Will this century belong to China and India?

Will this century belong to China and India?

Zou Hanru, China Daily/Asia News Network, Beijing

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 neighbors today are in a
position to tilt the economic balance back in Asia's favor.
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 workforce 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 succor 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
workforce, 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 favor. 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.