China will be fine, until one day it isn't

Getting on a plane recently, I passed an Indian and a Chinese man sitting together at the front of business class. It would have made a good picture, as they were both intently reading their copies of The Economist, the recent edition comparing India's tiger to China's dragon. Which will win?

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A visit to Delhi and Darjeeling did nothing to settle the argument in India's favour. Compared to other parts of the world, India seems to have made little visible progress.

Take Brazil, a country I visited recently after a 10-year absence. The difference was staggering. The infrastructure has improved, communications are first-rate and the restaurants are world-class.

Little seems to have changed since I last drove through the plains to Darjeeling 16 years ago, except the roads are even more choked. In a 10-mile stretch we saw the following: a naked Jain; a lorry overturned; a cow sitting in the middle of the Grand Trunk Road; a leper lying at the side of the road, flies chewing his hands; and 16 people crammed into a tuk-tuk, with children sitting on the roof.

Is this an economic superpower in the making? Much of India's growth over the past 10 years has come from technology. Next year, apparently, the sector will employ more people than the manufacturing sector.

But I found it difficult to get a phone signal and wireless was nearly nonexistent. I am still receiving emails five days later.

A know-all Canadian diplomat told me in no uncertain terms there was no contest. He had lived in China, so he knew. "China will win," he said. "They have US$3 trillion (Dh11.02tn) in foreign exchange reserves. They are organised. They are determined. And they don't care about democracy, which makes everything so much easier."

As well as being a bore to sit next to, the Canadian is a poor student of history. It is precisely when a country or economy appears inviolable that it falls.

More than $3tn in foreign exchange is worthless if it costs you $4tn to clean up your country when you've poisoned the rivers and cut down all the trees. China has its own municipal debt problems, and a new workforce of some 65 million every year seeking jobs for the first time.

If there's no money and no votes, why would everybody sit at home and pretend everything's fine?

It would have been tempting after the fall of the Berlin Wall to think that America had won. Francis Fukuyama and PJ O'Rourke did just that. But the constant flow of history threatens to overwhelm us all, particularly the most successful. Even Germany is finally coming under pressure in the bond markets, which is about time, frankly.

India certainly isn't the easiest place to get around; some of its business people sail very close to the wind. But the place has a dynamism and a way of coping with organised chaos.

Authoritarian states are fine until they lose their authority. China will be fine, until one day it isn't. Think of the tortoise and the hare.

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