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Rediff.com  » Business » Why China won't be able to match India

Why China won't be able to match India

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August 24, 2005 07:36 IST

If George W. Bush wishes to be remembered in future ages -- and what high-spirited world leader doesn't? -- he will devote much of his second term to forging close and durable links with India.

Naturally, US President Bush must seek to get Continental Europe back into the Atlantic camp. With the sun of the anti-US Jacques Chirac setting and the star of the realistic and sensible Nicolas Sarkozy on the rise in France, and with the likelihood of the pro-US Angela Merkel's taking over Germany's chancellorship from the ridiculous failure that has been Gerhard Schröder's, the Continentals are already moving Bush's way.

People power

Regardless of who is in power, Europe is becoming a small player in the 21st century. The 25th International Population Conference, which met at Tours, France in July, made some significant points as to where power will be increasingly exercised in the new century.

By 2050 the European Union's 25 member nations will have a total population of only 461 million, compared with the US' 420 million. If you subtract Britain from the European total, the US population will be significantly higher.

The makeup of the European population will be older, with far fewer in the active workforce. It is more difficult to compute output per capita half a century hence, but if present trends continue, the GNP of the US will be three times that of Europe.

In contrast, by 2050 India will have the largest population in the world -- 1.6 billion inhabitants versus China's 1.4 billion, with India's population being much younger.

Although much of the Islamic world is growing fast in demographic terms -- a matter of serious import for southern Europe in particular -- India by midcentury most likely will have a greater number of souls than the entire Muslim world. As for India's economic potential, I regard that as almost infinite over the long term.

Since China threw off the horrific and destructive legacy of Mao Tse-tung's primitive Marxism, it has done remarkably well, on the whole. It has, however, tended to concentrate unduly on old smokestack industries, with the object of gaining quick returns through cheap exports.

Needless to say, this has had appalling consequences for the environment, which China will rue desperately in decades to come. China, with estimates of about 20 million convicts, is heavily dependent on slave labor, as well as on the labor of underpaid ex-peasants who are still pouring into the industrialized coastal belt.

China is not investing enough in high technology, with the exception of the military, and is thus making the same mistakes the Soviet Union made. Indeed, the differences between the new China and the old USSR are more superficial and visible than fundamental. The entire Chinese apparatus, political and economic, looks fragile to me.

India, however, with its educated strata fluent in English, is leapfrogging over the industrial epoch into the advanced communications era.

Bangalore, India's capital of high technology and outsourcing facilities, is a city fully at home in the 21st century, whereas Shanghai, despite its spectacular skyscrapered skyline, is a phenomenon rooted in the 20th century.

India looks -- and is -- astonishingly old, but its futuristic sinews, though often invisible to the untrained eye, are becoming formidable. As things stand, India will soon have more English-speaking computer operators than the rest of the world put together, and it will be organically linked to all the advanced economies.

Given the climate of freedom that prevails in India, we can expect that it will be producing ideas, inventions and new processes of its own before long. China will not be able to match this until it dismantles its communist system -- or lets it collapse.

To have a truly innovative economy, freedom of thought and expression must be encouraged. That is the most important lesson of the modern age. India has this precious tradition, as well as the rule of law, both of which are legacies (I am proud to say) of British rule. The rule of law is essential to long-term investment on the largest possible scale.

Counterbalance

India ought to also figure largely in President Bush's calculations for another reason: It is a counterbalance on two important fronts. India will prove invaluable as a counterbalance to China if China becomes aggressive, especially toward Taiwan. China has weaknesses in central Asia -- especially in Tibet, its much-oppressed and rebellious colony.

Tibet, for many reasons, has closer affinities to India and is much closer geographically to Delhi than to Beijing.

India is also a counterbalance to the Muslim world. It is an example to its neighbors, Pakistan and Bangladesh. As India's standard of living rises and India takes its place at the world's head table, the inhabitants of these two neighboring countries are bound to ask, "What's holding us back, while India prospers?" The answer will come, as it increasingly comes to Arab lands: Islamic fundamentalism.

All these trends can be to America's advantage. But they must be cultivated and reinforced by intelligent US policies and sophisticated diplomacy.

Paul Johnson is an eminent British historian and author.
Paul Johnson, Forbes
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