A numbers of books have come out in recent years discussing the relative competitive positions of the elephant (India) and the tiger (China). Read the following paragraphs and do some outside research and give your opinion about whether China and India will be the larger and stronger economy in 2030.

Just as China drove down prices worldwide in manufacturing, India is doing the same for services. But China and India are following two distinct paths to development. While China developed its economy by throwing open its doors to investment, international companies were unsure of India's commitment to free markets. So India underwent organic growth ad spawned homegrown firms such as Infosys in knowledge-based industries.

Despite its reputation for high taxes and burdensome regulations, India long had some of the most basic foundations of a market economy, including private enterprise, democratic government and Western accounting practices. Its capital markets are also more efficient and transparent than China's and its legal system is more advanced. And the fact that China is following a top-down approach to development while India pursues a bottom-up approach reflects their opposing political systems. India is a democracy and China is not.

India appears to be the first developing nation ot advance economically by relying on the brainpower of its people. By contrast, China is relying on its natural resources and inexpensive factory labor to develop its economy. The best growth strategythe organic-led path of India versus the investment-led path of Chinadepends upon a nation's circumstances.

Both China and India have immense potential for growth, and it is only a matter of time before each has a middle-class larger than the entire U.S. population.

Every nation on earth has so far followed a path to development that relied on its natural resources and/or its relatively cheap laborthe model that China is following. The money turning China into the world's factory is coming from foreign companies which is doing little to help China create its own powerful multinationals. Also China's top-down approach to development and India's bottom-up approach reflect their political systems. Although China is growing rapidly, it needs homegrown entrepreneurs and Western-style management skills to take it to the next level of global competitiveness.

If India can achieve sustained economic growth, it will become the first developing nation to advance economically by relying on the brainpower of its people. India's growth came largely-from native competitive firms in cutting-edge, knowledge-based industries.