How China Beat India in Race for Success

Fifty years ago this week, the Indian subcontinent broke its colonial chains with Britain, forming the nations of India and Pakistan. India, crippled by partition and poverty, chose a democratic path to the future.

“Long years ago, we made a tryst with destiny,” Indian leader Jawaharlal Nehru said in a speech on the eve of independence, Aug. 14, 1947, “and now the time comes when we shall redeem our pledge. The achievement we celebrate today is but a step, an opening of opportunity, to the great triumphs and achievements that await us.”

At the same time in China, Mao Tse-tung’s Communists were on the final leg of their Long March to victory in the civil war with Chiang Kai-shek’s Nationalists. Emulating the Soviet Union, the new People’s Republic of China--even poorer than India and struggling to survive after years of war and occupation--chose a Marxist-Leninist road.

“Thus begins a new era in the history of China,” Mao said on the eve of the founding of the People’s Republic, Sept. 30, 1949. “We, the 475 million people of China, have now stood up. The future of our nation is infinitely bright.”

In those heady early days, the leaders of Asia’s two wounded giants pledged to lift their countries out of despair. The goal of independent India, Nehru said, was to end “poverty and ignorance and disease and inequality of opportunity.”

It never surfaced completely--except, perhaps, for the brief border war that China and India fought in 1962--but there was a rivalry of sorts between these two have-nots and between their systems. Today, as they prepare to celebrate India’s first 50 years, Indian leaders have been forced to recognize that, at almost every level except one--the important domain of human rights and civil liberties--China has done more to improve the lives of its people, including its poorest citizens.

“I am ashamed,” then-Prime Minister H. D. Deve Gowda told a business group in New Delhi earlier this year. “We talk so much about liberalization. But a Communist country like China can achieve so much while we can’t. This means something is wrong.”

Similarly, Salman Haidar, India’s foreign minister and former ambassador to China, commented in a recent interview: “There is no question that, in a straight-up comparison, China has done much better than India. All the major indicators are better.”

That two senior leaders, a national politician and a brilliant civil servant, could so frankly and passionately criticize their country says much about the differences between China and India, certainly in terms of political openness and freedom of expression.

India’s people are gloriously free to publicly say what they think about virtually anything. And they do--boldly, constantly and incessantly, producing a cacophony of political debate in this country.

China has little freedom of expression, particularly with regard to political matters. Meetings of its rubber-stamp parliament, the National People’s Congress, are somber affairs with no public debate or controversy.

Although Chinese leaders do not hesitate to refer to their nation’s poverty, their references are oblique; their remarks are meticulously phrased so that communism--and the Chinese Communist Party--are absolved of responsibility.

Behind the Indian leaders’ outspoken remarks, however, is the huge concern here about the growing gap in development between the world’s two most populous lands.

Mao’s Brutal Reforms

Seeking to explain China’s large and growing advantage over India in education, health and general standard of living, scholars, diplomats and economists come up with different theories. The most common is that because of India’s diversity--15 major languages, five major religions, countless castes and sub-castes--it lacks the unity and community needed for effective nationwide education and anti-poverty programs.

In an attempt to catch up with China and booming countries in Southeast Asia, India has recently launched market reforms similar to those introduced in China in the late 1970s and throughout the ‘80s by the late Chinese leader Deng Xiaoping. The most important reforms include lowering restrictive tariffs and creating incentives for foreign investment.

But most unsettling to India is an increasing realization that China’s rapid advance is not due merely to economic steps.

Many experts now believe that China’s ability to move ahead so far and so fast is partly attributable to earlier, more brutal reforms--particularly land reform measures--forced at gunpoint in the totalitarian 1949-76 rule of Mao.

The Maoist era is primarily remembered for its terrible setbacks: the 1960-61 famine that followed Mao’s abortive Great Leap Forward and the 1966-76 political reign of terror and persecution known as the Great Proletarian Cultural Revolution.

But particularly in the early stages of Communist rule, in the 1950s, the country benefited from the land redistribution, introduction of compulsory universal education, adoption of simplified Chinese characters that led to greater literacy, and the introduction of health and welfare policies and other reforms that helped restore the country’s spirit and self-respect.

Although it is much more controversial today, the Communist crackdown on religion, superstition, secret societies, triads and clans may also have helped the country break the cycle of endemic poverty.

“China’s relative advantage over India,” argues Harvard economist Amartya Sen, a native of India’s West Bengal, “is a product of its pre-reform [pre-1979] groundwork rather than its post-reform redirection.”

For most of the past half a century, the standard of living in India and China was about the same. In terms of infrastructure--rail transport and roads--and an established civil service, India actually started out considerably ahead of China. After independence, both countries made halting progress.

But even as late as 1960, both had poor records in reducing illiteracy, malnutrition and infant mortality rates. China was in the midst of the world’s last great famine, the terrible extent of which is only now coming to light. In India in 1960, life expectancy at birth was only 44; in China it was 47.

In their early years of independence, both countries were largely dependent on foreign aid and expertise--China leaned on its Communist “Big Brother,” the Soviet Union; India relied on the British Commonwealth and Western donor countries. China under Mao, however, abruptly broke its ties with the Soviet Union in 1962, while India remains a major recipient of Western foreign aid.

By the late 1970s, even before the economic reforms introduced by Deng took effect, China began to surge ahead of India in almost every measure of economic and social development.

Now, in the most recent Human Development Index of countries--based on a combination of literacy, longevity and average income--the United Nations Development Program gives China a rating of 60, near the top of all developing countries. India gets a rating of just 44; in Asia, the only countries ranked below India are Laos and Bangladesh.

India’s ‘Functional Anarchy’

Today, India is the world’s largest democracy--a wildly chaotic land of extremes, of clashing cultures and castes and of deep, engulfing religiosity. It is also a land of problems, of wrenching poverty and simmering ethnic hatreds. “Functional anarchy,” U.S. Sen. Daniel Patrick Moynihan (D-N.Y.) called it while ambassador to New Delhi during the Kennedy administration.

While the caste system and pervasive discrimination against women greatly limit India’s freedom, there are dramatic examples of its resilient democracy.

In Kalahandi, a remote, arid district of Orissa, India’s poorest state, officials with the national Human Rights Commission reported last year that at least 12 people had starved to death.

Investigating the death of Balamati Naik, 45, a widow who died in Kalahandi’s Bolangir district on June 6, 1996, the Human Rights Commission team reported: “Deceased, a widow, fell sick and could not earn her livelihood and died a slow death due to hunger. Son (7 years) was evacuated to mission hospital in serious condition due to hunger.”

At the same time that people were starving in Kalahandi, however, local political officials reported a record turnout for local elections in which the famine was only one of many campaign issues.

“There were starvation deaths, yet at the same time there were genuinely competitive elections,” said Manoranjan Mohanty, a Delhi University scholar and Orissa native. “Starving people voted.”

To Mohanty, this represents the Indian paradox: “There has been an expansion of Indian democracy right down to the grass roots. . . . Poverty and inequality coexist with a rising sense of right, increasing consciousness.”

China is the world’s last great Communist authoritarian state. It is ruled by a regime with blood on its hands. Its leaders are responsible for terrible persecutions and purges, the subjugation of Tibet, a military slaughter of civilians in 1989 and a man-made famine that killed 23 million to 30 million people--more than double the estimated toll of the Holocaust.

Yet China is also a land of progress and achievement, a country that leads the world in economic growth and, as the new millennium approaches, is on the verge on conquering the centuries-old blights of poverty and illiteracy.

“India and China are the two most populated countries on Earth,” said Ding Haiqing, 76, a retired silkworm breeder who lives with his wife and extended family in a large brick home in a prosperous area of Jiangsu province. “At the beginning of the modern age, they were somewhat equal. India was a colonial country. China was a semi-colonial country. India took the capitalist road. China took the Communist road.

“From the facts,” said Ding, smugly surveying his courtyard and meticulously tended rose garden, “I can tell you that China chose the right path from a poor and backward country to a comparatively advanced country.”

To say, as Ding suggested, that India chose the “capitalist road” is misleading. Before the period of reforms, both countries espoused a socialist model for their economies, although India’s was designed with democratic safeguards. It embraced the socialist-democratic model then prevalet in post-World War II Europe.

China, which followed the Soviet model that lifted Russia from a big but backward agrarian state to a global superpower before its 1991 collapse, granted total power to the Communist Party; Beijing continues to crack down severely on any form of dissent.

But somehow the Chinese state, despite the limits on individual freedom, has been more receptive to change and imported ideas. India, even with its impressive democracy, was almost 20 years behind China in giving up a discredited economic system based on a failed Soviet model.

“China has been described as a ‘closed system with open minds,’ ” commented Kito de Boer, a New Delhi-based consultant with McKinsey & Co. “India is often described as an ‘open system with closed minds.’ ”

Power Balance Imperiled

Four of every 10 people on Earth live in India or China. How the two countries fare is sure to have enormous impact on the rest of the world. The breakdown or failure of either place--given their demographic weight--could create a wave of migration unlike any seen before.

Great disparities in development in the two nations--boasting the world’s two largest armies--could disrupt the Asian balance of power. Unchecked development threatens the world’s environment.

Comparing the fortunes of the two Asian giants has long been a parlor game. “Model for Asia--China or India?” asked a 1955 article in the Hong Kong-based Far Eastern Economic Review magazine. “Millions in Asia are watching closely the Indian and the Chinese prototypes of basic change.”

But the comparison has taken on new urgency as the world watches the very different ways in which the two countries and their governments meet the Malthusian challenges of overpopulation and underdevelopment. India is on track to surpass China as the world’s most populous country sometime early in the next century.

“China is the only country in the world comparable with India in terms of population,” said Harvard economist Sen, one of a growing number of scholars of the India-China question, “and when they began their modern era, they had similar levels of impoverishment and distress.

“For me,” Sen noted, “the most important thing is that they were so very similar in the 1940s, so very similar in economic and social development until the 1970s. That makes it very natural to ask how they have progressed since then.”

China’s Progress

So far, at least, China has better met Nehru’s challenge of eliminating “poverty and ignorance and disease and inequality of opportunity.”

Since 1960, for example, China has added more than 20 years to its citizens’ life expectancy. Chinese men live an average of 69 years, Chinese women 71 years. Life expectancy in India, while up, averages 62 years.

In literacy, the differences are more pronounced. Despite a decade of turmoil--the 1966-76 Cultural Revolution, when many schools were shut--China has achieved an adult literacy rate of 81% of its population, compared with 52% for India.

Meanwhile, China’s young are moving close to the once seemingly impossible goal of universal literacy. In China, only 3% of adolescent boys and 8% of adolescent girls are illiterate. In India, more than a quarter of adolescent boys and almost half of adolescent girls are illiterate.

In almost all economic categories, China lopsidedly surpasses India. In 1990-94, China’s average annual growth of gross domestic product was 12.9%, compared with 3.8% for India. India’s per capita GDP in 1994, $320, was just 60% of China’s $530.

India is losing the superiority it once had, dating from the British raj, in railroads and roads. China just finished two rail lines--one linking Beijing and Hong Kong, another tying Shanghai to the far western Xinjiang region--and now matches India’s total rail mileage.

China’s cities--even in the poorest provinces--are booming with construction and development. Haidar, India’s top-ranking foreign service official, recalled his shock when, while he was ambassador in Beijing, China announced that, in just 10 months, it would rebuild a major road ringing the capital and construct more than a dozen overpasses.

“And then,” he noted, “I watched them do exactly what they said they would. . . . Imagine my dismay when I returned to Delhi and we had not even finished the one fly-over [overpass] that was under construction when I left.”

Key to China’s success, say many experts who have compared the development of the two countries, are land reforms instituted shortly after the Communists took power.

Jonathan D. Spence, a Yale University historian, has found that, in the years just after the 1949 Communist victory, 40% of land in China’s south and central agricultural region was seized from landlords and redistributed--benefiting about 60% of China’s peasants.

Confrontations between peasants and landlords were bathed in blood. It is estimated that one in every six landlord families suffered at least one death. The toll in just one year--1950--is believed to have reached 1 million.

But the violent reforms resulted in much more equitable distribution of China’s most precious resource, its limited supply of arable land.

Land Reforms Eroding

There are signs that land reforms are now being eroded in parts of the Chinese countryside. Chinese farmers are still banned from direct land “ownership,” but many have amassed relatively large holdings that they manage and operate in a way virtually indistinguishable from ownership.

Chen Xinghan, 63, was the seventh child in a peasant family in China’s Anhui province. When he was just 6 years old he went to work in a rich landlord’s household. He earned extra money by begging. He joined Communist forces, became a “grass-roots” cadre and helped break up large holdings in the Fengyang district where he still lives.

Now, he runs one of the largest private farms in the province--more than 200 acres--and is one of the richest people in the area. He also owns a brick factory and a rice processing plant. He employs 133 people, including 13 farmhands.

A member of the Communist Party, Chen is proud of his wealth, attributing it to Deng’s philosophy that “to get rich is glorious.”

“I am a landlord,” he said in a recent interview in one of his five personal homes. “But I am a landlord who serves the peasants. I am not a capitalist, but I want to lead all the peasants to get rich.”

But for a few exceptions--notably agriculturally rich Punjab and Communist-led West Bengal--land reform never came to India.

“In contrast with China,” said Delhi University’s Mohanty, “India’s developmental strategy did not ensure that the land belonged to the tiller, so absentee-landlordism, sharecropping and concealed landlordism are still the norm in most areas.”

India’s two most populous states--Uttar Pradesh and Bihar--are still plagued by a near-feudal system of absentee landlords and tenant farming.

“I know it is heretical,” said Nick Bridge, a New Zealand diplomat who served in Beijing and until recently was ambassador to India, “but I think one of the main reasons that China has an advantage is that it underwent a violent revolution. The Communists killed the landlords. India still has them, and they are dragging the country down.”

China, like the Soviet Union, launched a mostly disastrous program of collective farming that reached a low in the 1958-61 Great Leap Forward. In that program, instituted by Mao as an accelerated way to communism, peasants were forced to join production brigades and eat in communal kitchens.

The result was a breakdown in the food production system and the famine that experts now believe killed up to 30 million. The communal kitchens were abandoned in 1962. The collective farms lingered until 1979, when Deng initiated a “household contract system” that lets peasants till their own land and sell their harvests on the open market.

But the essential reforms--land redistribution--that occurred at the time of the revolution remained intact. Once freed from the collective, Chinese farmers prospered--quickly. Some centralized, communal aspects of the system remain and help Chinese peasants organize and coordinate efforts.

“China has made progress in areas where we have not,” M. S. Swaminathan, a renowned agronomist and an architect of India’s “green revolution” in agriculture, said in an interview at the Madras-based Swaminathan Research Foundation. “Because of the very possibility of social mobilization under a single political party, they have been able to get better control of water and pest management.

“The Chinese,” he said, “have an integrated approach to job creation between the farm and off-farm employment which we have not had in this country. The result in India has been the proliferation of urban slums as landless poor people migrate to the big cities of Bombay and Calcutta and Madras, living in utter squalor and deprivation.”

China’s population increase and agricultural modernization have also produced surplus labor. An estimated 80 million to 100 million people--the “floating population”--are internal migrants, manual laborers, construction workers and curbside vendors in the major cities. But several studies report that an additional 100 million of these people were absorbed by outlying “township enterprises” that India has never developed.

“The main reason that, economically speaking, China is doing so much better than India,” Mohanty said, “is the difference in the political systems that resulted from the kinds of revolutions the two countries went through. I think the Chinese were forced to face the challenge right from the beginning. From 1949 onward, they had to justify their revolution by providing some basic economic needs, partly because they were constantly under attack from the West.

“In India, we also had great values. But at the end of the freedom struggle, there were great compromises. . . . The basic needs of the people got postponed for the vast majority of people.”

In fits and starts in the past five years, India has begun to institute market liberalization and reforms that China began in the 1980s.

Now, many foreign business analysts are optimistic about India’s potential. “We basically advised our clients that they need to be [investing] in both China and India,” said Dominique Turcq, an analyst with McKinsey & Co. who directed a huge 1995 study comparing the “two giants of the 21st century.”

That study, the most exhaustive economic comparison of the two markets from an investment perspective, predicts that, “in the next decade, both India and China will see sustainable growth.”

Democracy Inhibits Growth

India’s vibrant democracy, Turcq said in an interview in Paris, where he is now based, in some ways inhibits the government’s ability to spur growth. A democratic government, for example, must pay closer attention to inflation and respond to “strong, established lobbies.”

But foreign investors who have worked in both places often find India’s civil society easier to understand and more dependable.

“Democracy puts limits on what you can do in brutalizing the economy,” Turcq said. “But it does give you more stability. India will probably never grow at 12% a year like China. But it will have stability.”

Other observers are not so sure. What the strictly business analyses of India fail to take into account, they say, are growing divisions among castes, religions and economic classes--the haves and the have-nots.

China’s ability to convert quickly to a market economy can be attributed in part to the country’s attention to the most basic social needs. So while Mao’s party may have been seeking to reach a perfect Communist state--by instituting universal education and public health care and improving the status of women--it also laid the groundwork for a market economy.

“The force of China’s market economy rests on the solid foundations of social changes that occurred earlier,” said economist Sen. “India cannot simply jump onto that bandwagon without paying attention to the enabling social changes--in education, health care and land reforms--that made the market function in the way it has in China.”

Meanwhile, a working measure of success for the two titans may lie in the question posed by former U.S. diplomat Jay Taylor in his 1987 book, “The Dragon and the Wild Goose,” which compares the nations: “Would you rather be the poorest man in China or in India?”

Rone Tempest, The Times’ Beijing Bureau chief since 1993 and New Delhi Bureau chief from 1984 to 1988, reported these stories in India and China.