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For all the economic growth caused by the "flat" world, especially China and India, it's silly to dismiss the constant threats they possess. Economically, politically and militarily. True China and India grew at 10.1% and 8.9%, respectively this quarter.

China for all its record at getting 300 million people out of poverty in the past three decades is hardly the best place in the world. Journalists are regularly hounded, stock markets are in inverse relation to its economy and its judicial system, the official enactor of the billion-dollar contracts is non - existent. Its banks continue to lend to projects like that of the Shanghai Maglev, which according to HSBC Holdings, has a pay back period of 160 years. Labor rights are a dismissed thought with little provocation. Territorial disputes exist with Taiwan and India, apart from the routine token outrage at Japanese leaders who visit the Yasukini shrine. Industrialization has continued without any regard to the climate and environment.

Joseph Stiglitz, economist and Nobel Prize winner, believes that the current mechanism for measuring GDP is inaccurate as it values the current production without looking at the impact it has on the environment for future production (what he calls "net green GDP"). China would scale behind even in its much-hyped GDP if measured in that manner. A World Bank study in 2005 indicated that it incurs close to $ 60 billion in environment and health-care costs associated with the degradation of its environment. This exceeds the annual FDI it receives which is lesser than $ 50 billion.

India, for its record at being the largest democracy in the globe, is certainly a failed democracy. Communal tensions run high, per-capita GDP is $3,100, judiciary is a mess and industrialization never seems to garner much confidence. Contrary to China, it has far too many labor laws that ensure its displacement in the Competitiveness Index released annually. Infrastructure projects take a generation to complete and at costs that take its toll on the exchequer.

Moreover, its chief coalition partners, the communists, seem to be more interested in the progress of China than the country they claim to represent. How else does one explain their fascination with ensuring Chinese companies secure contracts for large infrastructure projects?

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* Contributed by: -
Vishal Bhargava,
Worked at BA Continuum Solutions,
Currently studying at Welingkar Institute of Management, Mumbai.