Which will deliver the best returns - India or China?

A note from GaveKal Research has dispelled some of the myths that have sprung up about the economic performance of both India and China, says Martin Spring in his On Target newsletter. But which of the two will provide the best returns for investors?

Among the myths about the world's two very different emerging giants, China and India, is that China's lack of democracy has aided its economic growth while India's growth has been retarded by its democracy, GaveKal Research argues in a new study.

The chief difference between the two economies explaining China's outperformance is not their political systems but China's abundance of capital because of a savings rate much higher than India's (40 to 45 per cent compared to 25 per cent).

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