1. India & China Extract from Reports

2. India - China : Overview Government controls mainstream media, infact one of the wikileak cables indicated that Chinese GDP figure itself could be man made Excessive Information rights with minimal gov intervention Impartial Information * State controlled. 8 out of 10 largest listed companies are state owned Commercially driven companies with strong corporate governance standards Private sector & Corporate Governance Misallocation and inefficient use of resources depending on FDI Fuller use of resources owned necessary for long term growth Micro-economic level High performance, though there is an conscious effort to slow down Low, though anticipated to outshine China in GDP growth in 2012 if not 2011 Macro-economic figures Tightly controlled capital allocation restricting the ability of private companies to obtain stock market listings. Allows firms to obtain capital. Greater efficiency and transparency. Advanced institutional infrastructure. Capital Market Inconsistent legal system with low political status. Domestic private enterprises are discriminated against several polices etc. Advanced and decent legal system that provides ownership protection for private domestic enterprises Legal System Extensive, though today China + Hong Kong + Macau share 6% of world’s FDI ( compared to Britain’s 45% in 1914 and 50% for US in 1967) Low FDI status Top-down approach Ground up Development approach Foreign direct Investment & Centralized ‘control’ & overseas growth Major Chinese Government controlled Bank loans abroad in 2009 was in excess of $450Bn, to fuel Chinese overseas conquests. Government many a times steps in to help close deals Services and Home grown entrepreneurship – ‘Jugaad’ attitude Development Driver The manufacturing hub of the world Services : Back office / Technology lab of the world Focus on China India

4. 2009 Legatum Prosperity Index : Points / 100 * Contrary to other reports but could be the ones supported by the Govt. ** Contrary to other reports but could be limited to Urban areas *** Nobel Peace award & Recent clamp down by Chinese Govt: 200 odd individuals & Liu Xiabao’s wife, were put under travel restrictions and house arrest. Also instituted a new award and announced its own Confucius Peace Prize a few days before the Nobel Peace award, was given to former Taiwanese vice president, Lien Chan. 60 30 Health 30 90 Social Capital 60 40 Education 20 70 Personal Freedom 30 60 Governance 50 30 Safety & Security** 10*** 80 Democratic Institutions 60 40 Entrepreneurship & Innovation* 70 60 Economic Fundamentals China India The 2009 Legatum Prosperity Index

5. Why they are that way: History India’s Global Ambition & distrust of China : Colonization by the British for 200 possibly gives India both the global ambition and also the affinity for English as a language, which has proved to be a big pro. India-Sino relationship has been deeply soured by the defeat in 1962 by China, and also China;s attempt to surround India, but maintaining good and trade relations with India’s neighbors like Sir Lanka, Pakistan, Myanmar & Bangladesh. Chinese paranoia of all things non-Chinese : China has faced its own share of humiliation by colonist powers during the Opium wars 1842 & 1856-60 at the hands of the British and French, which marked the end of the Qing dynasty. The 1937 invasion by the Japanese where 300,000 civilians are killed, in Japan’s attempt to gain access to natural resources, still has the Fuji-Sino relations soured.

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