GUATEMALA CITY -- During his visit to India in 2002, the local media fawned over Chinese Premier Zhu Rongji. To a considerable degree the deference shown to him was justified on strategic grounds, given that it came during a time of great instability in South Asia. Yet his proclamations concerning economic affairs were given disproportionate weight.
To be fair, China has posted some considerable economic success of late. While India and China had economies of roughly the same size in the 1950s and 1960s, China's greater progress with market reforms since the 1970s pushed it well out in front.
In particular, China has had spectacular success in expanding exports and attracting direct foreign investments. Despite India having a more predictable legal system and more extensive use of the English language, China received 10 times more foreign direct investment last year ($54 billion).