cost per person: 15 kuai = $1.86. We loved it so much, we went back our second night and splurged: $2/person.

Blogcn.com

Alibaba Technology Co.

Trapp Lewis, Senior Director of International Business Develpment, with us

Sightseeing in Hangzhou

Twice the tian.

The famous Hangzhou Dragon Well Green Tea, being dried.

This "ancient" pagoda, complete with escalator, may have only been built earlier this decade (to be fair, "rebuilt"), but it makes for good pictures.

Beggar's Chicken: the chicken which keeps on giving

You can pick at this for hours and still find tasty morsels hidden in this dish.

To Hangzhou by train

These trains were exceptionally nice. Everyone slept well on the overnight to Hangzhou.

A visit with the Vice-Governor of Tianjin

Luo Jia Jun and us

China Unicom

Day off... Tourists at last

It may not be as multi-ethnic as our group, but I think this perfectly captures China's new direction (zoom in on the new book). Actually, perhaps it better captures the rest of the world fighting to get into China. Hmm...

Just in case you have a Starbucks craving while you're busy being a tourist, have no fear - there's one in the middle of the Forbidden City. Seriously.

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Another recommendation. When in China, take full advantage of the massages. You should ask around to find legit places, but at around $10 for 90 minutes, you can't beat it. This place even gave us complementary food and drink.

Expat nightclub recommendation: Latinos

I'll be the first to recommend checking out the hole-in-the-wall local joints to anyone visiting a new country - but if you need a change of nightlife scenery in Beijing, check out Latinos, a trendy salsa club. I know what you're thinking - Salsa... "Latinos"... in China... - but the live music was great and many of the patrons were excellent dancers, both expats and locals alike.
We were guided there by our Haas alum/CCTV producer friend.

SINA.com

We spoke with Hurst Lin, then COO of SINA.com. In what was becoming a trend for the day, Hurst later announced he was leaving SINA for Doll Capital Management (effective March 31st, 2006) - he will also become a Director of SINA.com.

CCID Group

Zhang Xu Ming, President of CCID Group, and us.

Four hours later, Mr. Zhang left CCID to become an administrator of Qingdao. This is a common occurance for top government officials - 5 year rotations through both state-owned enterprises and government administrative positions.

China Information World: one of CCID's many publications.

It was amazing - every floor had a welcome message to us, either on a printed sign or projected image. We felt very welcomed.

Cultural Research

In any new cultural environment, it's important to sample the local cuisine:

Yes. Beijing (Peking) Duck flavored Lay's chips. (Hey, when I was in New Zealand, the flavor was mutton and mint. Actually, pretty tasty. FYI: This here Beijing Duck flavor was basically rebranded barbeque flavor.)

It's also important to experience the traditions of ethnic minorities, like the Uigurs.

Ah... snake lady. She charmed us all.


[As seen at 'A Fun Ti' restaurant. Very expensive by Chinese standards, but a lot of fun. Dinner with friends from Microsoft.]

WuMart Stores, Inc.

Dr. Wenzhong Zhang, CEO, and us

WuMart Hypermart store visit

CapitolBio Corp.

Tsinghua Science Park Venture Capital & Tsinghua Tongfang

The Official Trip Begins in Beijing!

Alright... maybe we'll start in the morning.

Tianjin Zhong-Huan Semiconductor Joint-Stock Co.

Outside


Inside

Tianjin Samsung Telecom Technology Co.

Panda! Panda! Panda!

When in Chengdu, it's necessary to visit with the "National Treasure of China", the Giant Panda, living in the Chengdu Research Base of Giant Panda Breeding. These are cute, lazy bums. If you don't catch them during their morning breakfast, you'll miss them - they're asleep the rest of the day.