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International Socialist Review, Summer 1960

Daniel Roberts

India and China – A Contrast

From International Socialist Review, Vol.21 No.3, Summer 1960, pp.82-85.
Transcription & mark-up by Einde O’Callaghan for ETOL.

* * *

EVER since the end of the second world war, hundreds of millions of people – first in Asia, then the Mideast, sub-Sahara Africa and Latin America – have fought to end their colonial or semi-colonial bondage. They have struggled for national independence and against tyrannical puppet regimes of the West as the means of realizing a broader set of aims – namely, industrial development, an end to murderous exploitation, and participation with the rest of mankind in the forward march to abundance, freedom, security and human dignity.

Two former colonial countries in particular have commanded the attention of the Asian, African and Latin American peoples. These are China and India. They were the first in the postwar period to throw off the imperialist yoke and to gain more than nominal national independence. They are the biggest countries by population, not only in the economically underdeveloped areas, but in the entire world. In fact, they have nearly one half of the world’s population between them. Both have undertaken economic-growth plans and have registered undeniable economic successes. Yet they pursue totally different “roads” to economic and social progress. And it is these contrasting “roads” and contrasting achievements that are being carefully studied throughout the entire colonial world.

To enhance the current contrasts, the two countries prior to India’s attainment of independence in 1947 and China’s overthrow of the Chiang Kai-shek regime in 1949, resembled each other in many essential features. Semi-feudal relations prevailed on the land in both of these primarily agricultural countries. They lacked national unity. They were ruthlessly exploited by foreign capital. Illiteracy, religious superstition, disease, and natural disasters plagued the atomized populations.

The war had brought about a differentiation between India and China as far as industrial development was concerned. It plunged China into chaos but spurred the growth of industry in India.

Here is how Wilfred Malenbaum, an American economist who has specialized in comparing Indian and Chinese developments, summed up the standing of the two countries in 1952 after China had already substantially recovered from wartime devastation. [1] Per capita agricultural product was about 15 per cent higher in China than in India, he says. For the rest of the economy, however, output was higher in India that year. In heavy industry, India was ahead by at least a 20 per cent margin. Quantitatively, non-agricultural output might have been 10 per cent higher in India.
 

HOW did the countries fare in the competition in the subsequent years? During India’s first five-year plan, 1951-56, the national product grew by 19 per cent, whereas Chinese output increased by 51 per cent during the first plan period, 1953-57. In total industrial production, China jumped from index 100 in 1952 to index 244 in 1957, while India rose from 100 in 1952 to 133 in 1957.

Again, says Malenbaum, gross investment ratios – calculated as the percentage of investment to gross national product – were close to the same levels in the two countries in 1950. Thereafter, the investment ratio increased three times faster in China than in India. As a result, the real level of gross investment in China in 1957-58 was about five times as high as it had been in 1950. In India it was not quite twice the level of 1950. Furthermore, China financed a greater proportion of its investment from domestic savings on current income and achieved some balance in its foreign trade. India, on the other hand, had a foreign-trade deficit and used, up about 60 per cent of its foreign-exchange reserves.

Per capita income was of essentially the same order of magnitude in the two countries in 1950 – about 260 rupees or 130 yuan. In that year, China was investing about 50 per cent more than India out of essentially the same real product. It appears, says Malenbaum, that the average level of household consumption in China was 10 to 15 per cent below that in India, but judging from the overall data, “... this situation changed rapidly. Sometime in 1955 or 1956 – despite China’s larger allocations to investment and to other governmental uses, and despite its more rapid rate of population growth – the per capita levels of household consumption began to forge ahead of the levels prevailing in India.” If we contrast the Indian and Chinese performances in detail, we get the following set of figures:

In the field of education and development of professional training, India also began with a definite lead, which China is reducing where it hasn’t actually forged ahead.

Here are the figures cited by Malenbaum:

In 1955, China was training annually 30.9 engineers and 11.2 medical doctors per million persons in its population. The comparable figures for India were 18.4 and 8.1.

In agriculture, Malenbaum lists the following performances:

From 1950 to 1957, says Malenbaum, aggregate output in agriculture rose by some 25 to 30 per cent in China and 15 to 20 per cent in India. The agricultural product increased at a lower rate in China than the overall national product. In India, the agricultural output and the output of the rest of the economy kept in line.

In both countries, agricultural output was seriously influenced by weather conditions. Malenbaum believes that, of India’s gains scored during the first plan period, perhaps 50 per cent are attributable to additional acreage put in cultivation, mostly the result of expansion in the area irrigated. However, he says there is no evidence that the upward trend has been resumed since that time. Weather conditions alone seem to account for fluctuations thereafter.

In China, of the estimated 20 per cent expansion during the first five-year plan period about 75 per cent represents increases in per acre yields. “Systematic change – the persistent growth in output, however small, and the consistency of the contributory factors – probably constitutes the most significant aspect of Chinese development in this area.”

Though according to Malenbaum the record is not definitive whether China’s persistent trend upwards measures success in overcoming “natural and human deterrents” to expanding production, it is notable that “Even in adverse-weather years, the Chinese did succeed in expanding grain output by about as much as population.”

But, whereas it appears reasonably sure that China is making slow but persistent headway in increasing agricultural output thanks to government-directed irrigation works and massive fertilizer-collection drives, Indian leadership, over the past two years, “has increasingly questioned whether a basis for systematic expansion of food grain output has in fact been established in India.”
 

THUS in agriculture as in industry, the Chinese performance excels the Indian by a considerable margin. Malenbaum’s overall judgment is as follows: “The present analysis ... indicates economic developments overwhelmingly favorable to the Chinese effort, both with respect to actual performance and to potential for further growth.”

Can the differences in performance be ascribed to China’s receiving a greater amount of aid from the Soviet Union than India gets from the West? China has paid the USSR at full Soviet prices for all machinery and technical aid, except for what it received under two low-interest, long-term Soviet loans during the first plan. But these loans amounted to no more than 3 per cent of the total Chinese investment. [2] The Indians, on the other hand, have had access to the world markel from which the Chinese have been barred by a US-inspired blockade. Therefore, if China has acquired more foreign-made plants and equipment than India, this too reflects the greater effort of the Chinese in mobilizing national resources.
 

CAN the differences of performance then be explained by advantages in mobilizing manpower and resources that a totalitarian government supposedly has over a democratic one? It is true that a Stalinist-type dictatorship runs China today. But India is hardly a democracy. Behind the parliamentary facade a small clique of capitalists run the country in the interests of the propertied classes and at the expense of the working people. The Indian government has never hesitated to invoke “emergency rule” to cope with strikes or mass demonstrations. Last year the Calcutta police fired on crowds protesting famine conditions, killing twenty people.

Landlords still boss the rural areas, despite agrarian reform laws, whose enforcement is often in the hands of officials tied to the landlord class. The caste system, too, retains a strong hold, though it has also been reformed on paper. The truth is that despite the various laws passed in India since independence, the country has not yet undergone a democratic revolution to extirpate root and branch the remnants of feudal and other archaic social relations.

Furthermore if “totalitarianism” has the magic power to bring about rapid economic development, how did it happen that all of Asia stagnated for millennia under despotism. Why weren’t the tyrannical governments of Chiang Kai-shek and of the British Raj able to secure economic growth, And why haven’t the American-backed puppet dictators in Southeast Asia carried through the economic transformation of their countries? Obviously, something other than totalitarianism is needed to bring about swift economic progress.

Actually, Stalinist-type rule in China has not spurred Chinese development but has proved an obstacle to it. Because they often disregard the needs and the consciousness of the masses, the Stalinist leaders have periodically imposed policies that disrupt the economic plan and throw production out of gear. A democratic regime of workers and peasants would eliminate bureaucratic mismanagement and waste and would thus insure an even better rate of growth than China has demonstrated during the last ten years. Indeed, within the Chinese CP, voices have been raised advocating that the mass of toilers be given a genuine voice in shaping the economic course, so as to bring the plans into line with what is most realistic.
 

IT is noteworthy that Malenbaum, whose comparisons of the Indian and Chinese performances we have cited, does not believe that the issue of “democracy” versus “totalitarianisms” is integral to the problem.

“Through a sequence of devices, culminating in today’s communes,” he writes, “China’s government has played a fundamental role in organizing local resources – labor, existing plant, raw materials, savings (especially non-monetized) and leadership of both enterprise and public administration – to expand agricultural and industrial product.”

On the other hand “Indian leadership has not yet assumed the responsibilities for organization and planning required to meet these problems.”

He concludes:

“... the lesson to be derived from the comparative performance of the two countries over these years of intensive development planning is not that totalitarian methods serve better than those conceived and implemented under democracy. It is rather that government in nations aspiring to economic expansion needs to define the tasks of growth realistically; more government must implement them faithfully.”

Malenbaum takes us closer to the heart of the problem. The Chinese government shapes an overall economic plan and implements it energetically in all of its branches. A democratic government might act in this fashion as well as a totalitarian one. The trouble with the Indian government is that it hardly acts in this manner at all.

But what accounts for these differences in the way the government directs the economy? An important clue will be found, I believe, in the outlook of India’s ruling Congress party – a capitalist party with a pseudo-socialist program – toward the relationship of planning to social change. It is stated by a leading Indian economist, H. Venkatasubbiah, a supporter of the Nehru regime, in the following terms:

“The legacy of the socio-economic situation in a poor country is complex and any study of its arrested progress or socio-economic immobility would not be complete without examining sociological factors like religious attitudes, social stratification, law and convention regarding property, level of scientific and technical knowledge, and the traditional role of the state and the ruling class. All these variables together go to form the mould in which all events are shaped: each factor has a dynamic of its own and affects others intimately. Change therefore, means a change in the whole pattern; the mould in which events are cast itself has to be changed. This, historically speaking, takes place all the time. But planning means an accelerated change in selected sectors and the change differs from the rhythm of historical growth in its impact and intensity, and while discussing planning in this sense should be mentioned aspects of the economic matrix which have retarded growth.” [3]

Venkatasubbiah then cites poverty “both in the sense of an insufficiency of economic goods and of the capacity to produce them in progressively larger and more various quantities” as the principal factor that has retarded growth. Let planned industrial development but overcome this, is his argument in effect, and the whole of society will be gradually revolutionized. Thus the “Indian road” to progress.

But it hasn’t worked out that way. Far from industrialization breaking up the “religious attitudes, social stratification, law and convention regardng property ... and the tradtional role of the state and the ruling class,” the archaic social relations have combined with capitalist profit-taking to keep India from really grappling with its inherited poverty and cultural backwardness. [4] The class interests of landowners and capitalists stand in the way of progress.
 

INDIA will stagnate – if stagnation has not already set in – and the country will fall back into a semi-colonial rut, becoming increasingly an economic dependency of Western imperialism. The second five-year “socialist” plan is already more fiction than reality. It has undergone a “re-appraisal” as a result of which, says Venkatasubbiah, the government has ceased holding it up as a “physical” plan – that is, one which actually governs the country’s output. At best, the plan determines the amount to be expended for flood and irrigation control, for social welfare and for the few industrial plants the government is constructing. Parasitic landlords and big businessmen are left to look after the rest of the economy.

Meanwhile government corruption is rampant. [5] The burden of taxation falls on the masses. Unemployment is mounting. Famine and grain speculation stalk a number of areas. The class struggle is sharpening.

The Chinese have proceeded in a radically different fashion than the Indians. Through a mass revolutionary upheaval they liquidated at the outset all archaic social relations and went ahead to the abolition of capitalist property forms. The Chinese CP, unlike the Indian Congress party, did not merely pass laws. It helped the peasants organize for the expropriation of the landlords and for land division and helped the women organize for their emancipation from the ancient oppressive family forms. In 1953 the collectivization of agriculture was begun – an indispensable measure for eventually transforming the entire technical basis of Chinese agriculture and of raising productivity to the most advanced levels.

Then, by expropriating all foreign holdings and instituting a government monopoly of foreign trade, the Chinese ended the country’s status as a plundering ground for Western or Japanese imperialism.

Finally, though the CP’s program called for permitting capitalist enterprise to exist side by side with state-owned enterprises for a period of time, the government concentrated the nation’s efforts on building up the state-owned sector. In a few years, capitalist ownership had been reduced to a vestigial place in industry, and has now been virtually eliminated.

These social-revolutionary measures, which released tremendous energies among the population, created the conditions for a planned endeavor to remake the face of the country.

Low technological development remains a big obstacle for China as well as for India. It has distorted economic progress by promoting the growth of new social formations, such as the parasitic bureaucracy, whose interests are inimical to the construction of a socialist society. Nevertheless, the outmoded social relations that keep India hopelessly mired have been definitively removed. The road has been cleared for great economic advances. The figures tell the tale: China is bounding ahead of India.

As other of the economically backward countries – including India – take the Chinese road, the capitalist structure in the rest of the world will be undermined. The working class in the West will be impelled to join the struggle for socialism once again. The extension of the Chinese revolution to the rest of the economically underdeveloped areas of the world will thus be the prelude to the unity of the industrially advanced and backward countries in a worldwide socialist endeavor to eradicate poverty, disease, illiteracy and war from the face of the earth.

Footnotes

1. India and China: Contrasts in Development Performance, American Economic Review, June 1959. Wilfred Malenbaum is Professor of Economics at the Wharton School of Finance and Commerce, University of Pennsylvania. He also serves as Director, India Project at the Massachusetts Institute of Technology’s Center for International Studies. Malenbaum lists the following sources for his comparisons of India and China for 1952 and the years afterwards: “All data for India are my personal estimates based upon official materials available through 1956/57 and to a lesser extent for 1957/58 and 1958/59.” For Chinese data, he uses W W. Hollister, China’s Gross National Product and Social Accounts 1950-57, one of several works by American bourgeois economists critically evaluating official Chinese statistics. To Hollister’s computations, Malenbaum added 1958 data. These figures are lower than the revised official statistics for 1958.

2. Choh-Ming L., Economic Development, The China Quarterly, Jan.-March 1960.

3. H. Venkatasubbiah, The Indian Economy Since Independence, Bombay: Asia Publishing House, December 1958, pp.277-278. (Issued under the auspices of the Institute of Pacific Relations.)

4. In an article, Political Stability and Economic Development, Wilfred Malenbaum writes: “Looking ahead, my economic judgment under present [Indian] programs is not only that a slower rate of growth will be accomplished [than under the first plan]; there is even some question as to whether the patterns of economic life characteristic of a static economy have actually begun to be converted into those charactistic of an economy which gives promise for some dynamic change ... Mostly, there is the question as to whether the approach of the governmental elites to the task of modernizing India has yet begun to grapple with realities of traditional India ... All this is not to gainsay the tremendous changes that have taken place in India over the past decade ...” United Asia (Bombay), Vol.11, No.5. The article is based on an informal talk Malenbaum delivered Jan. 16, 1959, in Washington, D.C.

5. The Congress party’s “integrity has ... been vitiated by the politics of Tammany Hall,” says Venkatasubbiah. Op. cit., p.37.

 
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