When it comes to an India-China relationship, one would be hard pushed to find two better investments in the future than in China. China’s economy will continue to grow at a pace that most global investors will be unable to fathom. Not only is the Chinese market growing but so too is the global economy and with the US economy not looking so hot, now may be the time to invest in China and India. At the end of the day for any investor in this country has two distinct advantages over any other potential investment. Lets take a look at these two economies and analyze how they are competing with each other.
First, on the economic front India is a much safer investment than China. There is less likelihood of a country like China opening up a big economic zone like what India is doing with its neighboring country Pakistan. India is an economic basket case right now and recovering from the recent economic turmoil they’ve just endured. On the other hand China’s economy looks stronger than ever and their government has just announced an economic stimulus plan that could propel their economy far into the future. So, if you wanted to invest in the fastest growing economy in Asia then you would probably want to look elsewhere.
Second, when it comes to a business sense there are two countries that are clear front runners when it comes to being the top investment destination. China and India both have strong entrepreneurial cultures and enormous amounts of experience when it comes to producing and marketing goods and services. In fact, according to the World Economic Forum (WFE) China is the largest manufacturer of consumer goods in the world and India is the fourth largest.
India, on the other hand, has recently experienced economic growth but it still lags behind China when it comes to innovation and technology. The two countries also compete for the attention of global capital as well. So, while China may seem like the clear economic champion when it comes to an investment in these two countries the truth is more complicated. If you were looking to invest in India you would be looking at two countries with strong economies but one has a much longer economic development than the other.
However, that being said one could make an argument that the two countries are so similar that it really comes down to the quality of life in each country. In China you get a clean environment, great healthcare and a moderate tax burden. While India has relatively high levels of corruption and has some of the worst infrastructure in Asia. That said, India still trounce China when it comes to basic living standards.
Finally, when you invest in China or India the question you should ask yourself is what is the return on my investment. This is an important consideration because it will determine whether or not your investment will become a solid investment for the long term. In most cases the answer is that it depends on the type of investment you are looking to make. India may be a cheap developing country but they have been developing for decades so while they may become the powerhouse of Asian economic growth in the next few years it is highly doubtful that they will be able to sustain such a rapid rate of development without outside help.