Monday, May 21, 2012

Investment News and Commentary from Emerging Markets in Asia - China, India and ASEAN





About 2point6billion.com

2point6billion.com discusses investment news and events from the emerging markets of Asia - including India, China and the ASEAN countries. It is produced by the Asian foreign direct business advisors at Dezan Shira & Associates from their offices across emerging Asia.




India Empowers 700 million People, China Looks On

May 5 – One of the fundamental differences between India and China is the democratic process of government. It’s a curious subject to delve into: Indian politicians look on with envious eyes at China’s one party state and their ability to push through legislation they need with relative ease, while the Chinese look upon India’s democratic process with amusement and assume it contributes to the often chaotic nature of running the nation. If ever a case could be made for not being democratic, many Chinese say, just take a look at India.

The sheer logistics of having an election in India are staggering, and one also wonders how on earth the Chinese would be able to cope. Over 700 million people are able to vote, and India has a consistent national turn out rate of about 65 percent, although there are regional differences. Assam posts an average 72 percent turnover, while curiously in Mumbai; voter turnout in the current elections appears to have dipped below 50 percent for the first time. Nonetheless, with voting being carried out in 35 states, similar to the number of provinces and autonomous regions under the administration of the Peoples Republic of China, Chinese interest in the electioneering process is being piqued. The NDRC has a unit specifically devoted to studying the effects of democracy on China, including the designing of models to gauge the impact of elections being held throughout its own territory. Implementation may be years away, but the Indian management of the process is under review.

The democratic process in India undoubtedly works. While naysayers point to a system that has led to coalition governments in India in every election since 1990, and minority parties since then being able to hold majority voters to task, the system has worked. India has, despite the difficulties in dealing with internal coalition politics and the need to satisfy a myriad of requests, been able to press on. A near revolution has occurred in terms of economic and financial reform, and millions have been lifted out of poverty. GDP growth averaging at 7 percent to 8 percent for the past decade has fueled a boom, despite the problems of Indian politics seemingly getting in the way of progress. The general feeling in India is that while China has leapt ahead, and its one party state system has been of benefit to them during this period, India will catch up, sooner or later.

Quite how China views this is a bit of an enigma. While the one party state may be great to pass regulatory reform without opposition from the masses, it causes other problems, especially with social unrest issues. Democracy is being viewed positively in certain quarters in China as a necessary vehicle through which people can let off steam, without having to so directly point at a specific government’s shortcomings. It is this issue that is of intellectual interest to China’s leaders. Quite how its citizens feel though remains a mixed bag. New feelings of patriotism lead many, while the going is good, to stand right behind the one party system and show little concern for smaller problems. It is these same people who are also able to be educated overseas, hold down high paying jobs, and generally benefit from China’s economic growth. They represent the elite. They don’t necessarily represent the masses, most of who have not acquired the same level of confidence their wealthier contemporaries may be able too. The danger for China is that the elite continue to view democracy as a failed system in India, while being able to perversely hold all the trappings of being able to travel overseas. It’s the Chinese peasants, dealing with government corruption, who would be far more expressive given the chance, and this is how it works in India – the mass vote is rural.

Comparisons between political systems, and democracy and the one party state are therefore somewhat superfluous. One system controls its population; the other takes its mandate from the people. Given the choice, Indians outwardly reject any notion of dispensing with their cherished, chaotic, and occasionally disruptive democratic process. China’s position, ultimately, is not as mature. Neither can its intellectual, economic or social development ultimately be so until the government eventually solves this primary issue.

Further Reading
Indian Election Numbers

This entry was posted in Politics. Bookmark the permalink.

Comments are closed.



Dezan Shira & Associates provide a range of services for companies looking to undertake foreign direct investment into Asia, These include corporate establishment, accounting, tax, payroll, audit and due diligence. To learn more about the firm, please contact one of our specialists at china@dezshira.com, download our corporate brochure or visit at us www.dezshira.com


Dezan Shira & Associates, Twenty years of Excellence

The Asia Briefing Bookstore

Our best selling legal, financial, tax and regional guides to Asia business, industry reports and more…
Click here to view all titles now

China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store China Briefing Book Store

NOW AVAILABLE IN PDF