Pundits have designated either India or China as the heir apparent to the U.S.'s domination of the world economy. Both can make a good case--Indians have a time and economy tested track record for leading the IT economy. The multibillion dollar outsourcing giant Infosys is just the biggest player in an ever growing technology and services based world economy. India's problem is that it just hasn't gotten its act together economically. Millions of entrepreneurs are hamstrung by bureaucracy and red tape, and its political system refuses to open up its lumbering industrial sector to healthy domestic and international competition.
China, in contrast, has a vibrant and dynamic economy, plowing through its industrial revolution in less than half the time it took the US. China's biggest liability is its authoritarian political system, but even that systems influence appears to be on the wane in the everyday life of the Chinese.
After spending 10 days in China--visiting with officials and private entrepreneurs in Beijing, Shanghai, Chengdu, and Xi'an--I would bet on China the global economic race. While the environmental and political hurdles facing this nation of 1.3 billion people are formidable, the on-the-ground can-do attitude is infectuous. Moreover, the national government--the People's Congress--is working on legislation to strengthen property rights and markets as a key part to the next "phase" of the nation's economic development. There appears to be very little Marxism in China's unique brand of Communism.
At the current pace of economic reform, investment, job creation, and wealth creation, China is not competing with India. Their bar is far higher. Their benchmarks are set by the United States. The question is whether we are willing to take the steps necessary to be competitive with the Chinese.