Ruchir Sharma on China and India: 'Which Is a Communist Country?'

A decade ago, China was essentially a cash-only society. Few businesses outside of major cities accepted credit cards, and residents often had to pay rent in large stacks of 100-yuan notes. 

Now, urban middle-class Chinese people go days without using cash — or even credit cards, for that matter. That's because mobile payment systems like AliPay have made it easy to pay for practically anything, even items from small, family-owned shops, from a smartphone.

This shift in how consumers buy things in China has been monumental. And what's remarkable about it, according to economic analyst Ruchir Sharma, is that it happened without the orchestration of the Chinese Communist Party. By contrast, democratic India's attempt to forge a cashless society through currency demonetization has made little difference — a contrast that Sharma finds ironic.

"China is a communist nation, but [it] gets to a cashless society through the private sector in a completely natural way," he said during an appearance at Asia Society on Tuesday morning. "India, a democratic country, does a completely communist step by ordering that 80 percent of the currency is invalid and hardly achieves any results through it. I find the paradox to be fascinating. Which country is communist?"

Sharma appeared as part of Asia Society's monthly Asia Briefing series, which brings leading figures in politics, business, and the arts to New York in order to discuss key issues facing the continent. In addition to discussing China and India, Sharma also talked about Japan's demographic crunch, Indonesia's contented society, and why the manufacturing sectors in countries like Vietnam and Bangladesh are thriving despite automation. 

Watch the complete video of Sharma's appearance below: