Thoughts on economics and liberty

China exports seven times more than India

Remember that India's share of world exports was about 25 per cent in 1700. But after two decades of weak and pathetic liberalisation, India is struggling with less than  2 per cent share of world exports.

Indian annual exports were $245.9 billion in the year ending March 2011 (source). Sounds good?

Well, compare with China's annual exports that will likely exceed $1.8 trillion in 2011 (source). [US exports appx. $1.3 trillion in 2010 (source)]

Had India followed the policies of freedom, its exports could by now have been 20 per cent of world exports, i.e. well over $3 trillion per year.

This can still become a reality should FTI find enough leaders quickly and step forward to lead India.



Data on Wikipedia.

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29 thoughts on “China exports seven times more than India
  1. Sanjeev Sabhlok

    Good question, Sachin

    The results of freedom are obvious. Even India’s current export performance is PURELY a function of its limited liberalisation. Chinese liberalisation started 12 years before India. The case for freedom is proven by the trajectory of both these nations.

    It is important to bear in mind, though, that neither India nor China are free enough. Had China been free, its exports would have been much higher, and more importantly its per capita income would have been at least five times higher.

    So while China compares well against India it is still very poor compared to ANY free nation.

    Instead, should India choose to become GENUINELY free then its per capita income (and trade) will rapidly increase to 10 times the current level – and quickly overtake China’s (note that China’s income has generally been lower than India’ throughout history). China, should it continue to be illiberal and partially free, will be rapidly left far behind in that case.


  2. Harsh Vora

    I was reading about the price system in BFN the other day. You've beautifully explained its benefits versus the socialist method through Moremi's example. It was a splendid reading. Reading this book can leave little doubt in one's mind that freedom, both economic and social, can bring great positive transformations in India. 

  3. Ganesh Babu S

    I read that the New Economic Policy diluted the socialist credentials of the Indian state so far with its policy of liberalisation, privatisation and globalisation.  I also read that these policies establishes India as a second largest growing economy. 
     Sir, Can you explain the context, " Two decades of weak and pathetic liberalisation", which means what exactly should have been done to increase the export and what is the actual problem with the present economic policy?

  4. Sanjeev Sabhlok

    Dear Ganesh

    I’ve explained quite a bit about good regulation and appropriate regulation in BFN and DOF. In particular, India is not yet a free country by virtually any international benchmark (leave alone the ideal about which I write). It is a trivial exercise to show why India suffers so much even now in the field of economic policy. There continue to be a very large number of public sector undertakings (100% privatisation is absolutely necessary), agriculture is almost 100% under state control (price, trade control, etc.), retail is 90% not free, insurance, banking, mining, education, health. Only airlines, and some industries are open enough (but there still exist things like Indian Airlines and Air India).

    In brief India is a PATHETIC case of liberalisation. What has happened is good, but it is very weak. There is need for 10 times more liberalisation of the economy – apart from significant changes in electoral laws and processes, and in the bureaucracy.

    Do read BFN when you get some time. And do read some of my articles published in FF. I’m glad you are interested in learning something. Most people simply assume that MMS is a knowledgeable PM. Indeed, he is beyond pathetic. A socialist at heart, he continues to oppose freedom in India. And Sonia and her gang of corrupt socialists add to the problems of India.

    India keeps chopping off its own feet.


  5. Ganesh Babu S

    I got your point sir. As you said I will have a look at BFN  and your articles in FF. As you said 100% privatisation will have a greater effect in economy and probably if I am right it can bring down the inflation rate too. 
    I still have some queries related to the problems that can be faced by domestic traders as a result of 100% liberalisation. But before that let me search for the solutions you could have quoted for this too in your articles.

  6. Supratim

    One correction – if I remember my numbers correctly, India's GDP was 25% of the world's GDP, not exports.
    And, I am not actually so fussed about the exports number – structurally, the Chinese economy is actually weaker than that of India, because it is primarily dependent on exports. Domestic consumption lags in a big way.
    If we can just do away with all the internal mindless regulations, like the ones on agriculture or land use or power, then the domestic market itself will expand by a huge multiple. The Indian economy will chug along quite nicely on the back of Indians trading with Indians – exports will not really matter in this environment – India, structurally, is very similar to the US in this sense, rather than China. We just need to unshackle India and let each Indian achieve their best.
    One field where you can already see this happening where domestic consumption is leading everyone by the nose globally – CRICKET!!! We will soon call the IPL the World Series of T20, a la Baseball!

  7. Kenneth T. Tellis

    Comparing Bharat (India0 with China is like comparing apples to oranges.  
    Remember the Admiral Zeng He of China opened trade with Africa, Arabia and the East Indies long before there was such a country as Bharat.
    To even say that China is not a democracy, is to hide that neither is Bharat.  Of course China is not steeped in the ancient system of slavery called the Caste System like Bharat.  Because you cannot have a Caste Systen enshrined in a DEMOCRACY.
    I had the opportunity to visit the Garbage Dump called Bharat in January 1993.  Bombay was the first presidencY of India during the days of British Raj, now that beautiful city designed by the British has become a Chawl (slum) that exposes the Brahmin Caste System which has brought down that once beautiful place.
    With that in mind do not expect India to ever compete with China a Super Power.  That would be an insult to China.

  8. lalit

    I do not know why you think Bharat Mata cannot progress. See how much it is progressing and is getting to worlds no. 1 country in corruption . We will win a trophy in corruption.

  9. Javed

    Bravo Lalit. You catch the bull with horns. Believe me we indians are frogs in well. See the quality life of citizens of other countries…for example china, hk, singapore, malaysia. Just see their railway stations world class against ours -stinking with filth. These politicians have fooled us till now.

  10. Carlos Botero

    Of course, freedom is the ideal status of an individual. But economic success can also happen under authoritarian rules, e.g., South Korea. So there must be a balance: too tight, so you have North Korea, but, too loose, and you have “The Wire” (TV series). People fail to understand that rules, controls, restrictions, taxes, incentives, medicare, pensions, subsidies, welfare and the like, act together as a form of “soft socialism”. Most slums are not democratic at all: in fact, they are often under the rule of brutal gangs and drug lords, so, as a matter of fact, that is their government.

  11. Dhiraj E

    India’s rise is mainly due to internal trade. Whereas China’s is export-oriented. Which is better? Self-reliance or . Those who claimed self-reliance died with the Soviet Union are shocked at the rise of India and Brazil and now speak in our favour. Now they hail our growth story and not China’s. The fact is that despite the odds we’re at least as close as we are to China which is highly commendable. China’s growth is unsustainable. Ours is better. We should instead concentrate on sustainability. We should concentrate into reducing population growth and increase productivity of the average citizen. Federalism is what has won the day and not the kind one sees in the United States but in Brazil and India.

  12. Sanjeev Sabhlok


    Population is an asset. It is improper to suggest that India should “concentrate into reducing population growth”. For all those who suggest such a thing I suggest that they commit suicide. Why don’t you start by committing suicide, Dhiraj. That will be one less Indian.

    The point is simple. Let there be freedom. People are the greatest resource. Let’s not denigrate people.


  13. vijay

    “Why don’t you start by committing suicide, Dhiraj. That will be one less Indian.

    Come on Sanjeev, dont be so harsh on the guy. I agree with you that manpower is an asset and I am against blaming everything on population. But at the same time effective population control policies(without any kind of enforcement like in China) are the need of the hour.
    RTE and education has to penetrate deep and that would automatically make our poor sections aware of the problem.

  14. Sanjeev Sabhlok

    Vijay, you and I have no business to “control” others. Let people choose how many children then have.

    When you talk about education affecting the poor, I find it problematic, since you yourself display complete ignorance both of (a) liberty and (b) population dynamics.

    Please manage your own children. Let others manage theirs.


  15. Pradip K Shome

    I am not an economist. But, I understand that a country totally dependent on export is surely is going to face trouble sooner or later. The country should take more interest in internal consumption than producing solely for export. Met a Japanese some time back who came to meet us for some business. He cooly said that ‘Japan must export or Japan dies’. Look at the Chinese economy which are dependent solely on export to western countries. They were simply closed as europe is facing worst of financial trouble. So, what Chinese got now. Their Industry is in doll drum and factories under closure and climate under acute green house effect. Do we really need such type of economy here in India? Let people look at the scenario again to determoine what sort of economy we need to follow.

  16. Abhishek

    Greatness of nation lies in its ability to generate wealth and ideas compatible with its human resources. While India and china may be doing good on economic front when compared with any non western country/society but even that is not in the congruence with their true human potential,moreover their contribution in terms of generating the ideas and innovation is very low if not nil. A sign which clearly depicts the absence of free market and free society.

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