The India media blitz was a huge success. In Davos, speaker after speaker touted the idea that even if China is ahead now, over the longer run, the race between Asia’s two giants is a toss-up. For a few days at least, India’s emergence as a superpower on par with China was taken as a fait accompli. But what is the reality in the race between economies with more than a billion people each?

On the surface, China has opened up quite a lead on India. Twenty-five years ago national output in India and China was about the same. Now, by any measure, China is more than twice as rich.

But the real difference is not so much that successful Chinese are doing better than successful Indians. After all, the Indian elite are world-beaters, as Lakshmi Mittal’s bold $22bn bid for French steel maker Arcelor shows.

No, the real difference is that China’s communist government has succeeded in globalising a much larger share of its population than India’s democratic government has managed to do.

Not that China is exactly egalitarian. It is only along the coast, home to roughly one in three Chinese citizens, that most people can be said to have really joined the 21st century. Much of rural China is still miserable, with 150-million people effectively unemployed. But caste-bound India’s record of exclusion is worse. Perhaps only one in five people is integrated into the global economy. Whereas China probably has about 450-million people in its globalised economy, India has at most 200-million to 250-million. It is this difference, more than anything else, that sets the two economies apart.

What can India do to close the gap? Its biggest shortcoming is its lack of roads, bridges, ports and other infrastructure, where the contrast with China is just stunning. If your products can’t get to the global economy, you cannot conquer it.

Over the past five years, China has multiplied its highway system five-fold. Its 50000km of new roads are built to handle even large aircraft, which is more than one can say about some of the runways at India’s shambolic airports. It is not just a matter of money — India’s central bank is rolling in cash, which it has mainly invested in low-yield foreign treasury bills.

China’s authoritarian system faces little opposition when it decides to bulldoze a shantytown that stands in the way of a new airport. India’s government, by contrast, has neither the power nor the inclination to trample over poor people to make rich people richer.

Unfortunately, without infrastructure, the 800-million-plus Indians who have not yet “made it” don’t have a chance. India will never be able to create enough jobs in services alone; it must be able to compete in low-end manufacturing areas as well. Without better infrastructure, the majority of India’s citizens will remain frozen out of globalisation.

So, is the idea that India’s economy could overtake China’s hopeless romanticism? Not necessarily, if only because the areas where India excels, notably services, have far higher potential margins than manufacturing. Here, the Chinese, hampered by a vastly inferior legal system, will not be able to compete easily.

Western companies are far more inclined to trust Indian firms with sensitive financial information or patents than they are in the case of China. Foreign companies know that if they outsource any hi-tech process to China, they might as well publish their blueprints on the internet.

India also has a much better developed financial system than China, an advantage that will be increasingly important as the two countries develop.

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