The century of China and India?
Zou Hanru China Daily  Updated: 2005-10-28 05:43

Together, they are home to one-third of the world's population. Both have thousands of years of history. Both opened up their economy in the past quarter of a century. Both have been growing rapidly, one at a spectacular 9 per cent plus, the other at nearly 6 per cent.

Till 600 years ago, when Europe was insignificant and America was yet to be discovered, the two together accounted for 75 per cent of the world's GDP. And if their economies sustain their present growth rates, they could once again become the world's super economies. They could change the global economic balance around, say, the year 2020.

And that is precisely what China and India pledged to work towards when Premier Wen Jiabao visited New Delhi earlier this year. Indian Prime Minister Manmohan Singh's message was to end 600 years of Western dominance through free trade and co-operation. "Together," he said, "China and India could reshape the world order."

The first era of globalization, referred to by Marx, began with European countries competing with each other to create colonies. Till the 15th century, China too sent great fleets to India, the Persian Gulf and the South Pacific for trade, but without establishing trade ties or conquering territory. By the time the Portuguese reached India, China had preferred to stop making its master sea-faring vessels.

The result: five centuries later, at the dawn of the 20th century, Europe and the United States accounted for the vast bulk of the world's GDP, while Asia (with the exception of Japan) had slipped into economic oblivion.

But all that has now changed. The two neighbours today are in a position to tilt the economic balance back in Asia's favour. Though they have had very different civilizations and followed different paths to growth, they have converged somewhat in the past two decades. And that makes them a model for each other.

Both countries are also racing to the top of the value-technology chain. Give them a fraction of the cost in the West or developed Asia and they can make the most sophisticated technology.

The international economic theory facilitating Western dominance seems to have been turned on its head, thanks to the Western world's unending quest for profit. The outcome has been fantastic: globalization no longer means Americanization, it is going truly global and China and India are capitalizing on it.

But the two countries' rise has been watched with trepidation too, especially because they complement each other's strengths. China, one of the few countries still building multi-billion-dollar electronics and heavy industrial plants, is expected to maintain its dominance in mass manufacturing while India continues to rule the software, design, services and precision industries.

So if the yin and yang of these immense workforces are converging, then why is their bilateral annual trade just US$14 billion? The reasons are various. In 1949 India, then a fledgling republic itself, was one of the first to recognize the establishment of the People's Republic of China. What followed were years of peaceful co-existence and flourishing trade.

But things changed after the 1962 war, which left some unresolved territorial disputes. That had an impact on the countries' economic ties, too, and one could not benefit from the other's achievements.

The situation, however, has changed for the better. It would be premature to assume China's border with India will become like that with Russia, where trade is booming, bringing succour to hundreds of thousands of needy people on both sides. But we could always try to aim for that, as we should for a true collaboration between the two countries' industries.

In the coming decades, changed economic balance will disrupt workforces, industries, companies and markets in ways that we can barely imagine. And economic powers are bound to try to change the rules of the game in their favour. What do China and India do then? Collaborate on the economic front? So why not begin the process now?

Let's not forget what Deng Xiaoping told a former Indian prime minister: "The 21st century can only be the Asian century if India and China combine to make it so." That still holds true even after two decades.

Let the philosophy and culture of a better life for the people shape today's world across our borders.

Email: zouhr@chinadaily.com.hk

(China Daily 10/28/2005 page4)