In the early 1990s, the two most populous countries in the world started to open up to the outside world at about the same time. Even though both countries experienced fast growth and helped hundreds of millions of people escape poverty, when their currencies are adjusted for their actual purchasing power, China’s per capita income now exceeds India’s.
New Delhi and Beijing took completely different routes to globalization. One aimed to become the world’s factory, producing electronics and toys first, then semiconductors and electric vehicles. The other focused on services, such as software for computers. Their population structures were dissimilar, too. A one-child policy gave rise to a pronounced youth bulge and brought China to the brink of rich-country status before it started turning old. India’s demographic destiny is playing out now, though minus the jobs to absorb surplus farm labor. And then there are differences in political institutions.
China’s is a single-party state, while India is a messy, multiparty, electoral democracy. The different trajectories have their roots in history. China’s late-19th-century Qing dynasty rulers wanted manpower with vocational skills to handle military-related production. By contrast, India’s British colonial masters had little interest in creating a manufacturing base. So they seeded the education system with a bias for producing clerks and junior administrators.
Only the more affluent sections of the society had access to government jobs, and to the education required to land them. After independence in 1947, India doubled down on tertiary institutions, investing in elite colleges at the expense of basic reading and math skills.
India has had a preponderance of social-science graduates at the bachelor’s degree level. In China, however, the overrepresentation of humanities, law and business began to ebb as early as the 1930s as more undergraduates got trained as teachers, scientists, engineers, doctors and farming experts. “China’s higher share of engineering and vocational graduates, combined with a higher share of primary and secondary graduates, lends itself more readily to a focus on manufacturing.”
However, the traces of history are frequently difficult to ignore. India’s educational system still reflects the elite, top-down approach that the British introduced. In India, only 1 million people had not attended regular school; in China, 160 million people had not participated in adult education programs. It’s possible that the 159 million additional brains that China educated in reading and numeracy contributed significantly to India’s growth superiority.