When India put a cut-price satellite in orbit around Mars last September, one media company could not resist a comparison with China. Although the “Indian elephant” was losing to the “Chinese dragon” in most other respects, NDTV’s website said, at least Delhi was beating Beijing in the race to the red planet.
Meanwhile, back on planet earth, India may be about to steal another march on China. After years of peering over the Himalayas in awe at China’s superior growth rates, there is now a realistic prospect of India overtaking China on that measure too. The switch could happen as early as next year. That would make India the world’s fastest-growing large economy, finally thrusting it into the limelight after decades in China’s shadow. It might even bring democracy back into fashion. Delhi consensus anyone?
The idea is not as outrageous as it sounds. For years, we had been used to China growing at double-digit rates. Now it is slowing. China’s labour force is shrinking and manufacturing is losing its power. More fundamentally, Chinese leaders recognise the need to change a model that relies too heavily on credit and energy inputs. China’s growth has already dropped to below 7.5 per cent. Before long, Beijing will probably allow it to settle down somewhere in the 6-7 per cent range. It would certainly take that option over a crisis, which could temporarily send growth much lower.