Comments on: China or India? … And Follow Up Questions? http://calpolymbatrip.com/2007/china/china-or-india-and-follow-up-questions/ The MBA Graduate Program at Cal Poly Sat, 13 Mar 2010 20:08:46 +0000 http://wordpress.org/?v=2.6.3 By: Yuxiang Gao http://calpolymbatrip.com/2007/china/china-or-india-and-follow-up-questions/#comment-17732 Yuxiang Gao Mon, 08 Mar 2010 18:04:37 +0000 http://calpolymbatrip.com/2007/china/china-or-india-and-follow-up-questions/#comment-17732 China and India provide vast opportunities for trade and investments in all major sectors including information and communication technologies, energy, chemicals, natural resources, textiles, metals. Global companies can benefit from large and skilled, yet comparatively low-cost human resources for the entire spectrum of activities Further, doing business in China and India is not without risks. There are many challenges and risks spanning infrastructural, social, cultural, political, regulatory, intellectual property, and labor laws. As what Alex mentioned, the effectiveness of an authoritarian government is based on the ability of its leader(s). If an authoritarian government has good leadership, it can preform much more effectively than a capitalist democracy. I totally agree with this point. In addition, Authoritarian government is very helpful when facing some serious crisis. China and India provide vast opportunities for trade and investments in all major sectors including information and communication technologies, energy, chemicals, natural resources, textiles, metals.
Global companies can benefit from large and skilled, yet comparatively low-cost human resources for the entire spectrum of activities
Further, doing business in China and India is not without risks. There are many challenges and risks spanning infrastructural, social, cultural, political, regulatory, intellectual property, and labor laws.
As what Alex mentioned, the effectiveness of an authoritarian government is based on the ability of its leader(s). If an authoritarian government has good leadership, it can preform much more effectively than a capitalist democracy.
I totally agree with this point. In addition, Authoritarian government is very helpful when facing some serious crisis.

]]> By: Alex Thornton http://calpolymbatrip.com/2007/china/china-or-india-and-follow-up-questions/#comment-17229 Alex Thornton Sat, 12 Dec 2009 00:53:00 +0000 http://calpolymbatrip.com/2007/china/china-or-india-and-follow-up-questions/#comment-17229 The original PDF appears to be gone now. <a href="http://www.deloitte.com/assets/Dcom-BosniaHerzegovina/Local%20Assets/Documents/ba_ChinaIndiaRealityBeyondtheHype_082006.pdf" rel="nofollow">This appears to be the same document</a>. One major thing that I noticed is that you really have to look at the graphs in the PDF to get a feel for the past 300 years of economic history. For example, the chart entitled "Historical share of global GDP" Shows how the US went from 0% of global GDP to over 25% after WWII. Meanwhile, China and India went from nearly 25% each to less than 5% each. The section "Sources of Growth" debunks the idea that "China’s authoritarianism allows the government to make quick, unpopular decisions that are more difficult and time consuming in democratic India," by claiming that "many democracies have performed exceptionally well (Japan, Ireland) while many authoritarian countries have sunk into poverty and despair (Soviet Union, much of Africa and the Middle East)." The belief that democracies and capitalism are always better than authoritarian governments is a generalization. In fact, the effectiveness of an authoritarian governments is based on the ability of its leader(s). If an authoritarian government has good leadership, it can preform much more effectively than a capitalist democracy. The trouble, of course, occurs when the effective leaders are replaced by new ones. In a democracy, new leaders tend to be as effective as the previous ones and there is little or no bloodshed. In contrast, Authoritarian transitions of power tend to start civil wars and the new leaders are typically good at ceasing power, but not government administration. Though it is improbable that China has had high quality leadership continuously for 30 years now, it is by no means impossible. The original PDF appears to be gone now. This appears to be the same document.

One major thing that I noticed is that you really have to look at the graphs in the PDF to get a feel for the past 300 years of economic history. For example, the chart entitled “Historical share of global GDP” Shows how the US went from 0% of global GDP to over 25% after WWII. Meanwhile, China and India went from nearly 25% each to less than 5% each.

The section “Sources of Growth” debunks the idea that “China’s authoritarianism allows the government to make quick, unpopular decisions that are more difficult and time consuming in democratic India,” by claiming that “many democracies have performed exceptionally well (Japan, Ireland) while many authoritarian countries have sunk into poverty and despair (Soviet Union, much of Africa and the Middle East).”

The belief that democracies and capitalism are always better than authoritarian governments is a generalization. In fact, the effectiveness of an authoritarian governments is based on the ability of its leader(s). If an authoritarian government has good leadership, it can preform much more effectively than a capitalist democracy.

The trouble, of course, occurs when the effective leaders are replaced by new ones. In a democracy, new leaders tend to be as effective as the previous ones and there is little or no bloodshed. In contrast, Authoritarian transitions of power tend to start civil wars and the new leaders are typically good at ceasing power, but not government administration.

Though it is improbable that China has had high quality leadership continuously for 30 years now, it is by no means impossible.

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