For unstated reasons, it has become customary to compare China’s achievements in growth, trade, etc. with India’s. Part of this was indeed due to the rapid growth of India in the early years of this century, especially before the onset of economic crisis in 2008. In part, it was politics-driven. Western researchers came to look upon India as a counterpoise to China’s dominance in Asia. Professors and analysts joined the fray to write about the “winners” in Asia. Some compared China’s “Dragon” with India’s “Elephant” and predicted that the elephant would win at the end. Prof. Amartya Sen, Nobel Laureate, was inclined to favour the Indian model (democratic) in his early writings. Somewhere along the line, there was a shift in his approach. He began to write articles applauding China’s achievements vis-a-vis India. He, along with Prof. Jean Dreze, published a book (An Uncertain Glory: India and its Contradictions, Princeton University Press, 2013). Their lament was over India’s failure to provide social services such as schooling, medical care and physical services such as water and sanitation. Many other economists have studied in great depth the nature of reforms undertaken by China in its drive to ‘modernise’ its economy and to integrate with the global trading system. Many find India’s record, in comparison, to be weak or infirm. The debate on these issues continues and it is indeed difficult to keep track of the flood of literature on this genre. It is no surprise that these issues centring on the comparative achievements of India and China in economic growth, trade and poverty alleviation have been the recurrent subject matters of seminars held by universities and research bodies. The endeavour is to get an insight into the latest trends on the ground and in research works to facilitate policymaking in the Ministries and to evolve corporate strategies. The flip side is that with so much work already done on these issues in recent years, it is difficult to fill the gaps unless the participants have first-hand experience or done original work. The book includes 17 papers submitted at the International Seminar on Economic Growth, Trade and Poverty held during 6-7 December, 2012. The seminar was organised by the Institute for Social and Economic Change (ISEC) in collaboration with the Sichuan Academy of Social Sciences, Chengdu, Sichuan, China. The broad theme of the seminar was ambitious. Out of 17 papers, only four deal with trade, growth or poverty alleviation. One narrates and assesses the comparative performance of SEZs in China and India. There are two chapters on food security measures. One paper handles the issue of weak exchange rate and questions its role in promoting exports. One subject is on efficiency-versus-size issue for firms and has no bearing on the broad theme of the seminar. One Chinese professor draws lessons for China from India’s experience in rural finance. There are two articles on issues like corruption and governance. Another professor from Sichuan Academy explains the scope for India Sichuan economic cooperation. Sadly, the chapters are not focussed on the main theme and hang out separately without cohesion. The concluding session at the seminar seems to have discussed the broader issues better. The most interesting paper is on the comparative performance of SEZs in China and India. The author narrates at length the failures in conceptualising SEZs in India and also in their implementation. The manner in which tax and other incentives operated in India have led to shifting of domestic production to Zones without actual addition to exports. More of I.T. companies have opted for them. China was able to expand the zones over years gradually, while, in India, they have remained islands with no links to the main economy. The chapters on India’s rising trade deficits with China are superficial and are not based on original research. The chapter on weak exchange rate to promote exports seems to strike a radical departure from accepted wisdom on weak exchange rates. It argues that import intensity and import measures have contributed more to promote exports! This is highly questionable and may not stand the rigorous test of lessons learnt from recent “currency wars” in the wake of the QE policies of the US Fed. On India-Sichuan cooperation, the main plank is on I.T. industry. It is not clear how I.T. alone can tilt the balance or help India. Similarly, the chapters on trade deficits of India with China do not provide much material to redress the growing imbalance. The chapters on food security measures are patchy and don’t do justice to the elaborate measures taken both in China and India to create public distribution systems, price support and stock holding. China has been able to enter the global market for pork and grains through acquisition of giant U.S. corporations which will strengthen its food security measures in a big way. This book will disappoint the reader in many ways. It is not focussed on the main theme of the seminar and the papers deal with disparate issues with no common cohesion.
Posted on: Wed, 21 Jan 2015 05:29:00 +0000
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