Economic Times:

Despite China’s economy being far superior to India’s, its neighbour has a clear edge: a thriving democracy and an open economy. Yet, China is producing more and bigger entrepreneurs than India. The rise of Tencent, Alibaba, Baidu and Xiaomi from zero to billions of revenue in just a few years has no parallel in India. How could an authoritarian state have bigger private enterprise than a democracy?

Low wages, subsidies, institutional reforms, foreign investment and a favourable demographic have no doubt fuelled the Chinese growth in the past decade, but the recent explosion of private enterprise can be best explained by its crazy internet boom that has pulled a big majority of its people into formal economy.

In his 2015 book ‘China’s Disruptors’ Edward Tse coined an acronym to identify factors that triggered the entrepreneurial explosion — SOOT, which stands for scale, openness, official support and technology. These factors can be best seen operating together in China’s growing digital economy marked by huge people participation, transparency, supportive government policies and, well, technology.

Related: BATS with FANGS.

Leave a Reply