The GDP in China was only the 2/3 of the GDP in India in 1978, but now it is 70%~80% higher than India, so many people say China makes magic economy, but India doesn’t. But the others adopt opposite opinion.
1. Comparing the two countries, it is not correct only consider the economic development in the past ten years or twenty years. In fact, according to the effect on the society and economy from financial development, India has more potential developing space than China. The economical development in China during the last ten years are mainly depends on the cheap labor force. They provide manufacturing industry and related service to other countries, like making shoes, clothes, toys and so on. So the profit is limited. So China should improve its technology power as well as its Service Industry to get more profit, otherwise, it is not easy for China to surpasses India.
2. Finance and securities industry in India is more developed than it in China and the economic system in India provides more chances to entrepreneur. In China, 99% young people work for others. But the situation in India is much better. So how to improve Finance and securities industry is very crucial for China at this moment.
3. Global capital is flow direct to India actively. In today’s global economic situation, cheap labor is not so competitive. The country’s system is the key factor. Other countries think India has more free system, which is free on news, laws and more democratic. So they are more likely to invest in India than in China.
In fact, as I know, China has improved a lot on economy and technology. More and more foreigners know China and would like to invest in China after the Olympic Games and world expo.