This book attempts to cover the economies of , both of which are home to almost two-fifths of the world'shuman population and are the world'sfastest growing economies. Both have adopted different models of growth and both models have their advantages and disadvantages. The book, while comparing the growth experiences of these economies, highlights the point that most analysts tend to consider only the positives of the Chinese model and the negatives of the Indian model, tilting the balance in China'sfavour completely. It rightly argues that if the two models have to be compared, they should be compared in their entirety and not on specific aspects alone.
India is the other country which is touted as coming quite close to it. Both are thus often talked about as ?Asia'sun-identical twins? with both following very different, if not diametrically opposite, paths to reach the same heights. Due to its different cultural and political structure, India cannot achieve or perform many tasks which China does quite easily, like building cities like Shanghai within a decade. Nevertheless India too is creating a space for itself by following a path of growth, which is different from the ones treaded by the Asian Tigers, as well as by China.
The book is divided into three sections and includes an Appendix after the sections. The first section deals with the usual parameters used for comparing the two countries. With reference to the growth rate, FDI inflows, exports and magnificent cities, China is considered to be much better than India. China'sstock of FDI is more than 10 times that of India?s. In 2006, China grew at 10 per cent for the past three decades, while India struggled to achieve 6 per cent growth. But, the author points out here, the situation is not as simple as the numbers suggest. For instance, China'sFDI numbers are inflated to present a misleading picture. According to Chinese official figures, FDI inflow was of US$ 77 billion from OECD to China during 1995 and 2000 but OECD reported that the figure was only US $39 billion. Moreover 30-40 per cent of Chinese FDI consisted of what is called ?round tripping? or ?flight capital?, which is nothing but Chinese money coming back to the country as FDI through illegal means to gain advantage of tax regulations.
The book discusses whether the yuan is undervalued and how it is undervalued and is contributing to rising forex reserves. It also discusses whether the high forex reserves are good for the country or might prove detrimental in the long run.
(Macmillan India Ltd, 2/10 Ansari Road, Darya Ganj, New Delhi-110 002.)
