Communist capitalism has beaten democratic socialism so far.

"China and India make up for two contrasting -- but fascinating -- case studies of economic management in emerging economies," wrote R Malik. The two economies are completely different. "China, which is demand-constrained, is trying to cushion its structural deceleration, whereas India, which is supply-constrained, is struggling to unlock its potential for higher trend growth." Reforms started in 1978 in China, along with a one-child policy which reduced the number of births by 400 million, improved health of women, reduced demand on environment for food production and decreased poverty, at the cost of erosion of human rights in forcing women to have abortions. Chinese leaders believe that growth is possible only by exercising total control on the people."They believe that they have their ears sufficiently to the ground, that they can remain responsive to any brewing discontent. They hope they can exercise social control through facial recognition and other technologies that they have taken the lead in deploying," wrote Prof D Rodrik. While communist China embraced capitalism, Indira Gandhi inserted the word 'socialism' into the preamble of the Constitution in 1976, during the Emergency. But the socialist rot had started much earlier in 1973-74 when the top rate of income tax was raised to 97.75%. When the balance of payment crisis hit in 1991 India had to pawn 67 tons of gold to borrow enough foreign exchange to fund imports. China undervalued the exchange rate of its currency to increase exports. "The disinflationary impact of its stepped-up supply-side and the ballooning of its current account surplus also facilitated a sustained downshift in the structure of local interest rates." "India's semi-functional 'do what you can, when you can' approach also has to make up for its relatively more progressive exchange rate policy that has shunned outright undervaluation of the currency." India always runs a current account deficit which could rise to 2.9% in this financial year. We have a trade deficit with our trading partners because we import more than we export. That is because our manufacturing as a share of the GDP has fallen to 16.2% in 2015-16 from 16.41% in 1989-90, which was just before the crisis. We have to rely on a stronger rupee to control the cost of imports to keep inflation down and keep the current account deficit from jumping. China has insurance schemes for social welfare, where employers and employees contribute, whereas India has a long list of schemes which are pure handouts. This necessitates a hunger for higher tax collections resulting in extortionate demand on businesses. That is why India's per capita gross domestic product (GDP) is $2,135, while that of China is $10,000. Will India go up or will China fall down? Remains to be seen.