January 08, 2005

Re: So Long US, Hello India, China

Asia Times, 11.11.2004

The conclusion made by David Fullbrook in his article So long US; hello China, India [Nov 4] can be summed up in one sentence – China's boom is probably the world's greatest, ever. As night follows day, bust follows boom. A bust to match China's, or even India's, boom will shatter the evolving geopolitical reality, bringing much instability for Southeast Asia, while creating an opportunity for a weaker, but stable, United States of America. Unfortunately for him, this boils down to reaching far bigger conclusions without any considerable analysis to back his views. Firstly, a bust does not have to be necessarily comparable to the boom a country experiences. The Industrial Revolution has shown us that the boom can be spread out over a longer period and different patterns of growth can be identified, some of which are short-term, while others much more long-term. Economic policies of Europe, Japan and the US reflect the gradualist approach of economic development after sizzling boom during their developing period. Secondly, although we can argue China to be the potentially "boom prone" economy of Asia, in no way can this be said of India. China has grown on excessive and futile government spending, too much dependence on foreign-based corporations, suppression of alternate views by a ruthless governmental structure and by a "herd behavior" by foreign speculators. Its capital markets are shuddery, its banks are a mess, the rural areas which are hidden from the world speak volume of the misery rife in the countryside and its nuclear arsenal pointing at half a dozen countries speak of its political nature. India, though much slower at generating growth, grows under a functioning democracy, domestic companies, domestic investment and a retreating government. India has mature and stable capital markets and a strong banking sector. It shows all the right trends to become a liberalized economy over the past 15 years as the government has consistently, albeit slowly, pursued economic reform. China has been more of a spurt – India is more of an ever-flowing river. Secondly, China has many more political enemies than India and is more prone to going to war than the latter. The world is [starkly] different to what Mr Fullbrook sees it to be – the most likely scenario would be a mutually destructive war between the United States and China in the future as a result of China's ambitions clashing with the US's reluctance to share the superpower tag. This would leave the world without a core state, an attracting pole. The stage will be set for the peaceful people of India to take up their place at the helm of the world community, and so they shall.

- 3 comments by 1 or more people Not publicly viewable

  1. Your article is interesting, a mixture of in-depth knowledge coupled with bizarre flights of fantasy. Whilst much of what you say about the frailty of the Chinese economy is impressively relevant, your depiction of the Indian economy is optimistic (ignoring, for example, India's reliance on its cheap labour advantages and the large threat it faces from China undercutting these, especially in light of recent changes in international law regarding the quotas on clothing manufacturing). Furthermore your conclusion, of an American-Chinese war leading to a world without a hegemon with India being the best placed nation to eventually take that role, is nothing other than ludicrous. Briefly, the USA's massive military might in terms of technology and arsenal (nuclear or otherwise) and China's massive military might in terms of sheer numbers mean that a war between the two would be hugely detrimental to both sides and fundamentally against the interests of either. In the same vein, India is far too weak (economically, politically or militarily) to become anything near 'the helm of the world community' in the near future. It is also interesting that you mention China's nuclear arsenal pointing at other countries and its readiness to go to war with other countries whilst completely ignoring the existence of any tension between India and Pakistan.

    08 Jan 2005, 15:27

  2. India's cheap labour is purely due to the low cost of living in the country, and due to our democratic credentials, we have minimum wage laws, working condition regulations which are periodically ratified by parliament. China has no equivalent. Therefore, India's manufacturing has failed to attract significant FDI.

    War between China and the US is unlikely in the near future, nor did I intend to argue the opposite. However, China and the US are in direct conflict of interests on many issues- starting with the Taiwan strait. Furthermore, there is always the reluctance of an existing superpower to give up its monopoly which might lead to conflict.

    As I said above, the conflict scenario is for the medium and long-term. At the current rate, India will have become the 3rd largest economy by 2025, with one of the world's most advanced military. In any case, I think you grossly under-estimate India's current capabilities. It is widely acknowledged to have the best navy in Asia, including the world's fastest AShM (Brahmos). It's top fighter the Su-30MKI invites no competition from top fighters of China (Su-30MKK) or Europe (Eurofighter Typhoon) and can only be matched by the US's current top fighter F-15E Strike Eagle. India has impressive joint ventures going on with Russia for a 5th generation fighter project (like JXXX in China and JSF in the US), and has its own domestic 5.5 generation fighter in the pipeline (like the F-22 Raptor). Its army is one of the largest in the world, considerably armoured. Its nuclear arsenal is secretive, but India is widely regarded as an ICBM power (although not openly disclosed).

    Pakistan is a puppet state propped up by doles from the US and cheap second hand weapons (conventional and nuclear) from China. But its a nuclear power nonetheless- India has to be concerned about this country. China's foes are hardly nuclear (barring the US)- Japan, South Korea, Taiwan, etc. Besides, India has a 'no first use policy' unlike China.

    11 Feb 2005, 11:21

  3. QT

    you are funny.
    typical indian

    13 Jul 2005, 07:25

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