Economist Explains Why India Can Never Grow Like China

Economist Explains Why India Can Never Grow Like China

The 1980s marked a pivotal moment in the economic trajectories of China and India.  Although both nations started at relatively similar economic standings, China rapidly outpaced India, transforming itself into a global economic powerhouse.  Today, as China's economy shows signs of deceleration and Western companies seek alternative manufacturing hubs, a crucial question arises: Is it now India's turn to replicate China's economic miracle? A Tale of Two Economies: The Initial Divergence To understand the present, we must first examine why China's economy surged ahead in the 1980s and 1990s while India lagged behind. The liberalization of China's economy in the late 1970s and early 1980s was a decisive factor in its growth.  This reform allowed private entrepreneurship to flourish and foreign companies to invest in China, turning it into the manufacturing hub of the world. However, the story is more complex than just liberalization. According to Professor Raghuram Rajan, …