This book is a compilation of research studies on different science and technological sectors, in which China has surpassed India significantly. Congratulations are in order for the editor who has led the probe into this challenging and enlightening subject area: Maharajakrishna Rasgotra, Foreign Secretary for India from 1982 to 1985, was honored with the Padma Bhushan Award in 2002 and was President of the Center for International Relations at the Observer Research Foundation from 2007 to 2012. This center sponsored a conference and proceedings related to the material from this book.
Rasgotra emphasizes that by the mid-1980s, with Prime Minister Jawaharlal Nehru’s support, India’s science sector had increased its scientific manpower to be the third largest in the world after the USA and the USSR. Although China has now shot far ahead, Rasgotra makes the point that “we [India] do not have to engage in a fruitless race with China” (p. 22). The purpose of this book is to demonstrate the need for India to improve their knowledge and understanding of China’s policies. The eight chapters in this book are contributions from Indian scientists who are persons of high eminence in their respective domains.
In Chapter 1, Professor Ramamurthy offers a critical analysis, examples and recommendations concerning how to increase the number of researchers in India. He states that the quality of India’s Science & Technology (S&T) Industry is comparable to that of China’s, as is the investment and output per researcher; however, India does not have as many researchers at work as China. Ramamurthy proposes that India should revamp their educational system to increase the number of researchers. The scale of China’s S&T Industry is “mind-boggling”. China is moving up the value chain in the global market in terms of high-technology products and is second only to the USA in patent filing. He uses the “rare earths” industry as an example of China’s concerted strategy in the marketplace. “Rare earths” magnets are much smaller than iron magnets and have a wide application in the automobile industry and in renewable energy. For example, wherever there is a motor, there is a magnet, and one needs to make that magnet more powerful and compact. China produces > 90 per cent of the “rare earths” oxides and controls 97 per cent of the global “rare earths” market, although its actual “rare earths” resources only account for 37 per cent.
Chapter 2 by Kharbanda describes the organization and structure of the S&T Industry in China. He attributes China’s success to quick implementation of initiatives by the government, supervision by Party committees and a heavy decentralized approach. Other relevant factors are the import of advanced technologies and better tax incentives for businesses. His view is that India is still caught in a paradox as a result of too much democracy at all levels of social and economic activity. The chapter lacks any specific focused message for change in India.
Chapter 3 by Professor Rao, the former Chairman of the Indian Space Research Organization, is relatively descriptive. He asks for a greater synergy to be established between India’s defense sector and its civilian, space and nuclear sectors. He points out that most of the Indian satellites are capable of being used for civilian and defense purposes, but the actual use of civilian satellites by the Indian military is very limited. On the other hand, China uses their satellites for both civilian and defense purposes due to the high rate of return on such an investment. Professor Rao concludes by proposing that India should create a high-powered think-tank to organize civilian – defense collaboration in this area.
Chapter 4 by Narsimha, India’s leading Aerospace Scientist, explains that China is emerging as a global player in aeronautics. In fact, he goes on to say that The Boeing Company has estimated that China will need about one-sixth of all aircraft produced in the world by 2030, including new civilian planes, military aircraft and new airports. He also addresses the Chinese push toward more education and research and development (R&D) for its aviation industry as well as its drive to acquire “Comprehensive National Power” (CNP). In the Chinese CNP index, domestic and international economic activities and capabilities, along with the S&T Industry, weigh in at 56 per cent. Social development and military capability combined weigh in at 20 per cent. The remaining 24 per cent is an equal mix of natural resources, government control and foreign affairs. The logic behind this distribution is the belief that growing one’s economy, increasing exports and developing the S&T Industry will result in more than half of one’s CNP.
During the past 15 years, Chinese aeronautics has grown rapidly across the board in civil, military and dual technologies. Chapter 5 by Professor Rajaraman discusses China’s nuclear programs and compares China and India across military, civil and scientific sub-programs. His comparisons indicate that China is ahead of India in terms of the number of nuclear warheads, but it is behind India in breeders and reprocessing units used for a closed fuel cycle strategy.
In Chapter 6, Professor Balakrishnan analyzes the Information Technology (IT) field in China. He states that “the growth of IT in China is actually stunning, and forms part of China’s comprehensive plan to be a world leader in technology” (p. 121). In India, the IT field was dominated by leveraging its own software development skills, and it skipped altogether the hardware component of IT and communications. Also, China has made large-scale investments in education and research. In addition, there has been tremendous exploitation of China’s diaspora abilities. The number of S&T doctoral degrees being received by Chinese students from American universities is roughly 4,000 a year compared to only 1,500 for Indians. In India, a main educational priority is to produce a large quantity and high quality of engineering students. In China, the priority is doctoral degrees in the S&T Industry, which includes 28,000 graduates from home universities. The number of publications by Chinese scientists in peer-reviewed international journals in 2010 was 320,800 compared to India’s 71,975. In terms of computer science publications, American researchers comprise 27 per cent of the journals, Chinese researchers represent 10 per cent and Indian researchers represent 1.7 per cent. This pattern is similar in almost every area of S&T. Another indicator of the role that S&T plays in wealth creation is in the number of patents created. China continues to create almost three to four times more patents than India every year. The Information and Communications Technology (ICT) market in the European Union was estimated at US $1.02 trillion in 2010. The Chinese ICT market was US $1.6 trillion in 2009 and growing at 18 per cent per year. To be at the high end of the ICT market, it is necessary to establish world leadership in scientific computing as well as leadership in the electronics, personal computing and telecommunications market. Of the top 500 supercomputers in the world, India has four while the Chinese have 42. IT in China has been growing relentlessly due to a well-planned combination of investments, a comprehensive outlook to develop an entire ecosystem and novel policies. All of these factors contribute to the robustness and sustainability of the IT field in China.
Chapter 7, “S&T in the Industrial Development of China: Comparison with and Implications for India”, by Professor Parthasarathi explains how Deng Hsiao Peng opened China up to the world in terms of industrial development and foreign trade, which led to a large amount of foreign direct investment and foreign technology coming to China. GDP grew at 10-12 per cent a year for over two decades. Similarly, India also opened up in 1991 and launched itself on a substantially higher growth path. In this excellent chapter, the author then goes on to critically analyze the industrial development across important sectors of the two economies. In the steel industry, China opted for large volumes but a fragmented industry. China produces almost 38 per cent of the world’s steel from > 7,000 plants compared to India’s 4 per cent from 11 plants. China, in fact, overproduces its steel and has inefficient production. In 2010, it produced 600 million metric tons, while consumption was only 370 million metric tons. China’s six largest steel producers have a combined annual output larger than that of any other nation. Its steel firms have highly wasteful production systems, and these firms do not appear to pay much attention to effective demand. In terms of fossil fuel-based electric power, roughly 70 per cent of China’s electric industry is coal-based and 20 per cent is hydro. The dominant issue in this industry is one of huge shortages and brownouts/blackouts, partially due to regional imbalances. In India, the Power Grid Corporation of India has tackled the inter-regional power transfer problems very well and with indigenously made technology equipment. This places India ahead of China in this critically important matter. In the field of electrical power generating equipment, India is ahead of China in terms of lower costs, technological know-how, development of indigenous technology and overall plant generating efficiency.
In the renewable energy sector in China, there is a lack of available data, but progress has been made in the wind and solar photo-voltaic sectors. According to the Global Wind Energy Council, in December 2011, China’s total global installed capacity was 62,364 MW, which makes it the world leader, and significantly higher than 16,084 MW for India. However, India’s wind power potential has been estimated at 50,000 MW under certain assumptions. Moreover, India has Suzlon Energy Ltd, which is the fifth largest wind turbine manufacturer in the world, with a world market share of 8.4 per cent, much larger than any comparable company in China. In solar photo-voltaic energy, Chinese companies overwhelmingly produced only cells and panels. Today, China is the largest producer of these products and has gained major export advantages. India has always had a domestic market-oriented policy, but Indian companies have expanded from producing the components of the solar photo-voltaic power systems to the complete system, and its leading company, Central Electronic Ltd, has put up turnkey plants abroad.
In this century, China has become the world’s largest telecommunications market, though India is also considerably large. China’s national policy is to build telecom networks throughout its state-owned companies. By 2009, the Chinese manufacturers had come to dominate the market with a 72 per cent share of the network equipment market. By 2011, Huawei had become the world’s number three maker of network equipment, and the Chinese company ZTE had become number five. Both are large companies, with sales volumes of around US $100 billion annually. Their US and European rivals complain that these companies are not “normal” but were given huge contracts and Chinese state bank loans. This is part of a long-term strategy by China to acquire absolute dominance of the total technology space. Professor Parthasarathi lays out a series of action steps that the Indian government and Indian telecom equipment manufacturers need to take to compete with China, but it remains to be seen if these steps are possible. In pharmaceuticals, the Indian industry is way ahead of that in China. Most Chinese manufacturers have outdated technology, low market concentration and weak international competitiveness. They produce low-value-added bulk drugs in a protected domestic market. The Indian pharmaceuticals industry has many large companies:
technologically strong;
self-reliant;
with low production costs;
significant R&D; and
innovative scientific manpower.
They have made 72 overseas acquisitions, of which 50 were in the USA and Europe, and some are wholly biotechnology based.
Chapter 8 is by Smita Purshottam, the Ambassador of India to Venezuela, who spent a year as a Harvard fellow. Her analytical chapter states that a Global Innovation Index covering 125 countries places China at 29th and India at 62nd. In 1978, Deng Xiao Ping switched China’s economic and technological strategy from an import substitution, heavy industry development strategy to a comparative advantage following. This led to the “China Miracle” of sustained growth. The government simultaneously embarked on massive investment in infrastructure. China followed the strategy of deepening and diversifying its manufacturing sector and then switching to a high-tech strategy. India’s reforms came 13 years later, followed the same kind of trajectory but without the emphasis on building manufacturing capacity via the creation of world-class infrastructure. The consumption and services sector- led model of the Indian economy, given the problems in the higher education sector regarding providing high quality training for services, made it clear that there were inherent limitations in its growth story. Without adequate R&D and a manufacturing sector to experiment upon, India could not win dominant global market shares, nor could it compensate for the growing and inevitable deficit in its merchandise trade balance. Purshottam lays out lessons for India. The main ones are:
to grow the manufacturing sector;
to launch a defense industrialization strategy;
to have focused policy guidelines on indigenization; and
to build a civil military integration paradigm leading to the development of a high-tech dual-use sector.
Without these, India will not be able to take its place as an advanced technological nation.
This book identifies many of the major Chinese and Indian multinational enterprises that have contributed to S&T growth in their respective countries. This book is insightful and unique in its collection of informed research on the strategies causing rapid S&T growth in China and how India and other countries can learn from this growth.
