China, India face similar challenges but China races ahead: report

Wednesday, 09 July 2003, 19:30 IST
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NEW DELHI: China and India -- both vast countries with huge populations, together bearing the burden of a third of the world's population and sharing some common features. So how come China is progressing much faster than India? According to the U.N. Development Programme (UNDP)'s Human Development Report released worldwide, China took an early lead in market reforms and spends much more than India has ever done on health and education. The report said China enjoyed the fastest sustained economic advance in human history, averaging real per capita growth of eight percent a year over the past decade. Its per capita income was now $3,976 in terms of purchasing power parity. In India, however, the real per capita income grew at a modest average of 4.4 percent, reaching $2,358 in 2001. The proportion of people living on less than $1 a day declined in China from 33 percent in 1990 to 16 percent in 2000, and in India from 42 percent in 1993-94 to 35 percent in 2001. The UNDP report said: "China's exceptional growth was explained partly by its market based reforms that started in 1978, well before India's similar reforms began in 1991." China had been able to integrate with the global economy at a "phenomenal" pace and today was the largest recipient of foreign direct investment among developing countries, with the annual investment rising from almost zero in 1978 to about $52 billion in 2002. In India, foreign direct investment has increased but at much lower levels, from $129 million in 1991 to $4 billion in 2002. China also enjoyed much more success in export growths. The report noted: "China's exports reached $320 billion in 2001, compared to India's $35 billion. China has had particular success in moving from labour intensive to technology intensive exports." China also boasted of more social investments than India. In China, public spending on education is 2.3 percent of the gross domestic product and on health is 2.1 percent. The result has been that the literacy is 84 percent, infant mortality is 32 per 1,000 live births and under-five mortality is 40 per 1,000 live births. India, however, had traditional lower spending on health and education. Health spending was 1.3 percent of the gross domestic product and education expenditure 3.2 percent (against 0.8 percent in 1950). The human development indicators for India also remained much lower than that for China. Literacy was 65 percent, infant mortality 68 per 1,000 live births and under-five mortality was 96 per 1,000 live births. But both China and India faced common challenges such as the spread of HIV/AIDS and other sexually transmitted diseases due to increased labour migration and international trade. And both faced the challenge of fostering a knowledge-based economic growth as average skill levels increased.
Source: IANS
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