China’s churlish reaction to Barack Obama’s visit to New Delhi this week suggests that the US president and Narendra Modi, the Indian prime minister, are on to something important in their attempt to remake the geostrategic map of the world, writes FT analyst Victor Mallet:
Mr Obama and Mr Modi…tacitly contrasted Chinese authoritarianism with their own declared respect for freedom, democracy and the rule of law.
Mr Modi is not saddled with the historical baggage of anti-capitalism and suspicion of the west that made the Congress party lean towards the Soviet Union while publicly adopting “non-alignment” during the cold war. Instead, he finds himself propelled into a friendship with Mr Obama by 3m Indian-Americans, many of them prosperous entrepreneurs hailing from his native Gujarat.
“Modi comes in and finds that there is much greater strategic convergence with the US vis-à-vis China,” says Mr Vaishnav. “He doesn’t have this historical ideological baggage” and is not embarrassed about openly befriending the US. “That,” Mr Vaishnav says, “has to be counted as a significant break from the past.”
Autocratic China has plenty of capitalist superfans in the West, but the latest forecast suggests that the tide may be turning in India’s favor, possibly for good. The World Bank anticipates (PDF) that, by 2017, India will be growing faster than China, writes analyst Allison Schrager:
Once that happens, growth will depend on demographics and each country’s ability to innovate. India has a better outlook on both fronts. Its population is growing; China’s is shrinking. It’s harder to predict which country will be better at innovation. Signs point to India because democracies, with their secure property rights and general stability, tend to be better at fostering successful entrepreneurship. China’s authoritarian capitalism is a new model, and it’s not clear whether it can produce the sort of environment in which people take chances, form businesses, and invent things.
India also has some long-term advantages over China, the FT adds:
First, its demographics are considerably better, with a relatively much larger cohort of young people entering the workforce. Second, while China requires great political upheaval to become a prosperous liberal democracy, India has only to improve the imperfect democracy it already has. Third, China is beginning to exhaust the rapid manufacturing phase of expansion, and may find growth harder to come by in the future.