What India Can Learn from China and Vice Versa

A partial convergence of the Indian and Chinese growth models is likely. Judging from China's experience, sustaining India's impressive economic performance of recent years will require a significant further opening of its economy (externally and internally), higher savings and investments, especially in physical infrastructure and social services, and stronger labor absorption in the modern sectors. The base of India's current economic boom - software, IT-related services and high-end manufacturing - is narrow compared to China's. Poor performance in agriculture is responsible for still significant poverty in many parts of rural India. Bilateral India-China ties, including trade and investment, are increasing rapidly and could help to bring about the structural economic changes India needs. Through its exports to China, India is becoming linked to global supply chains centered on China. The notion that India-China relations are, or are bound to become, fundamentally antagonistic, held by many in the USA, is mistaken and potentially dangerous.