China vs. India

Conventional wisdom states that China will become the next world superpower. The billion-strong nation has been rapidly modernizing, consolidating its manufacturing base, building a high-tech economy, and educating its youth. The result has been unprecedented productivity growth, with China recently becoming the world's fourth largest economy. Some Americans are genuinely concerned that soon it will overtake even the U.S., both economically and militarily. But by and large, most Americans view China as an opportunity on the rise, and many are scrambling to invest in its markets, learn its language and history, pursue its entrepreneurial opportunities, and immerse themselves in its culture.

Now at this moment, it probably seems I'm at the point in this essay where I'm about to state that I disagree with the above assessment.

But this time I don't. Everything I mentioned has either already occurred or stands a great likelihood of occurring.

But while I certainly can't deny China's upward trajectory, I believe that another nation will ultimately overtake it: India. Why? For the simple reason that China is a Communist dictatorship while India is a democracy.

Like China, India is home to a billion plus, has experienced rapid GDP growth, features a burgeoning high-tech sector, and is rapidly modernizing. But unlike its Far East neighbor, India lives with American-style capitalism, free elections, intellectual property rights, and an unrestricted press. In combination, these create opportunities that China cannot hope to match under its current governmental structure.

China certainly has opened its doors to greater capitalism in recent years (and, in fact, this has been a primary driver of its extraordinary growth). But it still suffers greatly from socialist misunderstandings of people's self-earning motivations, lax intellectual property rules that stifle entrepreneurship, economic centralization that adds inefficiencies to markets, and a government whose draconian one-child policy has played havoc on the nation's future social fabric and workforce.

India, on the other hand, faces none of these issues, and sits on a wide-open path to national prosperity. China may be a good place to invest, but as I see it, India is even better.