China vs. India — The Next 100 Years

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Mumbai [reidmix / Flickr]

President Hu Jintao of China is visiting the U.S. this week. It’s not an official state visit — not like Manmohan Singh was granted last year — but more of a “working visit.” And this is more than political pageantry. It means, for example, that President Hu will be having dinner with Bill Gates… but not George Bush. And it means that the Sino-Indo-American geo-political chess match — which is perhaps more like Canadian doubles, in which the partners switch around a bit — is getting more interesting all the time.

There are plenty of short-term questions surrounding the trip: Will China budge on intellectual property, to Gates’s satisfaction? Will they revalue the yuan? (And would an abrupt revaluation actually help the U.S.?)

But the visit — on the heels of Bush’s whirlwind trip of his own to India — brings to the fore some deeper questions. After a two decade headstart, is the tide moving away from East Asia and toward South Asia? Is India ready to challenge China for primacy in the hyper-developing world? And who is the business community betting on? The venture capital firms? The outsourcing manufacturers?

In short, who’s the power of the new century and who holds the better hand: China, with her strong central command and claims of “stability,” or India, with her cacophonous, messy, multi-ethnic democracy?

Christopher Lockwood

Asia Editor, The Economist

Mark Frazier

Assistant Professor of Government, Lawrence University

Author, The Making of the Chinese Industrial Workplace: State, Revolution, and Labor Management

Rajiv Khanna

President, India-America Chamber of Commerce

Tom Coyne

Editor, The Index Investor

Update, April 19, 7:50 pm

Got an email from reidmix, who took the picture of Mumbai we see above. He was on the 10th floor of the Fariyas Hotel, looking west across the Arabian Sea. He even sent us the hotel’s exact latitude and longitude, so we could find it on Google maps.

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  • In short, who’s the power of the new century and who holds the better hand: China, with her strong central command and claims of “stability,â€? or India, with her cacophonous, messy. multi-ethnic democracy?

    china. no question about it, and it isn’t because of her authoritarian government. china will probably go through a collapse/correction within the next 10-20 years, but, it will no doubt resume its normal position as the most powerful civilization-state that mankind knows. the fact is that china has much better human capital to work with right now, and perhaps indefintely. the han chinese are healthier, wealthier and more literate than the vast majority of indias. the top 10% of india’s population is going to flourish in globalization, but at some point the fact that that nation has invested in its institutes of technology and universities as opposed to a broad based porgram of mass education & literacy is going to come back to bite their ass as they are weighed down by a medieval peasantry unequipped and unable to ‘catch up’ with the modernizing elites.

    the chinese will, and can, do democracy. taiwan has, south korea has, and japan has. that’s their future, as long as their population doesn’t age too much and there’s enough beef and oil in the world to fuel their rise to modernity. as for india, look to brazil, gross inequalities between slums and gleaming cities. better than everyone being poor, but a poor second to a healthy and wealthy republic of peers.

    p.s. and yes, the tiding is turning, but only because the field was so tilted toward the chinese until recently. it is easy to shrink a gap that is miles wide if you just get off your ass, doesn’t mean it will be closed.

  • oh, and let me offer a theory which i have heard and find plausible in regards to why india is such a concern to westerners: the areas that india is rising, software and other “knowledge” industries is in direct competition with the new class of educated workers that dominate the zeitgeist here in the states (ie., they are the journalists and the acquaintances, friends and relatives of journalists). in contrast, china has built itself up through manufacturing first, and workers hurt by this sort of economic development are less likely to have relatives and friends in places of power. textile workers in south carolina are just harder to relate to for most journalists than software programmers.

  • and just to reiterate: from nationmaster, literacy:

    china 86%

    india 59%

    it doesn’t matter what the ‘talented 10th do’ (india can compete here), you are as great as the least of you….

  • serious lee

    Do you hear the footsteps Nikos?

  • Nikos

    🙂 Is ‘lee’ a code-word for ‘levity’?

  • diemos3211

    I think that China runs a serious risk of crashing and burning. They certainly have their internal political problems to deal with, but they are also really pushing the envelope on a number of their natural resources (water comes most readily to mind). Also, while China has rather better basic education than India, they too have serious problems with the gap between haves and have-nots.

    India likewise has pretty serious problems to deal with, largely as outlined by Razib (though they are not intractable). Overall I think that unless we crash and burn ourselves in an orgy of debt and warfare we will be looking at a multipolar world. It’s not neccessarily the case that one country will be utterly dominant, in fact such a thing is fairly anomalous. While the U.S. will be relatively significantly less powerful, we will still be one of the major powers. India and China seem scary right now because they are rapidly developing, set to overtake the U.S. and leave us in the dust if they keep up their growth. I think that what is really happenning is that two huge countries with massive populations are correcting for an anomalous depression in their respective levels of development. After a while they too will slow down and become a well integrated part of the global economy (at which point we’ll all probably start freaking out about Nigeria or Brazil stealing all of our good jobs).

  • The choice of this topic and the way it has been layed out reminds me of the game of risk. Which player will be able to role the dice, grow their armies (or economies) and conquor the world. I just don’t see the point of this geo-political brain game, the kind wall-street boys have over beers or brandy after moving around those millions and billions. These nations and societies are far too complex to frame the discussion the way you have above. China alone could provide a month-worth of interesting shows. Come on ROS gang. There are a lot better topic in the “suggest a show” thread.

  • Maybe the silver lining of the unprecedented environmental degradation that is quickly heading our way: melting ice caps – floods – slides – unbearable summers in cities – more heat related deaths – desertification – devastating forest-fires – ect, will force an unprecedented global co-operation between nations and we can quit this competitive growth race toward the brick wall of planetary devastation.

  • Ben

    Having a modern American and Western European model of economic power applied to these two nations gets weird. Some kind of westernization appears desirable to both India and China, and that seems to be a standard used to measure progress and power for now. If the USA needs 25% percent of global energy output for just around 5% of the world population to maintain its status under this benchmark, what does the rise of more than 30% of the population to a similar standing require?

  • h wally

    I wonder what place your guests see for the US in all of this and the future

  • h wally

    I’d like your guests to analyze our place in the worlds economics and where we are headed. The roles of China and India seem well defined as far as where they are and where they are headed.

  • h wally

    Peggy Sue, I’d hope for that too but I wonder if the response you’d get from the hinese and people of india would be: “It’s our turn now.” Unfortunately when you’re focused on growth you tend to sacrifice some of the more important things such as you’ve mentioned. Capitalism measures its successes in terms of growth and expansion. Nongrowth is seen as stagnation.

  • And economics has won the challenge of the social sciences to define what it is to be human. Chinese and Indian peoples are just a bunch of consumers and producers. Inputs and outputs in flow of nature from diversity to garbage. Can’t we be more creative?

  • h wally: That is a very good point and you can’t really blame them for wanting the goods we all take so for granted. That is why I think we won’t change until things get really bad in terms of global weather related disasters. I’m just trying to find a glimmer of hope in what looks like impending doom. If everyone’s survival is at stake will we finally learn to co-operate?

  • h wally

    Well, Peggy Sue Your attitude of hope is a powerful thing. I believe there are much more powerful things at work in this world than political systems. The first step in any change is to have a vision of something better. Don’t be fooled by bad news or tales of impending doom. Mother Nature has an interesting way of creating change beyond our capacity to resist. I vote for her and place my faith in nonpolitical systems.

  • The best predictions in the world sow that in 2050, the split of GDP in the world will be 25%,25% 25% US, China and India. This is along with the fact that the US’s GDP will grow at ~ 2.5 % / yr which means that, by then, the rest of the world will really be irrelevant.

    As as far as the use of energy, the US produces, currently, 25% of the world’s GDP using 25% of the world’s energy.

    The reason why we do that with 5% of the population is called, productivity.

  • Fran

    Could we talk about social justice and not just profits? Tiennamen Square really happened and is still possible any day in China. It is not communism that makes another Tiennamen Square possible – it is the growing poverty and repression in China that is being fuelled by capitalism’s eternally broken promise of prosperity for the very poor of the world.

    Prosperity only trickles down to the top few – Americans should know how this game goes. “trickling down” is an illusion.

    People say the words “cheap labour” like that’s a good thing. Great. Which one of us wants to be the people that describes. Who in the world lives well as the “cheap labourer”.

    It is disheartening to only hear about things like “risk adjusted returns”, “investment ratios” without taking the opportunity to broaden the conversation that will discuss raising everyone up equitably instead of finding the most vulnerable people to fuel our profits.

    Fran M.

  • serious lee

    Please people, relax. In a world full of false promise we have chip suey and currey. You can say what you want but I’m content with just those two things. Isn’t it enough. Why focus on the unpleasant differences between us all. You all seem infected with insane intellectual ramblings. Keep it simple and be grateful for what you have. Quit whining and try to get out more often. I really worry about most of you you seem to be unnecessarily conerned about things that are really not that important. I expect to get some disaggreement about my opinions but I don’t care because, unlike you I’m right and I can live with being misunderstood. I forgive you in advance for your intellectual instability and lack of ability to accept a simple difference of opinion. Celebrate difference and ideas that challenge your own narrow points of view, you’ll only grow if you do. What a boring world we’d live in if everybody thought the same way. Up against the wall and fill in the blanks.

  • Potter

    New York Times Editorial April 20th:

    How Dare They Use Our Oil!

    “How’s this for nerve? The leader of a country that consumes more than 20 million barrels of oil a day is warning the leader of a country that consumes some 6.5 million barrels not to try to lock up world oil resources. When President Bush welcomes the Chinese president, Hu Jintao, to the White House today, the American complaint will be that China’s appetite for oil affects its stance on Iran, Sudan and other trouble spots.

    In other words, China is acting just like everyone else: subjugating its foreign policy to its energy concerns. The United States does it, too — witness its long-running alliance with Saudi Arabia.

    Still, the size of China’s population — 1.3 billion people — puts things into an alarming context. China recently overtook Japan as the world’s second-biggest consumer of oil. Its real gross domestic product is growing at 8 to 10 percent a year, and its need for energy is projected to increase by about 150 percent by 2020. China’s move from bicycles to cars has accelerated its oil consumption; by 2010, China is expected to have 90 times the number of cars it had in 1990, and it will probably have more cars than America by 2030.

    That leaves the world with two options. The first is to manage energy resources better. The other is to look for another planet. Simply continuing the current trends isn’t viable, especially with the growing needs of India, with its one billion people and a growing economy of its own.

    The United States doesn’t have the right to tell a third of humanity to go back to their bicycles because the party’s over. Clearly, Mr. Bush and Mr. Hu must tackle energy in a real and meaningful way. That can be done only if the United States both helps China find alternative energy sources and shows that America is doing the same thing itself.

    …………..Asking other countries to lay off the world’s oil supply so America can continue to support its gas-guzzling Hummers doesn’t really cut it.”

  • areader

    What the powers-that-be here in the U.S, should have done is force the U.S oil companies to some form of accelerated research and delivery dates for next generation eco-friendly/alternative sources of energy for Cars/fuel consumables from the bundles of profit that they are reaping. But the powers-that-be, being from an oil industry background(s), I am not surprised at their lack of will-initiative-motivations.

    don;t know what this will do to planet Earth, it has never been immune to our doings, but this time we will really feel repercussions in a short timeframe(read YOUR lifespan and definately your child’s) I read somewhere that some neighborhoods in northern India now have installed fans in their homes, when historically there has never been a need for them(a.k.a. their climate has permanently warmed up)

    Maybe the powers-that-be in the U.S and all cronies, who have an attitude of “my ass is covered” and “I must make enough money now to insulate myself from the major calamities-economic/otherwise” do not realize that if planet Earth gets screwed up WE ALL get effected, including the state of Texas(no offense meant).

    But then why blame others, that’s how we here in the U.S are, until the gas prices increased, no none cared about car mileage/average. If you have ever been in the developing world (for e.g. India) Car mileage and Gas costs are the first consideration for similar folks there BEFORE they buy a vehicle. But the U.S has always had more/abundant/enough, we are spoilt, easy, complacent.

    But we are better informed. We always knew that we have a situation that one day these fuels will come to an end. Remember the oil crisis, bt we never learn right? We are experts at short term fixes (for presidents this occurs every 4 years, until they get out). Even the current situation, with record profits being reaped by oil companies, wy can’t they come up with a accelerated research plan ? And please do not give me that BS advertisement that oil companies put out on TV, “what’s your carbon footprint?” crap and “it’s a beginning, we are starting…” They(oil comps) should have already gone ahead and created a fuel alternative by now. Anyways, who cares, who listens. maybe we all shud join the CYA gang and make sure that we are covered when the *hit hits the fan.

    Who knows when (futuristic paranoic scenario) planet Earth is going down, the money you make today will get you a place on the getaway ships that are escaping earth

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  • Now here is a story about economics and India that is worthy of ROS time. Behind this fanciful geo-political discourse, there are the stories of real people abused like pack mules and lab rats by the powerful elites and technocrats of capital in the “rational” pursuit of efficiency and profit.

    Drug trials outsourced to India

    India’s outsourced call centres are well known, but not its outsourced patients.

    By 2010, some estimate there will be two million patients in India on clinical trials.

    An entire industry has sprung up, specialising in recruiting patients and managing experiments.

    One of the doctors who later blew the whistle, Dr V Narayan Bhattathiri, told the BBC: “I can only say that what they did is something unbelievable or incomprehensible.

    Six years ago, an experimental drug from the US called M4N was injected into cancer patients in India without being properly tested on animals first.

    Later it was discovered that several patients had not known they were part of a clinical trial.

    “I couldn’t find any example of such a thing being done, maybe in the last 50 years or so. Maybe something similar could have happened in say concentration camps.”

    Most of the world’s largest pharmaceutical companies have a presence in India, but there is concern about how the country achieves its exceptional recruitment rates and questions about fully-informed consent.

    The reference to the concentration camps is apt, but the doctor is incorrect to think such experiments have not been done elsewhere in the past 50 years.

    Here is a link to the US history of experimentation on its own citizens in the name of “scientific progress”.

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  • aryan

    [Comment deleted by Open Source.]

  • aryan

    i hope u understand. Its very simple we love our nation. just same as u do.

  • aryan

    [Comment deleted by Open Source.]

  • aryan

    waitin fr ur reply, brother………………………….

  • carlini

    Some very interesting discussion concerning recent economic developments in China and india. Comparative and analytical, in-depth with lots of interesting facts and figures

  • Lemon

    hm…have any one on this board ever watched An Inconvenient Truth? It’s a really good documentary…and if I remember it right…U.S. is on the bottom of that list of environmental friendly countries…even China is above it…scary…

  • flatnose

    [Comment deleted by Open Source.]

  • Aryaputra

    China is midevil nation with travel documents required from a facist government to even move. It steal military technology from America and has been an agressor with India since 1949. The chinese have shown no greatness in history at all. They were opium addicts in 19th century. They killed westerners in the boxer rebelion. And than had a civil war and two cultural revolutions. They have killed all free thought in China. In Tibet they have destroyed a civilization they have no historic claim to. They occupy 100,000 square miles of Indian territory, give aid to terrorist nations like Pakistan. Slave labor is what makes Chinas products. They have no english language skills, they are taught a Chinese Nazi version of history. Yes they are a world power because as usual America is building a monster up. If India would give up democratic ideals and embrace the Sino-Facist model, India would have a much larger nuclear arsonal, and would now be building the world’s most advanced weapons. India has better science than China. But, India wants peace not war in the world. But, China does not. It is time for America to see that India not China is the future of Asia. China is despotic nation with no future other than miltarism and unfair trade.

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