An examination of the rise of these two Asian giants. Will India and China soon take their places as world superpowers?
They say the sun sets on every empire; but do the ‘emperors’ ever really believe that? Just twenty years ago, few would have accepted that, here in the new millennium, the talk would be that Asia had a chance in the race for economic dominance. But clearly, this is true. The most prominent analysts have had to admit that India and China have made an indelible mark on the global economic stage. So does this development signal the end of Western dominance?
India’s image is changing. With increasing finesse, it is throwing off its rags as it acquires an attire fit for the international business arena. The hustle of crowded and bustling bazaars, filled with the chatter of quick-witted fathers and uncles, is being replaced. What is heard and seen is the banter and pirouettes of the suited and booted, who occupy plush showrooms and brandish familiar Indian brands. These are they, able to pay the rising rents being demanded by landlords. The small and unsophisticated are turfed for benefits to be gained from the structural adjustments that stem from India’s economic development.
That tired-looking, bony oxen, that we so often associate with Indian agriculture, can soon rest. The pursuit of Special Economic Zones, where agricultural land is used for industrial purposes, is becoming a more prominent feature on the Indian landscape. Here in the West we see and hear little of this. But Indians know it: some fear it and fight it, while many others embrace it and endeavour to be part of it.
Though most are unfamiliar with the language of commerce, unknowingly, what we see and hear is evidence of ‘outsourcing’ being carried out by companies all over the world. When’s the last time you phoned the Abbey for details on your account and got to speak to someone from the homeland? Nine times out of ten, one can safely bet that you’ll speak to a Sanghita, or an Asad, or a Ranjit. You see, in recent years, it has become standard for global companies to set up call centres in India.
India’s IT industry is one of the most outstanding in the world. India’s huge population means it has the second most English speakers in the world; only America has more. Its middle class is burgeoning, and they are educated and well-versed in the technological know-how that characterizes our age of information. And poignantly, employing workers in India costs a great deal less. Companies have realized that this type of global business places them at a competitive advantage in the world of commerce. It’s good for them, and it’s certainly good for India.
China is the other word on the lips of anyone interested in global investment. Intel and Flextronics are just two companies whose investments in China are helping the country to become the giant that it is fast maturing into. Features such as its futuristic buildings, an advanced infrastructure, and the world’s fastest train mean that China is well-placed to compete with, and match, the benchmarks set by Western governments. And, like in India, Chinese labour is cheap!
But China is far from merely content to sit and feel flattered, gloating about its obvious attractiveness to outside investors. The Chinese have been just as active as their patrons and have headed for Africa: the mother continent.
The commercial community looks on in awe as China exploits this ‘untapped’ reservoir of opportunities for development. Astutely, they have by-passed the highly competitive Western markets. As Channel 4 news reporter Lindsey Hilsum reminds the world: “Nearly 700 Chinese companies operate in 49 countries...making China Africa's third largest trading partner – ahead of Britain. Oil is the major interest – a quarter of Angola’s oil goes to China…But it’s Sudan that’s got the closest links. 60% of its oil exports are now bound for the People’s Republic.”
The Chinese perspective is so different than that of the West. When they look at Africa, they turn down the corners of their mouths, lean their heads to one side, apparently exuding the emotions of sympathy and empathy. Then they talk patronage. Their banter is of limiting or cancelling debts ‘owed’ to them by Africa, and giving them aid and medicines. Not China. Their outlook is different. They see a market ready for investment. The Chinese have gone into Africa and built hotels, assembly plants, governmental buildings, and roads. They’ve installed electricity channels and are drawing up plans for a multi-million dollar luxury resort complex in Sierra Leone.
It seems that the People’s Republic has almost free reign in its pursuits. The sanctimonious West appears hindered by a noose of its own making which keeps its activities restrained. If it’s not pressure from shareholders about human rights, it’s own trade sanctions with various African governments about connections with ‘terrorist’ organizations, or dictators with whom they disagree. Failing these, it’s principles about an influx of cheap products, claiming this limits industrial progress. But the African people can buy them, and feel empowered doing so! What’s more, their infrastructure is being developed with technological expertise. And when the Chinese have had their fill, these developments will remain in place, intact.
According to World Bank sources, since 1980, China’s economic growth has topped both America’s and India’s. When the growth in China’s GDP was 9.7%, India’s was 5.8%, and America’s a mere 3.3%; in agriculture, China’s was 3.9%, India’s 2.7% and America’s 3.8%; as China’s growth in manufacturing soared to 11.9%, India’s and America’s lagged behind at 6.6% and 3.9%, respectively; when China’s service industry grew by 8.8%, India’s did so by 7.9% and America’s by only 3.9%. So if consistency is the element being sought, there you have it.
Both India and China have still large proportions of their population living in poverty. But it seems to be just a matter of time before this becomes a less obvious aspect of their landscapes. As these tigers prowl and maul the world of commerce, the fiercest and most feared of the two may well be the one with the Oriental stripes. By comparison, and by virtue of its historical links, India is perceived as a pussycat. Britain’s dominion over the subcontinent until the post-war years has engendered a greater sense of familiarity and kinship between the people and cultures of these nations. India has more English speakers, it believes in democracy, and embraces freedoms and institutions espoused by the West.
Super power leader President Bush recently demonstrated his acknowledgement of India as a legitimate and respected player. He welcomed it into the world of commerce, as one on par with the big boys, when he included Hindi as a world language and encouraged his fellow Americans to learn it, in their efforts to fully access and excel in the global markets. India is still a threat, but a much tamer and more amenable pet.
China, on the other hand, is communist: that long-time enemy of the West. Is this the tiger to fear? China’s success in Africa comes with many implications. Chief of these might be the fact that it undermines the influence of the West in Africa. America’s and Europe’s ultimate inability to engage Africa, politically and economically, can only serve to strengthen Asian dominance. Despite being a continent perceived as one engulfed by abject poverty and disease, Western leaders know Africa’s true wealth of raw materials. Consequently, they also know the real cost of its loss.
It may be that communist China needs a new name for its system of governance. Its view of economics does not seem at all in keeping with Marx’s or Mao’s vision of what communism should entail. The bold Chinese avarice that the world is witnessing does indeed seem to be far more in keeping with the precepts of capitalism! However, that may be a debate for another day. In the meantime, China will host the Olympics next year, and the World Trade Fair in 2010. As economists credit its growth with being methodically structured, India’s is said to be chaotically opportunistic.
But is it time now to cast our minds back to Malaysia’s heyday, under Prime Minister Mahathir bin Mohamad? Back in the early 1990s, Malaysia’s buoyant economy epitomized a rapid expansion in many Asian countries. Their populations saved and invested, and they seemed ready to dominate the global economic stage. Alas, in 1997, came the crash! Remember? Asian currencies were collapsing and their governments were running to the International Monetary Fund for loans. Mahathir bin Mohamad accused the West of sabotage and spoke of a “Jewish-Capitalist Conspiracy.” Will this be the reminiscent cry of China and India ten years from now? That remains to be seen.
1st February 2007