Earlier this year I had argued that on balance, China was outperforming India on the world stage ("China leaves India in the dust," Jan. 27). While keeping costs as low and offering the lure of a market as big as India's, I argued, China has attained levels of infrastructure closer to those of Southeast Asia.
In the meantime, some of India's long-standing advantages over China are also eroding or becoming less relevant, including English-language competency, democracy and the rule of law. Decades of socialist dogma and policies have left India with a worse infrastructure, legacy and mindset than China. All this is reflected, I concluded, in the more than tenfold level of foreign investment in China compared to that in India.
I may have been prematurely harsh in my judgment of India. In an article in "Foreign Policy" (July/August 2003), Yasheng Huang, a Chinese scholar at the Sloan School of Management at the Massachusetts Institute of Technology, and Tarun Khanna, an Indian scholar at Harvard Business School, reached contrary conclusions. Interestingly enough, much of their case for muted caution on China and cautious optimism on India turns on a detailed analysis of the foreign investment figures and patterns in the two countries.