WSJ has some stories which end up showing India in a positive light vis-a-vis China.
India, the Export Launching Pad: “India is angling to become a manufacturing-outsource center for everything from cars and car components to steel and petrochemicals…India’s big advantage, business executives here say, is an army of skilled engineers and designers capable of creating low-cost, high-end products not often found in manufacturing centers in China or Southeast Asia.”
Indian Stocks Have an Edge Over Their Chinese Cousins: “In a survey of 61 Chinese companies trading in Hong Kong and 69 Indian companies listed in Bombay, CLSA Emerging Markets concludes Indian companies enjoyed greater daily trading volume, offered a better return on equity and should have superior earnings growth during 2004. Indian companies also generally scored higher on CLSA’s corporate-governance ratings…The study, in effect, highlights the contrasting approaches of Beijing and New Delhi toward developing their economies and capital markets. Where China’s export-driven manufacturing growth has generated a rising tide of foreign investment in the country, India has been slower to open up. But it has done a better job of developing world-class companies.”
Surge in Lending In China Stokes Economic Worries: “there are signs that the world’s fastest-growing economy may be in danger of overheating. Pessimists point to overproduction in steel and a possible asset bubble developing in property. They worry that economic growth can’t be sustained at its current pace. What’s more, economists estimate that of China’s nearly $2 trillion in outstanding loans, between $500 billion and $750 billion aren’t expected to be repaid. Those amounts are in line with Japan’s bad-loan problem…For now, there is little danger that the economy or even the antiquated, state-run banking system will collapse. China’s banks remain government-owned and are backed by what amounts to a sovereign pledge to keep them afloat. Indeed, the banks have been carrying a huge load of bad loans for years, and have rarely experienced runs because of the country’s closed banking system and China’s traditionally trusting bank customers. In recent years, Beijing has been taking steps to overhaul the banks and reduce their bad debts, including setting up some companies to take over bad loans. Still, with many Chinese banks once again handing out loans rather indiscriminately, a new set of bad loans could emerge on their books, setting back China’s financial reforms. And their problems could become harder to fix as the country prepares to open its doors to foreign competition.”
Recently, Financial Times too had done a 3-part series on India and China. Reuben pointed out that Bloomberg has a story on the growing Indian auto sector.