Top of the world: India and China
A historic meeting took place in New Delhi this week when the Chinese President Hu Jin Tao met the Indian Prime Minister Manmohan Singh. These two countries with huge populations, China with 1.2 billion and India with ca. 1 billion, represent 40% of the world's total population. Also, their economies have been booming in the past few years with China having annual increases in GDP of 10% or more and India now up to 8.5% last year.
Until a few years ago China and India had a number of border disputes that resulted in military action and bad relations between them. But, now both countries have realized that these disputes are minor compared to the importance of good economic relations. Both are anxious to upgrade their economies, and resent the West monopolizing their trade when they could be trading with each other. At present trade between them amounts to over b$10 per year, but they plan a huge increase to b$20 within the next few years and then to b$40 within a generation. These economic changes could alter the world. The US is still the leading economy in the world, but as far as sheer size and rate of growth is concerned China and India are the highest in the world.
Yet, for all their size and similarity, there are major differences between China and India. The most significant is that the Chinese population has levelled off as a result of years of enforced population control, allowing only one child per couple. While in India the population is still rising rapidly, with a large pool of children growing up in grinding poverty. Yet, this may be India's secret weapon, because while China does not have enough children growing into adulthood to fill its growing personnel needs in industry and technology, India has more than enough. Rather than being the negative problem of excessive population growth, this may be the one major advantage that India has in the competition with China and the world. But, on the other hand, while China can manage a carefully planned education policy geared for its large but limited school population, India's school's are swamped by too many kids often too poor to even have an education.
Another advantage that India has is that English is its national language, its lingua franca, while in China, learning English is one of the most difficult tasks the technologically developed children face. This is a significant plus for India, and explains why they have developed a huge computer industry in Bangalore and elsewhere, where they have the largest "call-in centers" in the world, where most calls to US companies end up. For this purpose, the Indians learn how to speak vernacular American English, so that their strong Indian accents don't interfere with their jobs. The idea of such call-in centers in China is presently absurd.
Another large difference is that India is a democracy, so that there is very little control of entrepreneurship and innovation. There was a time when the national government interfered in industry, preferring heavy industry and banning competition, such as IBM so that they could develop Hindustan Computers. Now that time has gone and they have caught up. The largest steel-producing conglomerate in the world (Mittal) is Indian-owned, and the largest concentration of computer software developers is in Bangalore.
While China has a very thriving market economy it is still a Communist Party dictatorship. Freedom of expression is not allowed and the internet and e-mails are monitored, so that the connotation of freedom of the market being allied with freedom of opinion is not true in China. How this might hamper the full flowering of economic development is unknown, although it seems to be working so far. Nevertheless, in the long run this must be seen as an advantage to India, where freedom of expression and opinion are relatively unhindered.
Not all is rosy in their relationship, India resents China's support for Pakistan and China resents India's limitation of Chinese investment in "strategic" industries. But, there is little doubt that China and India are the future giants of the world's economy, and how they will develop and in what ways they will differ will be very interesting to see, and could have momentous consequences.
Until a few years ago China and India had a number of border disputes that resulted in military action and bad relations between them. But, now both countries have realized that these disputes are minor compared to the importance of good economic relations. Both are anxious to upgrade their economies, and resent the West monopolizing their trade when they could be trading with each other. At present trade between them amounts to over b$10 per year, but they plan a huge increase to b$20 within the next few years and then to b$40 within a generation. These economic changes could alter the world. The US is still the leading economy in the world, but as far as sheer size and rate of growth is concerned China and India are the highest in the world.
Yet, for all their size and similarity, there are major differences between China and India. The most significant is that the Chinese population has levelled off as a result of years of enforced population control, allowing only one child per couple. While in India the population is still rising rapidly, with a large pool of children growing up in grinding poverty. Yet, this may be India's secret weapon, because while China does not have enough children growing into adulthood to fill its growing personnel needs in industry and technology, India has more than enough. Rather than being the negative problem of excessive population growth, this may be the one major advantage that India has in the competition with China and the world. But, on the other hand, while China can manage a carefully planned education policy geared for its large but limited school population, India's school's are swamped by too many kids often too poor to even have an education.
Another advantage that India has is that English is its national language, its lingua franca, while in China, learning English is one of the most difficult tasks the technologically developed children face. This is a significant plus for India, and explains why they have developed a huge computer industry in Bangalore and elsewhere, where they have the largest "call-in centers" in the world, where most calls to US companies end up. For this purpose, the Indians learn how to speak vernacular American English, so that their strong Indian accents don't interfere with their jobs. The idea of such call-in centers in China is presently absurd.
Another large difference is that India is a democracy, so that there is very little control of entrepreneurship and innovation. There was a time when the national government interfered in industry, preferring heavy industry and banning competition, such as IBM so that they could develop Hindustan Computers. Now that time has gone and they have caught up. The largest steel-producing conglomerate in the world (Mittal) is Indian-owned, and the largest concentration of computer software developers is in Bangalore.
While China has a very thriving market economy it is still a Communist Party dictatorship. Freedom of expression is not allowed and the internet and e-mails are monitored, so that the connotation of freedom of the market being allied with freedom of opinion is not true in China. How this might hamper the full flowering of economic development is unknown, although it seems to be working so far. Nevertheless, in the long run this must be seen as an advantage to India, where freedom of expression and opinion are relatively unhindered.
Not all is rosy in their relationship, India resents China's support for Pakistan and China resents India's limitation of Chinese investment in "strategic" industries. But, there is little doubt that China and India are the future giants of the world's economy, and how they will develop and in what ways they will differ will be very interesting to see, and could have momentous consequences.
posted by Jack Cohen at 7:28 PM
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