- 2018-10-29
Competition between China and India in the 21st Century
In the past ten years, China has been collecting various "firsts"-the world's largest manufacturing country, the world's largest exporter, the world's largest foreign exchange reserves, and the world's largest automobile market. In 2014, the International Monetary Fund (IMF) even reported that China is the world's largest economy in terms of purchasing power.
However, China may have lost the title of "the world's largest". The new population study shows that the most populous country in the world may be India rather than China-the unofficial estimate of the Chinese population has been revised down to slightly less than 1.3 billion, while India’s population is 1.33 billion. This news may contribute to India’s growing feeling that although China’s rise has been a global topic for the past 30 years, the next 30 years will be the time when India shines.
Compared with China, India’s demographic trends certainly seem to be more favorable for long-term economic growth. This is not just because India’s population may have surpassed China, and it will grow at a faster rate in the future. More importantly, India’s population is significantly younger than China, which means that India will have a larger working-age population than China, and there will be fewer retirees to support. Japan’s recent history proves that an aging and shrinking population will have a huge negative impact on economic growth.
This demographic factor may already be feeding back to the rate of economic growth. After having to endure the ridicule of "Indian growth rate" for decades, India's growth rate is surpassing China, and it is expected that this year's growth rate will exceed 7%, compared with China's official growth rate of 6.5%.
India is the world's second only to China in growth over the past 26 years. In addition to the Chinese miracle, there is the Indian miracle. From 1990 to 2016, we only look at the top 20 countries in the world economy. The top two economic growth rates are China and India. In the past 26 years, China has been the fastest-changing country on the planet. 2016 was compared with 1990. , China’s total GDP has increased by 28.14 times, far ahead of all countries in the world.
If apart from the dazzling Chinese miracle, who is the second fastest growing country in the world, that is, India. In 2016, compared with 1990, India’s total GDP increased by 6.91 times. Without the existence of China, India is the most successful country on the planet with sustained economic development in the past 30 years. We cannot begin to despise the Indian miracle just because the Chinese miracle is too dazzling.
Just as China’s economic aggregate has gradually surpassed France, the United Kingdom, Germany, and Japan from 2000 to 2010, and leaped to second in the world, India’s economic aggregate will gradually surpass the world’s seventh in 2015-2025. France, Britain, Germany, and Japan have leapt to third place in the world. In 2016, India remained seventh in the world, but it further consolidated its surpassing Italy, Russia, and Brazil, and at the same time further narrowed the gap with the major Western powers. India’s economic aggregate is already sixth and France’s 91.6%, which is the first. The 5th place in the UK is 85.8%, the 4th place is Germany’s 65.1%, and the 3rd place is Japan’s 45.7%.
The world ranking in 2025 will be China, the United States, India, Japan and Germany. Yes, China is the first, the United States is the second, and India is the third. The world will be different from now.
However, there are some strong constraints on the view that India is about to catch up with and surpass China. First of all, China's actual economic scale is already five times that of India. This means that even if India’s current growth rate is slightly higher than China’s, the gap between China and India’s economies is still widening, rather than shrinking.
Second, although demographic factors are favorable to India, in other important aspects, China is more favorable. 30% of India’s population is illiterate, while China’s illiteracy rate is less than 5%. China's infrastructure is also far superior to India, which is reflected in roads, railways and basic health systems. Half of Indians still lack basic toilet facilities. This comparison is not just a game of words. Their importance is that China and India are two emerging superpowers in the 21st century. The two countries have been involved in a low-key geopolitical and ideological struggle.
India’s response to China’s bold plans to build an infrastructure network across Asia is very vigilant, and it is worried that these plans will create a Chinese sphere of influence that surrounds India. Last month, China held the “Belt and Road” International Cooperation Summit Forum in Beijing to promote its plan to spend huge sums of money to build infrastructure connecting Europe and Asia. At that time, more than 100 countries sent official representatives-India was on the sidelines. Indians worry that China is re-establishing a tributary system. In this system, Asian economies are tied to an economic system where "all roads lead to Beijing".
The impact of these infrastructure developments is both strategic and economic. In this period when the Chinese navy is rapidly expanding, New Delhi is looking at the ports built by China in Sri Lanka and Pakistan with a particularly skeptical eye. The growing exchanges between China and Pakistan have created anxiety in India, which has had four wars with Pakistan. There are still unresolved territorial disputes between Beijing and New Delhi. These territorial disputes date back to the war that broke out between them in 1962. Indians are also worried that China is increasing its claims to the Indian state of Arunachal Pradesh.
The military budgets of China and India have been increasing rapidly. China's second aircraft carrier has been launched, and construction has begun on the third aircraft carrier. India has become the world's second largest importer of weapons after Saudi Arabia. In addition, the Indians also stepped up their military exercises with the United States and Japan-the United States and Japan are regarded as strategic opponents by China. Shashank Joshi of the Royal United Services Institute in London believes that India-China relations are “in their worst state in more than a decade” due to escalating strategic tensions.
These debates reflect the fact that China and India not only represent two competing countries, but also two competing political systems, ideologies, and even civilizations. Western political analysts are thinking about the emerging power struggle between the United States and China. However, as economic and political influence shifts to Asia, it may be the competition between China and India that will ultimately determine the pattern of the 21st century.