China or India??!!!

In the year 1960 a small island nation of Japan was at the center stage with its growth at 10% . It was believed then that Japan was going to over take US soon. But in the subsequent years the growth soared with 5% in 1970s and 4% in 1980s. Recently Japan slipped in recession. Its national carrier JAL is filing for bankruptcy. What led to its downfall??? In the 60s Japananese had some of the highest bank balances. Loans were easily available and ofcourse the loan amount available were also huge. With cash easily available ppl started investing in its stock market and in real estate. Tokyo's stock exchange was at its peak with Nikkei trading at 38915 and a sq. ft of land in Tokyo as high as $93,000. The result- inflation. This devalued its currency. By 2004 the cost of land was just 1% of its peak. Millions and millions of dollars were lost in this boom. The stock market also collapsed. Investments were very little and consumption reduced greatly which resulted in deflationary pressure. Still banks were lending loans. The easy availability of loans also could not prevent the deflation. Now ppl were in search of some investment avenue which would give them considerable returns but everything was out of control. The prices began to appreciate but recession began to have its impact. In 2008 Nikkei was trading at 7000s. Lets come to 2010. China is the talk of the town now. Recent numbers suggest that China's $4.9 trillion economy has overtaken Japan's economy of $4.6trillion to become the world's second largest economy. But its local consumption is just one-third of its economy while India's is twice that of China's. India's consumption is two-third of its economy. Most of China's growth has come from infrastructure spending. Chinese have been asked to save as much as possible. Chinese inflation is also sky rocketing although its less compared to the world. China has also deliberately undervalued its currency against USD and Euro. In China all the profits are with the state owned companies with private companies starving for money while in India its just the opposite. This has made the life of a common China man no different where as Indians are continuously increasing their bank balance which is encouraging local spending. No of Indians in middle class is 300mn while tht of China's is something around 100mn. This middle class in quite important in maintaining a constant local demand. A report says that China's poverty has doubled while that of India's has come down by 50%. Rural India accounts for almost 50% of India's GDP up from its previous share of 40%. Rural India is growing at a faster pace than tht of urban India. While in China its just the opposite with 1/3 of total GDP and the rural growth is just 15%. And more over most of the Indian firms concentrate on rural India unlike their Chinese counterparts. India's Bharthi Airtel has the world's cheapest tariffs with TATA MOTORS making the world's cheapest car. China has left most of its rural areas in hanging. Anyway predictions have gone wrong most of the time. So lets wait and watch wats there for the future.