For much of recorded history, India and China were the most influential civilizations in the world, partly due to the size of their populations and geography. Cultural and political reasons explain why China has outpaced India economically in the past 40 years. But China’s place in the sun will be shortlived. A report from the OECD predicts China’s share of global output will peak in 2030. India now outpaces China in economic growth. Indications are that the land of Rama and Shiva will become the shining star in the post-industrial era, and not for strictly economic reasons.
Demographics will play an important role in the development of China and India in the coming decades. China is aging more rapidly than almost any country in history. Its dependency ratio of retirees/workers could rise to 44% by 2050. This will have a serious impact on taxable income, entitlement programs and healthcare. China’s attempts “to become rich before it becomes gray” partly explains its enormous investment in robotics, biotech and artificial intelligence (including “AI-DNA”) to address looming problems with labor shortages, elderly care, and healthcare costs.
In the past 25 years, hardly a week went by without China setting new milestones. After lifting some 600 million people out of poverty, China became the world’s largest producer, exporter, and importer of virtually everything from electronics to oil and green technology. China is the largest trading partner for most countries in Asia, and close to becoming the most important economic partner of most countries in Africa and South America. The entry of 600 million Chinese workers in the global economy is the main cause for the deflationary pressure that is felt in the West and the rest of the world.
China’s exploding tourist industry suggests the country may succeed in getting rich before it gets old. It will soon be the world’s most important tourist market, both for inbound and outbound travel. Less than 10% of the Chinese currently have a passport, but Chinese tourists already make up the majority of the visitors in most Asian and some European countries. China is expected to replace France as the most visited country. In hotels around the world, Chinese payment systems start appearing next to the familiar logos of Visa and MasterCard.
The end of poverty
China’s economic growth has slowed in recent years to a more manageable 4- 5%, while growth in India has accelerated to 8%. Despite the geopolitical rivalry between the Asian giants, 68% of Indian imports come from China, compared to 25% from the US. 16% of Indian exports go to China, against 48% to the US. The latter explains the growing trade friction between the US and Asia.
China is India’s leading supplier of capital goods used by Indian producers to manufacture products for the Indian market, and it is the dominant supplier of consumer electronics and green technology, including solar panels. Chinese suppliers control 87% of the Indian solar panel market, in part because of China’s economies of scale and in part because of subsidies from the Chinese government. Indian producers complain they can’t compete with the Chinese makers, but others argue that Indian consumers benefit from inexpensive solar panels subsidized by the Chinese government.
India also benefits from other inexpensive Chinese consumer electronics. Chinese makers of smartphones control more than a 50% share of the enormous Indian market. Indian producers find it hard to compete, let alone catch up, with Chinese hardware manufacturers.
India has long been a powerhouse in software services and has now set its sight on artificial intelligence
But India has long been a powerhouse in software services and has now set its sight on artificial intelligence. According to the networking site LinkedIn, India ranks third in the world after the US and China in terms of AI skills among its workforce. The country has a disproportionally large IT industry and strives to become a global AI hub for developing countries.
A discussion paper from government think-tank NITI Aayog, “National Strategy for Artificial Intelligence,” pitches India as the “AI garage for emerging and developing economies” with a focus on five key sectors – healthcare, agriculture, education, smart cities & infrastructure, and smart mobility & transportation. Globally, there is little innovation in the social sector and a focus on agriculture could make India a model for other developing countries.
India’s agriculture sector employs nearly 50% of the population but contributes less than 18% to its gross domestic product. Given the growing popularity of urban and organic farming, India could strive to make its farmers more productive rather than reducing their number for its own sake. Making farmers more productive can also limit the flight to the city and reduce environmental pressure caused by urbanization.
India is repeating China’s feat of massive poverty reduction. Between 2006 and 2016, India lifted more than 270 million people out of poverty, at a rate of 44 per minute, one of the fastest in the world. If the country continues to grow at the current 8%, it will have eliminated poverty by 2030, the same year that the UN-sponsored Sustainable Development Goals blueprint aims to eliminate global poverty. Extreme poverty is defined as living on less than $1.90 per day. The 10 fastest-growing economies in the world, six of them in Africa, are also expected to end extreme poverty by 2030.
Hierarchy of needs
What happens to countries that have eliminated extreme poverty and have provided the majority of the people with their basic needs? Western nations, Japan, Korea, and other developed countries, paint a less than rosy picture. Levels of material well-being have increased dramatically over the past 50 years, but so have social and psychological isolation, alienation and drug abuse. Depression, the main cause of suicide, claims more than a million lives per year, indicating that material comfort does not automatically translate into mental well-being.
While pockets of poverty remained, the US reached material well-being for the majority of its population in the 1960s. The “Sixties Generation” grew up in material comfort, which led to alienation as well as a search for “meaning” and a growing interest in spirituality, including Eastern spirituality. The so-called counter-culture movement focused on “raising consciousness.” Yoga, meditation, “healing,” mental coaching and counseling became growth industries. The Global Wellness Institutes estimates that the global wellness industry is now worth $3.7 trillion and is growing by over 10% a year.
Falun Gong was a reaction to the “materialist” outlook inherent in communism that was further fueled by economic liberalization
The US pattern repeated itself in Europe and has also reached East Asia. Japan and Korea saw growing levels of depression, alienation, social isolation, as well as the birth of new spiritual movements and cults often centered on charismatic leaders. The trend has also reached China. The quasi-spiritual movement Falun Gong, (literally “Dharma Wheel Practice”), has attracted 70 million followers. First taught publicly in Northeast China in 1992 by master Li Hongzhi, Falun Gong mixes Buddhist and Taoist disciplines with a Confucian-inspired moral philosophy based on truthfulness, compassion, and forbearance. Falun Gong was a reaction to the “materialist” outlook inherent in communism that was further fueled by economic liberalization.
In the 1940s, the American psychologist Abraham Maslow introduced his famous “hierarchy of needs,” a theory of psychological health predicated on fulfilling innate human needs in five stages. Maslow’s pyramid-shaped diagram mirrors the development of modern society in fulfilling five needs in five consecutive steps: physiological, safety, love/belonging, esteem, and self-actualization. Maslow later added a sixth and arguably ultimate need: transcendence.
Economic and political mismanagement have prevented many developed countries from providing for people’s basic needs, but the global trend of poverty reduction is progressing, and it confirms Maslow’s theory: When basic needs are fulfilled, people start looking for meaning and the nature of consciousness. Making a life becomes as important as making a living.
Part 2 of this article can be found here.
No, it’s not going to happen!
No, it’s not going to happen!
You look like a missing person from mental health unit in my local hospital?!!
LOL! LOL!
First , it was, if you do not have liberal democracy you cannot think, cannot be creative, cannot innovate and therefore you cannot develop your country.
In 1947, india became the world’s largest democracy. It was supposed to be creative, innovative and was supposed to be the world’s leading dominant economy today. But it didn’t happened. Its economy 5 years ago was less than half of germany’s or japan’s.
Instead of going into the voodoo stuff, mr krikke, india’s problems are very clear and present, its structural and systemic. First, it is still very much a feudal society deep down. The caste system is still very much evidently in practice today. Second, corruption is part and parcel of the system. In china, corrupt politicians in the highest echelons of power were and are still being brought to justice and locked up for good. In india, if you have the political power, money and/or connnection, you can always exile yourself to some western countries to enjoy your stolen loot. Third, india’s economy is control by a coterie of big businesses and powerful political parties. This created a chasm between the poor and the extremely rich. No less than 300,000 indian farmers had committed suicide since the late 1990’s because they cannot pay rents, buy fertilisers and afford expensive irrigation.
It is still relying on crumbling british era infrastructure to power its economy. Picture the overflowing trains and derailments which occur like clockwork every year. More than half of its population still survive on less than USD2 / day. Some have resorted to eating rats.
As for AI, don’t bet on it. I used to hire indian software developers. They came with impressive masters and PhD degrees but can’t write a line of bug free code if their lives depend on it. But they are good at asking for salary advance, spotty attendance and job hopping.
LOL! LOL!
First , it was, if you do not have liberal democracy you cannot think, cannot be creative, cannot innovate and therefore you cannot develop your country.
In 1947, india became the world’s largest democracy. It was supposed to be creative, innovative and was supposed to be the world’s leading dominant economy today. But it didn’t happened. Its economy 5 years ago was less than half of germany’s or japan’s.
Instead of going into the voodoo stuff, mr krikke, india’s problems are very clear and present, its structural and systemic. First, it is still very much a feudal society deep down. The caste system is still very much evidently in practice today. Second, corruption is part and parcel of the system. In china, corrupt politicians in the highest echelons of power were and are still being brought to justice and locked up for good. In india, if you have the political power, money and/or connnection, you can always exile yourself to some western countries to enjoy your stolen loot. Third, india’s economy is control by a coterie of big businesses and powerful political parties. This created a chasm between the poor and the extremely rich. No less than 300,000 indian farmers had committed suicide since the late 1990’s because they cannot pay rents, buy fertilisers and afford expensive irrigation.
It is still relying on crumbling british era infrastructure to power its economy. Picture the overflowing trains and derailments which occur like clockwork every year. More than half of its population still survive on less than USD2 / day. Some have resorted to eating rats.
As for AI, don’t bet on it. I used to hire indian software developers. They came with impressive masters and PhD degrees but can’t write a line of bug free code if their lives depend on it. But they are good at asking for salary advance, spotty attendance and job hopping.
More Brahmins will supervise the US Fang for sure.
More Brahmins will supervise the US Fang for sure.
Empire moves west
Empire moves west
Right…well said.
Right…well said.
It’s quite normal for a Chinese to write such criticism.India was slow to rise to its socialidtixsvoatters but has broken the shackles and is rising at great speed unlike China that needed outside support to pull it out of servitude.
India’s IT and Scientific manpower is miles ahead of the Chinese , it is only a matter of time when in a few years it will emerge as a potential power on its intrinsic strength unlike China that rrkued in outside support and still do.
It’s quite normal for a Chinese to write such criticism.India was slow to rise to its socialidtixsvoatters but has broken the shackles and is rising at great speed unlike China that needed outside support to pull it out of servitude.
India’s IT and Scientific manpower is miles ahead of the Chinese , it is only a matter of time when in a few years it will emerge as a potential power on its intrinsic strength unlike China that rrkued in outside support and still do.
You can do better than that!
You can do better than that!
Consider China 50 years ago. It experienced the horrors of the Cultural Revolution. If people had predicted China would be the leading industrial country by 2018, they would have been consided ill-informed.
Consider China 50 years ago. It experienced the horrors of the Cultural Revolution. If people had predicted China would be the leading industrial country by 2018, they would have been consided ill-informed.
Can you be more specific?
Can you be more specific?
Quem Fam About half of my colleagues are in or from India. They are extremely hard working – pretty much all of them – and most are extremely intelligent – not a surprise since we get to select from a large pool. I’ve always enjoyed and valued them as colleagues and I think most of them feel that way about me.
As for the caste system – it’s still hugely in the way, but capitalism and urbanization have done more in 25 years to dismantle the system than anything else has in the last 3000 years. I think it will take a LONG time to dismantle it in the countryside, but it will eventually happen, if not all the way, then the majority of the way.
And China has to deal with obstacles that are at least as large – 3 enormous upheavals (maybe more) from 1930-1980 that still affect them, plus having to dismantle or somehow render irrelevant gigantic state-run enterprises that once owned the country and are still powerful and in the way – along with dealing with children of the old guard, like Xi, who may think power is more important than progress.
And India has demographics, plus the second largest English speaking population in the world, on its side. What I’m not sure about is how that many people can sustain themselves at a high level in a land area about the size of the US east of the Mississippi.
Quem Fam About half of my colleagues are in or from India. They are extremely hard working – pretty much all of them – and most are extremely intelligent – not a surprise since we get to select from a large pool. I’ve always enjoyed and valued them as colleagues and I think most of them feel that way about me.
As for the caste system – it’s still hugely in the way, but capitalism and urbanization have done more in 25 years to dismantle the system than anything else has in the last 3000 years. I think it will take a LONG time to dismantle it in the countryside, but it will eventually happen, if not all the way, then the majority of the way.
And China has to deal with obstacles that are at least as large – 3 enormous upheavals (maybe more) from 1930-1980 that still affect them, plus having to dismantle or somehow render irrelevant gigantic state-run enterprises that once owned the country and are still powerful and in the way – along with dealing with children of the old guard, like Xi, who may think power is more important than progress.
And India has demographics, plus the second largest English speaking population in the world, on its side. What I’m not sure about is how that many people can sustain themselves at a high level in a land area about the size of the US east of the Mississippi.
The world as we know it will not be here in 50 years. Chairs on the Titanic discussion above. Would explain but it’s a "casting pearls before swine" analogy. LOL, who wants to waste time on people who won’t listen to the obvious? When the dung hits the fan, then you’ll know, but by then…
The world as we know it will not be here in 50 years. Chairs on the Titanic discussion above. Would explain but it’s a "casting pearls before swine" analogy. LOL, who wants to waste time on people who won’t listen to the obvious? When the dung hits the fan, then you’ll know, but by then…
Quem Fam Comrade, please learn to speak English. -0.5RMB for you
Quem Fam Comrade, please learn to speak English. -0.5RMB for you
I didn’t see it noted in the article but another factor is the change in global perception that will happen (if my math is correct) in the spring 2019 when the population of India surpasses China to make it the most populous country in earth.
That will catch the attention of much of the world outside of Asia and along with its democracy and ability to communicate in English will alter the geopolitical balance in ways that are difficult to predict other than to threaten chinas overblown opinion of itself and it’s rank among nations.
I didn’t see it noted in the article but another factor is the change in global perception that will happen (if my math is correct) in the spring 2019 when the population of India surpasses China to make it the most populous country in earth.
That will catch the attention of much of the world outside of Asia and along with its democracy and ability to communicate in English will alter the geopolitical balance in ways that are difficult to predict other than to threaten chinas overblown opinion of itself and it’s rank among nations.
The issue was briefly mention, Gord.
"Demographics will play an important role in the development of China and India in the coming decades. China is aging more rapidly than almost any country in history."
The issue was briefly mention, Gord.
"Demographics will play an important role in the development of China and India in the coming decades. China is aging more rapidly than almost any country in history."
Jan Krikke Don’t tell me U have the same problem !!
Jan Krikke Don’t tell me U have the same problem !!
bring back rajapaksa
bring back rajapaksa
The problem with all such types of growth is that they are contingent, figuratively as will as literally speaking, on sacrificing a country’s seed corn to do so: their communities and cultures, localized skills and knowledge, their genetic, ecosystem and cultural diversity, their soils, air and water, the physical and mental health of their peoples, their other non-renewable resources, and the ecosphere generally. It is all contingent on fossil energy, and as that decreases all human civilization will return back to earlier constraints but far more impoverised for living on this planet than before the fossil energy era. The history of such "fossil capitalism" is going to be a flash in the pan in the longue durée.
The problem with all such types of growth is that they are contingent, figuratively as will as literally speaking, on sacrificing a country’s seed corn to do so: their communities and cultures, localized skills and knowledge, their genetic, ecosystem and cultural diversity, their soils, air and water, the physical and mental health of their peoples, their other non-renewable resources, and the ecosphere generally. It is all contingent on fossil energy, and as that decreases all human civilization will return back to earlier constraints but far more impoverised for living on this planet than before the fossil energy era. The history of such "fossil capitalism" is going to be a flash in the pan in the longue durée.