Comparing India and China’s Potential for Economic Growth

December 30, 2011

The cover for The Economist of October 2 – 8, 2010, placed a bet on India in an economic race with China.

The Economist wants India to win this race, because India is a democracy as is the U.S., but what isn’t mentioned is that China is evolving into a republic closer to the original republic that the United States was in 1776 with a Chinese twist, which is what Dr. Sun Yat-sen wanted.

Some claim China is ruled be a dictator today but that is not true. China is a republic that is guided by the word of law, which is the essence of a Republic.  In 1982, China wrote a new Constitution that spelled out the law and China’s schoolchildren are taught what these laws mean and how to live with them. However, the Chinese Constitution is not the same as the one in the US, so the laws are different.

I opened The Economist magazine and read the two pieces the cover was about. One was India’s surprising economic miracle and the second piece was A bumpier but freer road.

On page 11, I read, “many observers think China has done a better job than India of curbing corruption…”

On page 77, a Western banker was quoted saying, “It’s much easier to deal with the well-understood ‘organization chart’ of China Inc than the freewheeling chaos of India.”

Corruption exists in every country and Transparency International attempts to define and identify what global corruption looks like. Comparing China and India, we discover that while India’s corruption appears to be getting worse, corruption in China is improving due to the evolution of its new legal system.

In fact, in the past 3 years, the perception of corruption in India was 74%, [in the United States that perception was 72%], while in China it was only 46%.

In addition, the BBC reported recently, “Widespread corruption in India costs billions of dollars and threatens to derail the country’s growth…”

After I read both pieces in The Economist comparing China with India, it was obvious that India would never beat China economically without controlling its corruption, shrinking severe poverty and increasing literacy. Overall, the latest World Bank data shows that India’s poverty rate is 27.5% [330 million people], based on India’s current poverty line of $1.03 per person per day and an illiteracy rate of almost 26% [312 million people].

In comparison, literacy in China is more than 94% and the World Bank says in 2004, people in China living in poverty represented 2.8% of the population.

There are more reasons The Economist is wrong about India winning this economic race just because it is a democracy. One reason is that America’s Founding Fathers hated democracy and had a good reason.

Live Journal goes into detail on this topic. Live Journal says, “It would be an understatement to say that the (U.S.) Founding Fathers hated democracy. They warned against it vehemently and relentlessly. They equated it–properly–with mob rule.”


The Founders of the US, who hated democracy, built a free country [a republic]. Our [meaning many Americans] ignorance of history, which has led to a love of democracy, is causing the US to surrender its freedoms at an alarming rate.

Dr. Sun Yat-sen (1866 – 1925), known as the father of modern China [by both China and Taiwan], said he wanted to model China’s government after America but by combining Western thought with Chinese tradition.

When he said this, it was 1910, and America, by definition, was still a republic. Once you read the two pieces in The Economist, you may understand why India’s democracy cannot beat China’s growing republic.


Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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 This revised and edited post first appeared October 13, 2010.

The Danger of False Truths – Part 2/3

July 22, 2011

My “old” friend said, “It isn’t the fact that China has crooks, every nation has them. However, the degree of corruption in China is simply breathtaking. But not unexpected due to the fact it’s an oligarchy with strict censorship of anything deemed inappropriate by the ones who are the most open to corruption.”

My reply was to refer him to Transparency International, which identifies itself as the global coalition against corruption. The results are worth reading and provide compelling evidence that my “old” friend may be wrong since many democracies, according to Transparency International, are more corrupt than China.

Transparency International’s 2010 Corruption Perceptions Index shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 10 (highly clean) to 0 (highly corrupt).”

Of 178 countries ranked for corruption, China tied with seven for a rank of 78 and a score of 3.5.  The countries China tied with were Colombia, Greece, Lesotho, Peru, Serbia and Thailand.

If you check the list of Electoral Democracies, you will discover that Greece, Peru, and Serbia are on it and many other electoral democracies have a lower rank than China.

For example, Argentina is ranked 105 with a score of 2.9.

India, often touted as the world’s largest democracy, is ranked 87th with a score of 3.3 and is home to a third of the world’s people that live in severe poverty.

In fact, according to Economy Watch, India’s underground economic corruption is believed to be 50% of the country’s GDP or $640 billion US dollars at the end of 2008.

Mexico is ranked 98 with a score of 3.1.

The Ukraine is ranked 134 with a score of 2.4.

The most telling evidence is Singapore, which did not make the Electoral Democracy list. However, Singapore shares 1st place with Denmark and New Zealand as the three countries with the least corruption in the world.

Qatar was ranked 19th and is an Emirate, which is similar to a monarchy or sultanate, but a government in which the supreme power is in the hands of an emir (the ruler of a Muslim state).

The US rank was 22 with a score of 7.1, which is a C- (good but not perfect).

The reason those 16,000 to 18,000 Chinese crooks fled China for mostly the US was because if caught, they would probably be executed.

In the US, all these crooks have to do is pay taxes then reap the rewards of their corruption in a land where more people go to prison than any country on earth. After all, Bonnie and Clyde are folk heroes in the US with a Hollywood movie.

Continued on July 23, 2011 in The Danger of False Truths – Part 3 or return to Part 1


Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

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