Free Comparison Of Political Regime Type Of China And India Essay Example
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Two recently emerged Asian economic giants, China and India, that became magnets for foreign investments and continue to impress the whole world by the dynamic and sound growth are still among the poorest countries in terms of GDP per capita. They both are leaders in terms of population growth and labor force costs. Despite such close neighborhood, these two countries keep only formal diplomatic relations and do not trust each other too much. India is still overshadowed by the China's export and import performance and some experts think that it was China's political regime type that led it to dominance in the region.
China proclaimed its course to build communism since its leader Mao Zedong gained success that led to economic growth after implementation of communism ideas. His successor Deng Xiaoping launched set of reforms that fueled economic boom. These reforms changed country opening it and making possible for it to become world power. Though state control remains very tight, Chinese leaders are building system which is based on communist ideas but also do not neglect adoption of western achievements (Minzner, 2011).
The modern political regime type of China is called neo-authoritarianism (it is considered that the Chinese people have already built communism and now they has moved toward technocratic authoritarianism) and the country is controlled by single ruling party – the Chinese Communist Party (the CCP). During recent years it has stepped up its pressure on business and organizations but continue to maintain tight grip over mass media. “China remains anything but democracy” as it is mentioned by Leger (n.d.), and its efforts to give more freedom to small and medium business is nothing but a public posturing. The CCP has control over economy and is a main decision-making body. It also sets primary directions for investments, issues five year plans and control resources allocation. As it was emphasized by Friedman (2009):
Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction, it reduces the area over which political power is exercised. In addition, by dispersing power, the free market provides an offset to whatever concentration of political may arise. The combination of economic and political power in the same hands is a sure recipe for tyranny.
The Chinese government emphasized economic development, set it as a chief aim and now no one can doubt that this goal has been reached in every region of this country. Some cities and provinces received more, some less but development of rural areas is sizable. Many people are lifted out of poverty, however, it is very difficult to do taking into account the continuous increase in the population. In this country centralized decision making process proved to be efficient. However, in reality everything is not so easy as it may seem at the first glance. There are lots of supplementary organs that must approve a decision before it goes to the State Council. This takes time and causes disputes between those officials who have opposite points of view. That is why a process of making decisions has not so much to do with China's progress.
The country started liberalizing its overall trade and applied most-favoured-nation tariff at a level that is much less than Indian, for example. They began to develop their innovation and technology sector because these industries are of high importance and most needed today. Finance sector remains under government control but facing the aftermath of recent 2007-2009 financial crisis, this all helped China to avoid depression that the developed countries suffered. Moreover, other factors such as, for example education and employment, also influence possibility of economy to grow. Illiteracy still remains high in China where people in rural area have limited access to education. Though this problem is now receiving more and more attention. There is no doubt that political system of China has effect on its economic development but it does not play the major role.
Bhakal (2010) mentioned that “while the Chinese government prefers development over human rights (like freedom or religion or speech), the Indian government, while guaranteeing these rights, neglects development”. Indian officials admit the fact that economic development is very uneven and some states receive much less than other if receive something at all. The illiteracy rate of India 4 times exceeds Chinese rate. Almost 60% of Indian population are employed in agriculture. Neglection of these facts has brought up inner problems such as separatist incentives that prevent normal development.
Building democracy is a key issue that Indian officials have as an excuse. This country has a lot of political parties, thus it secures freedom of speech and constitutionally grants equality and liberty for its every citizen (Darlington, 2014). But being democratic country is not just what is needed for being developed and able to provide normal living standards for everybody.
The largest world's democracy started its reforms only in 1991. Now it proceeds with higher speed than China has been doing since 1978. System of commerce in India is still based on the Soviet model and the country's main efforts are directed to adopt new capitalist-based business models. Transport industry is week and has absolutely no impulse for development. Expanding service industry may become a success for India, though now the progress is poorly demonstrated in manufacturing industry. It is also worth mentioning that India is ahead in financial transparency and predictability. In general India has much more transparent economy. Indian companies are used to merges and acquisitions especially in metallurgy and pharmaceutical industry that proves the fact that India is more open to globalization than China (Runckel, 2007).
Yet in terms of doing business and building appropriate business environment India is far behind China. According to Dehai (2003, p. 17),“for India any hope of growing faster depends on less government rather than more, on harnessing the private sector entrepreneurial talent which has always been there but was stifled for a long time”.
Lets consider example. A businessman starts doing research about where to put money and extend his or her business internationally. China or India are among those countries which he or she would check as a priority countries. They show stable and sound growth and labor force is cheap. After little efforts and searching the Internet, this investor comes to very confusing conclusions. Neither India nor China is a heaven for doing business. And this confusion comes down to political regime in the country. According to Kusek (2009), who collected all necessary data on these both countries, China goes before India in World Competitiveness Index (29 and 49 respectively). While China ranks first in FDI Confidence Index and India follows it immediately as second, Index of Economic Freedom demonstrates that both China and India are at the bottom of this list (132 and 123 respectively). Business Environment Index and Ease of Doing Business show that India performs worse than China. So would this investor start its activity in one of this countries? I think he or she needs more data and research but China looks more attractive.
India only starts its economic reforms and its way is far harder than China's because it chose to change model completely, to move from socialist basics to capitalist. This takes time and requires lots of efforts thus it requires wise and risky government. Until now it has been reforming and liberalizing its economy more quickly than China did but the question is whether it is justified. Unfortunately, people have not started living better, poverty is still high. I'd like to emphasize that it is not only government's task to change country for the better. A desire to build new economy must become a national idea. In China this idea comes out of communist fundamentals, in India government must seek other way.
Bhakal, M. (2010, February 11). The Difference in the Indian and Chinese Governments’ Approach towards Separatism and Development. [Web log comment]. Retrieved from http://blog.foolsmountain.com/2010/02/11/guest-post-the-difference-in-the-indian-and-chinese-governments-approach-towards-separatism-and-development-and-what-they-can-learn-from-each-other/
Darlington, R. (2014, June 21). A Short Guide to the Indian Political System. Retrieved from http://www.rogerdarlington.me.uk/Indianpoliticalsystem.html
Dehai, M. (2003). India and China : an Essay in Comparative Political Economy [PDF document]. Retrieved from the IMF Official Site: https://www.imf.org/external/np/apd/seminars/2003/newdelhi/desai.pdf
Friedman, R. (2009, August 20). Free to Choose. Quoted in the Wall Street Journal, A13.
Kusek, P. (2009, September 14). China vs. India: Which is Better for Doing Business? Retrieved from http://blogs.worldbank.org/psd/china-vs-india-which-is-better-for-doing-business
Leger, L. (n.d.). India vs. China: How far the political system could influence growth? Retrieved from http://spontaneousorder.in/india-vs-china-how-far-the-political-system-could-influence-growth/
Minzner, C. (2011). Countries at the Crossroads 2011: China. Retrieved from https://freedomhouse.org/sites/default/files/inline_images/ChinaFINAL.pdf
Runckel, Ch. (2007). India and China - Looking Below the Surface to Compare These Two Rising Asian Business Giants. Retrieved from http://www.business-in-asia.com/asia/comparing_china_india.html
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