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I disagree that India is a "backwater compared to China." They have a more robust concept of property rights and contract law thanks to the British Raj-- critical pieces of legal infrastructure that China lacks.

China can build ghost skyscrapers and empty shopping malls with slave labor, but in the end India will leave them in the dust.

I disagree that India is a "backwater compared to China." They have a more robust concept of property rights and contract law thanks to the British Raj-- critical pieces of legal infrastructure that China lacks.

China can build ghost skyscrapers and empty shopping malls with slave labor, but in the end India will leave them in the dust.

If India had a robust concept of property rights and contract law, it would now be a developed country on par with the US and have an economy 4x ours. Instead, the annual per capita GDP is around $1500 a year, compared to China's $5400, and Vietnam's $1400. If China's is slave labor force, India's would be a sub-slave labor force, given that incomes are about 1/4 China's.

Let me point out that spectacular real estate busts are not exclusively a Chinese phenomenon. The Asian crisis of the late 90's saw large amounts of both empty and halfway-built malls and apartment buildings. The oil patch real estate bust that killed the S&L's was pretty bad, but we outdid ourselves in the post-9/11 years with the MBS crisis. Dubai has obviously seen an epic bust in recent years relative to the size of the economy.

Bottom line is that China's economy is going through a down cycle, just like every other capitalist economy, with one key difference - unlike many of these other places, it actually went through a massive boom before going through the bust (if 7.5% growth can be described as a bust). India's growth has slowed to 5.3%. Where were India's years of double-digit growth - encountered by every East Asian tiger economy from Singapore, Hong Kong, South Korea and Taiwan during their fast growth years? Ultimately, India's economy is a relative backwater that, although large in aggregate due to its population size, has been mismanaged since its independence in 1948, in part due to its callous disregard for both property rights and contract law.