Why is China more developed than India despite having the world’s largest population?

Why is China more developed than India despite having the world’s largest population?

  • China is not a developed economy. In per capita income, China is at #67 behind Mexico, Romania and Malaysia. However, it is still a success story to learn from.
  • The two countries have roughly the same population, similar average unemployment rates and current GDP growth rates that are among the highest in the world. Yet China’s economy is almost five times larger than India’s. The GDP per capita for China and India in 1985 was approximately $293 per person.


  • The Chinese Communist Party (CCP) governs the country with few barriers. When the government decides on a course of action, few obstacles stand in its way. For example, China spent more than a decade building the Three Gorges Dam, the world’s largest hydropower project. The massive undertaking displaced more than 1.2 million people and flooded 13 cities, 140 towns and 1,350 villages. The dam, despite its enormous social and environmental cost, provides China with a source of clean energy and brought thousands of jobs to the Chinese interior.
  • India is a democracy. It has regional parliaments and a federal parliament with many assemblies. This system is all-inclusive, but a nightmare for development. It can take decades to make a decision.  For example, it took 16 years for the Indian parliament to pass a tax reform bill (2016). A project like damming the Yangtze River could not happen in India. Plagued by corruption at all levels, the divided political landscape would kill the project before it began.


  • Another component of China’s ascent is a massive urbanization. In 1969, 17.5% of the population in China lived in cities, compared to 19.5% in India. Today, the urbanization rate is 58% in China and roughly 37% in India.

♦Literacy rate

  • In 1982, the literacy rate in China was 64.4 per cent, compared to India’s 37. The average years of schooling in China was far higher than that in India then. In every measure, China was far better than India.
  • Today Chine Literacy rate 96.8% and India 70%.

♦Gender equality

  • Recent studies have ranked China at No.74 in terms of gender equality as against India’s 95 among 129 nations.

♦Other Facts

  • Opened their economy to the world years ahead of India. Just one example. Walmart entered China in 1996. In 2019, India is yet to allow Walmart and other major global retailers to operate inside India. Major sectors of India remained closed to outside competition.
  • Has 3x the land and far more resources of every kind — including water, coal, oil, rare metals etc. Land itself is a very important resource — look at how big a battle happens to get land for factories, roads or railways.
  • Adjacent to successful economies like Japan, Korea, Taiwan with a very active trade going on in the north Pacific. India’s neighborhood is bleak.
  • Has a better female participation in the economy due to a variety of factors. India lags behind in this substantially.
  • Invested more on human development ahead of India. Thus, China has better literacy, health, sanitation etc. compared to India.
  • Invested more on urban development and thus has a lot more cities. India has been very poor on this and its cities are collapsing under stress.


  • Some of the commentators Above mentioned the lack of property rights, communism or a lack of freedom of expression as positives. In fact, those are China’s weaknesses. Given all the strengths above, China could get close to a South Korea, Japan or Singapore if they had those positives. China succeeds despite communism — the ideals that push it to the bottom of the barrel until Deng partly reduced the suffocation.
  • We need to learn the right lessons from China, not the wrong ones.


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