So tell me, just what is so effing special about China?
You know what I don't get? All the focus on China and its "miracle economy" and its "booming stock-market". As an Indian, it's enough to give you a massive inferiority complex. Why oh why can't the Sensex match China's impressive performance, we lament. Then we actually go beyond the news media's infatuation with China to uncover the facts.
Both the Bombay Stock Exchange Sensex and the Shanghai Composite Index, China's flagship index, peaked early this year before dropping precipitously. In fact, the value of the Sensex has dropped about 30% from January 1, 2008. Before we consider this the end of India's economic progress, take note of this, by comparison, the Shanghai Composite has fallen by more than 60%.
OK, you might say, but in its boom years, China's stock market surely must have run laps around India's, right? Over the last 5 years, the Shanghai Composite has increased in value by roughly 50% while the Sensex is about 225% higher than where it was five years ago.
And if you look at the last 11 years, the Sensex has climbed at almost three times the rate of the Shanghai Composite (note the colors are switched below from above).
So when you look at a stock market that has drastically underperformed compared to its neighbor and an economy that is entirely focused on manufacturing cheap, low-quality, unimaginate products that occasionally poison dogs and babies, just what is so effing special about China?
While China may always be able to fill the shelves at Wal-Mart or deliver cars which are carbon copies of western makes (the copying is so blatant that the doors of the Chery QQ and the Chevy Spark are interchangeable), it does not seem capable of generating the innovative spirit that results in America's position today as the undisputed global superpower, Japan's dominance of electronics and automotive sectors or the feat of India's Tata Motors in revolutionizing the global auto industry by coming up with a "people's car" for hundreds of millions around the developing world.
There are signs everywhere that Indians are ditching their inferiority complex, which has spilled over from the British Raj, but it's a process that could, and should, happen faster.
Both the Bombay Stock Exchange Sensex and the Shanghai Composite Index, China's flagship index, peaked early this year before dropping precipitously. In fact, the value of the Sensex has dropped about 30% from January 1, 2008. Before we consider this the end of India's economic progress, take note of this, by comparison, the Shanghai Composite has fallen by more than 60%.
OK, you might say, but in its boom years, China's stock market surely must have run laps around India's, right? Over the last 5 years, the Shanghai Composite has increased in value by roughly 50% while the Sensex is about 225% higher than where it was five years ago.
And if you look at the last 11 years, the Sensex has climbed at almost three times the rate of the Shanghai Composite (note the colors are switched below from above).
So when you look at a stock market that has drastically underperformed compared to its neighbor and an economy that is entirely focused on manufacturing cheap, low-quality, unimaginate products that occasionally poison dogs and babies, just what is so effing special about China?
While China may always be able to fill the shelves at Wal-Mart or deliver cars which are carbon copies of western makes (the copying is so blatant that the doors of the Chery QQ and the Chevy Spark are interchangeable), it does not seem capable of generating the innovative spirit that results in America's position today as the undisputed global superpower, Japan's dominance of electronics and automotive sectors or the feat of India's Tata Motors in revolutionizing the global auto industry by coming up with a "people's car" for hundreds of millions around the developing world.
There are signs everywhere that Indians are ditching their inferiority complex, which has spilled over from the British Raj, but it's a process that could, and should, happen faster.
posted by Vivek at 8:43 PM
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