The political transition in China provides a good opportunity to ask a simple question: How far ahead of India has China moved?
One way to measure the gap between the two Asian giants is by looking at various indicators of economic and social development — and then to see how many years ago did China cross the levels that India currently is at. I have used data from the World Bank for this exercise.
The results are telling: India is about 10 years behind China as far as economic development goes and between 15 and 30 years behind if we consider social development.
Take a look at the economic data first. The current size of the Indian economy is around $1.8 trillion at market exchange rates. The Chinese economy was of that size in 2002. Or consider average incomes using purchasing power parity. Chinese average incomes in 2004 were at around the level that Indian average incomes are at now ($3,620).
The gap is narrower if one considers output per worker. The average Indian worker produces $8,401 of output a year, measured in 1990 dollars. China was at that level in 2006, not too long ago. The reason why the gap in terms of output per worker is less than that of average incomes is because China has a greater proportion of its population (especially women) in the labour force. The Indian labour participation rate is 56% versus 74% in the case of China.
The fact that the economic gap between China and India is around 10 years is also evident when consumption of products such as telecom services and automobiles is considered. There is almost no difference between the two countries as far as mobile subscribers per 1,000 people is considered but the gap is around eight years when one considers passenger cars; India currently has 12 cars per 1,000 people, a level that China crossed in 2004.
Even the poverty headcount ratio — or the proportion of people living on less than $1.25 a day — in China in 2002 was around what it is in India today (32.7%).
However, the gap between the two Asian giants is much wider when indicators of social development are considered. The proportion of Indians living in cities in 2011 (31%) was matched by China in 1995. The gap is similar when one considers access to improved sanitation. China is around 17 years ahead of India. It crossed India’s current rate of child mortality sometime before 1980 as it also did with energy use per capita.
The picture that then emerges is that while India is not as far behind China in terms of income levels as is commonly believed, there is a gaping chasm when indicators of social development are considered.