India more tolerant of power losses than China would be

This picture taken on July 26, 2012 shows workers restoring electricity in the worst-hit area of Fangshan, on Beijing's mountainous southwestern outskirts.

Jeremy Hobson: The power is coming back on this morning in India after yesterday's huge blackout that left more than 600 million people in the dark. It was the second outage in two days and is blamed in part on rising demand for electricity in one of the world's fastest growing economies. But in another one of the world's fastest growing economies -- China -- a blackout like this would be unthinkable.

Marketplace's China bureau chief Rob Schmitz explains.


Rob Schmitz: If -- and that’s a very big if -- half of China suddenly lost power, what would happen to the official in charge of the national power grid?

Shaun Rein, author of "The End of Cheap China" and head of China Market Research has a guess.

Shaun Rein: He probably would be arrested and put under investigation for corruption and might be demoted, at the very least, within the party.

 In India, on the other hand, the prime minister rewarded the head of the country’s crippled power grid with a promotion. On paper, the demographics of India and China may look the same, but not on the ground.

Shaun Rein: Part of the issue is that Chinese are not willing to accept problems with infrastructure. They’re much more likely to protest than many Indians would. I think Indians are used to brownouts because they happen on an ongoing regular basis anyway.

More and more companies are looking beyond India when it comes to where they want to build their next factory.

Both India and China are relatively poor countries with long traditions of corruption. But, says Rein, is that China’s communist party lives in constant fear that if it doesn’t please the people, the people will revolt.

In democratic India, people can vent with a vote. Problem is, almost always, the new boss is the same as the old boss.

 In Shanghai, I’m Rob Schmitz, for Marketplace.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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