India Gains On China

While doubts about Chinese growth remain widespread, India's economy has charged ahead. Just about every major institution in the international realm has signaled that China may well fall short of its growth target - from the International Monetary Fund to the World Bank to the spokes people of world's largest financial firms, HSBC Nomura, and JP Morgan Chase. A very different and more positive story has emerged where India is concerned. India clearly has a long way to go to catch up to the overall size of China's economy, but the differential growth pictures surely must disconcert the people in Beijing's Forbidden City. It must chagrin Beijing especially that India's growth has come from the kind of infrastructure spending that once worked so well in China but seems not to work so well now. Spending on these, as China found out years ago and India enjoys now, offers huge economic returns in growth and living standards. As Indian development proceeds, such infrastructure efforts will have a less dramatic economic payoff, as China has discovered recently. India will become more of a presence and will make Beijing look back over its shoulder more than it does now, especially as China looks out into the Pacific and plots its economic, diplomatic, and military positioning against the United States.