What’s China doing differently than India?

Dear Friends, I am writing this very small article just to mention some major differences between the Indian and Chinese economy. I tried to be very simple and straight-forward in this article.

The Key Factors:
1) The Chinese economic model has been screaming “Foreign Direct Investment” and “free enterprise”.

2) The Chinese export market is mostly funded by Foreign Direct investments. Majority of the export manufacturers have foreign investments – a large portion of it coming from the Chinese population living abroad!

3) China has empowered its local authorities to clear foreign investment proposals. This makes the process faster than that in India, where RBI still has a major role to play with respect to inflow of foreign funds.

4) India’s policy to protect private domestic players is in contrast to China’s ‘free enterprise’ policy.

5) India hasn’t been as successful in tapping the potential of NRI funds.

6) Banks in China furnish loans at comparatively low interest rates to encourage entrepreneurship.

7) China has channelized its economic policies on manufacturing growth as well as the services industry. For example, the growth in the hardware manufacturing has fueled demand for related software services. One must note here that the cheap and hardworking, disciplined labor from China poses a threat to India’s software dreams!

8) The infrastructure development in China has also been overwhelming. The rising skyline of Shanghai is a result of a decade of hard work and constant labor. The Chinese economic policy has been protective of its State ventures. Most of the infrastructure development in China has been undertaken by the public sector.