Changes in the global economy – exercise 2 – answers

1 For big companies to talk at length about the billions of consumers at the bottom of the pyramid in developing countries who they’re trying to reach.
2 Because they were considered ‘too poor in buying power to matter’.
3 Thinkers, inventors and corporations.
4 1) China 2) India.
5 As a caricature ‘with a sizeable degree of truth to it’.
6 Things like building roads and power plants, which allows for the manufacturing that is required.
7 India is not able to do some of those things mentioned above, and therefore continues to be ‘utterly clumsy’ in building factories. He says India is able to create "information-centric and knowledge-based industries", which it does ‘elegantly’.
8 No, they go to the heart of how the countries are, so it is not just accidental that it’s happened this way for either country. Their approaches are reflections of very deep-seated underlying historical choices they have made.
9 The software, biotech, life-sciences and advertising industries.
10 In manufacturing, in physical infrastructure, and intensive industries.
11 They look at India and see a democracy; they look at China and see a centrally controlled communist economy.
12 That you can’t get things done in India.
13 By putting checks and balances in place to prevent any single centre of power from usurping everybody else’s rights.
14 When public interest runs foul of private rights – i.e. when public interest and private rights conflict.
15 That it might be in society’s interest to build a road which goes through your property, but not in my interest – so how a society makes the choice of whose direction it ought generally to adjudicate things in.
16 That India protects individual property rights even to the detriment of public interest.
17 That it seems to favour public interest even if it involves disenfranchising tens, hundreds of thousands, or even millions of people of their private rights.
18 The modernisation of both countries.
19 Farmers in the fields surrounding expanding cities in both countries.
20 In general China has been better than India at this.
21 Because China’s growth has involved so much hard infrastructure, and has had to be road-centred.
22 As ‘very unpleasant’ and the Three Gorges Dam was a spectacular fiasco.
23 That in India mechanisms are far more inefficient, so it is really hard to get your due.
24 The court of public opinion, the media, and the judicial process. Professor Khanna says that although the above exist as an independent check on executive or legislative authority, they are clunky and inefficient (so it takes a lot of effort and time to get justice).
25 China.

26 1) India will pull ahead of China in the long run 2) India will emerge as top dog 3) India’s demographics will work to her advantage, because she has more young people 4) The micro-economic fundamentals of India are much more robust than China’s.
27 That if he were a betting man he would bet on China for the next 10 years (in the short run) and then on India after that. China will find it ‘devilishly difficult’ to hone the industries based on the softer skills.
28 "How they manoeuvre round that remains to be seen….. so stay tuned on that!" – the phrase is an idiom from broadcasting – it means ‘keep listening to the radio to find out some news or information’.
29 That there is an unsung complementarity between the two countries – what China is good at India is pathetic at; what India is good at China ‘doesn’t have a prayer of catching up to for quite some time’.
30 Smart people everywhere. (Smart people everywhere can take the opportunity to leverage these 2 economies collectively in a personal and collective capacity.)