AsiaEast AsiaWhy China is better in terms of Politics and Economy as compared...

Why China is better in terms of Politics and Economy as compared to India?

China and India have proven to establish economies with staggering foundations. Both countries are the pride of Asia in terms of population, culture, and diversity. India being smaller in size, has managed to catch up with china’s population. This makes us compare the two countries on various matters and affairs. The ideology of Politics and Economy in both countries is ingenious and meticulous in every manner. China ranks 2nd in the world at the nominal GDP with a value of USD 14 trillion, while India ranks 6th with a value of USD 2.9 trillion. This comes to show that the Chinese have a better strategy at controlling their politics and Economy.

Why is China ahead of India?

GDP comparison for the year 2020:

As of 2020, both countries have come a long way in terms of GDP per capita. India is expected to reach 2900 USD by the end of 2020, and China is expected to reach 18450 USD by the end of 2020, according to Trading Economics global macro models and analysts’ expectations. China and India together contribute more than half of Asia’s GDP. China dominates India in this race being 5 times greater than India’s GDP despite having similar factors such as population and unemployment.

Influence due to Politics:

India is considered as the world’s largest Democracy. India has a federal form of government, resulting in every state comprising of its own government. The Governor is termed as an executive with the head actually being the Chief Minister of the state. But the ultimate power rest in the hands of the Prime Minister. This structure causes a hindrance to the maturing of the country in terms of development. During an event of the national project, many factors such as money, power, and politics come into play resulting in a disaster. Due to insufficient funding towards infrastructures such as railways, airports, roads, etc., there seems to be a reduced GDP. Enormous projects in the construction sector tend to contribute on a noticeable scale toward the country’s GDP.

In China, their political system is known as “socialist consultative democracy“. The Chinese communist party is responsible for governing the entire country, taking responsibility for national projects. Recently in China, Eight cities and provinces announced their investment budgets, which in total amounts to USD 4.8 trillion. A mass project like this is best left in the hands of an individual authoritarian political system. China is focused on upraising its Economy by increasing domestic consumption after the global pandemic is under control.

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Few Reasons Why the Indian Economy went DownHill:

In 2016, India underwent Demonetisation, which led to less domestic consumption leaving many unemployed and jobless, also decreasing the demand for jobs. The Indian government brought in GST, which had a direct impact on the export industry. 2017 was a year of distress as there was a delay in the refunds to the exporters. In 2018 the IL & FS crisis had an impact on the Non-Banking Financial Companies.

The Indian Financial system plays a major role in India’s Economy. The bank provides bad loans incapable of being paid back, most of which is considered a huge sum on a global level. During the UPA-ll term, the NPA ratio took a massive hit and still considered to be high. As of 2019, Rs 1,65,000 crores have been lost due to bank frauds alone. To sum it all up, The Demonetisation, roll out of GST, and incapable Indian banks have caused the Indian Economy to fall.

Commerce plays a huge role in economic growth. Commerce is basically looking after the distribution of goods and services made available by the industry. A simple yet complicated course that has a noticeable change in economic development. Small scale industries are important as it helps by increasing employment and economic development of India. Commerce improves the growth of the country by increasing urban and rural growth. India tends to lack in Commerce leading to poor growth in the Economy.

Why is China’s Economy Growing so Fast?

China’s secret lies in its high productivity growth. The Chinese were keen on creating market-oriented reforms, which resulted in their productivity miracle. These oriented reforms brought profit incentives to rural enterprises and other small businesses. China successfully managed to shift farmworkers to factory workers without causing an urban crisis. The Chinese follow a five-year plan, which directs them in economic priorities and essential policies. China is also smart when it comes to financing in exports. It takes an absolute interest in the conversion of yuan to a dollar when products are exported, making sure the cost is lesser than products produced in America.

China is providing funds for small startups and businesses in order to boost its Economy. The central government aims at using these small private businesses to generate new growth opportunities. Huge companies like Alibaba have helped boost the economy by providing a little push for startups. Most of these investments are directed towards companies with innovation and promising performance in markets. Microsoft had launched Ventures in China, a startup initiative providing guidance and funding on cloud-computing firms.

China is second to none when it comes to innovation. The country provides a significant investment in innovative industries portraying dominance in their fields. These investments have brought them to the top in Robotics, Artificial Intelligence, and Automated services on a global scale. Speaking of the Global Market, China is considered the largest export economy in the world and the 33rd most complex economy, according to the Economic Complexity Index. In 2019, China exported USD 2,499 billion dollars showing its importance in the Global Market. Rest assured, we can expect better performance than this in the years to come. The Global Market seems to have a bond with China that speaks for itself in terms of money.

The export trade in china mainly deals with industries comprising electrical and electronic machinery and equipment and clothing, textiles, and footwear. International trade has been a pathway to introduce new equipment and technologies and meet shortages in the domestic Economy. The most exported Trade product would come under phone systems and parts. China utilizes its trade to bring its innovation to the world at low prices.

In the older days, China was famous for its very own silk trade via the famous silk road. The silk road was a vast trade network connecting Eurasia and North Africa via land and sea routes. At that point in time, China was the major producer of silk, meaning they had to provide all over Asia as well as Europe. This opened up job opportunities for small-time workers interested in transport. Even in the olden time’s China was dominant in export trade, which has now lead to a dynasty of pure success.


China’s economy can be termed as an unstoppable force when we take into consideration its success and ideology to tackle any situation. Due to the recent Global pandemic, China has abandoned its annual growth target. China’s top financial planners have been cautious of having the government borrow more money to give out checks to the public. Although the world economy is crashing, China is most likely to rebound slowly and rebuild its Economy.

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