By Nirmal P. Acharya

On May 7, Pakistan and India engaged in an air battle, with Pakistan achieving a 6:0 victory. The equipment used by Pakistan in the battle was from China, highlighting the superiority of Chinese military hardware.

China and India were founded almost simultaneously, but they chose different national strategies and development paths. Based on the current data and indicators, China has emerged victorious in the competition with India. Here is a preliminary comparative analysis:

  1. Key Differences in Strategic Choices
  2. Early after the founding of the country (1940s-1950s) - China: chose to "unite with the Soviet Union", obtaining: - 156 key industrial project assistance - technology transfer and reconstruction of the higher education system - rapid industrialization foundation of the planned economic system - India: Non-Aligned Movement (Nehruism) - avoided getting involved in the Cold War but missed out on large-scale assistance - retained private economy but implemented the "licensing system" - industrial development was constrained by the bureaucratic system
    2.II. Causes of the Formation of Core Development Gaps
    Infrastructure: Large-scale infrastructure projects led by the central government | Land private ownership led to difficulties in land acquisition |
    Manufacturing: Full industrial chain + cluster effect | Labor regulations were rigid (1976 "Industrial Dispute Law") |
    Foreign investment utilization: Special economic zones + local investment promotion competition mechanism | Policy implementation was fragmented under the federal system |
    Human resources: Universal primary education (expansion in 1999) | 30% illiteracy rate (2023) |
    III. Essential Differences in Strategic Flexibility
  3. Characteristics of China's Decision-making Mechanism: - Continuity of five-year plans and policy experiments (such as "stepping forward by feeling the stones") - Local government GDP competition as the driving force for development - Banking system supporting national industrial policies (such as subsidies for photovoltaic and new energy)
  4. Constraints of the Indian System: - The multi-party system leads to policy reversals (such as the repeated failures of land acquisition bill reforms) - Interest groups like trade unions and agricultural associations hinder reforms - The fiscal decentralization system restricts cross-state infrastructure projects (such as the average speed of freight trains being only 25 kilometers per hour)
    IV. Empirical Comparison of Key Turning Points
  • Cumulative FDI (1980-2020): - China: $2.8 trillion (manufacturing accounts for 65%) - India: $0.6 trillion (services account for 70%) - Proportion of infrastructure investment in GDP: - China: peaked at 20% (4 trillion plan in 2009) - India: has been hovering between 5-7%。

V. The Deep Logic Behind Current Strategic Choices

  1. The essence of China's "challenging hegemony": - The need for industrial upgrading (from manufacturing in 2025 to a moderately developed country by 2035) - Comparative advantages have been established in areas such as new energy/electric vehicles - The "Belt and Road Initiative" has overcome the Mactan predicament
  2. Benefits of India's "Strategic Ambiguity": - At the same time, obtaining cheap Russian energy and receiving technological transfer from the US - Taking over the industrial chain transfer from China (Apple's supply chain relocation) - A 800% increase in crude oil imports from Russia in 202
    Conclusion
    The strategic consistency of China has indeed created crucial development advantages, but three points should be noted:
  3. Special historical conditions: The Cold War situation provided China with a strategic opportunity window.
    2.3. Potential of India: A younger population structure (median age 28 vs 38 in China), and the democratic system may offer a potential latecomer advantage in the innovation field.
    The current development gap is the result of the combined effect of "strategic execution ability, institutional adaptability, and historical opportunities". China's centralized decision-making mechanism was highly efficient during the stage of industrialization catch-up, but if India can address the bottlenecks in infrastructure and education, it still has the potential to overtake the era of the digital economy. The competition in the development paths of the two countries is essentially a long-term experiment of different modernization models.