The Hype on the Rise of China and India

Is the India and China hype true?

Japan Times

Today it has become commonplace to speak of India and China in the same breadth as two emerging great powers challenging the two-century-old Western domination of the world.

How justifiable is the hype on their rise? The future will not belong to China and India merely because they have a huge landmass and together make up more than a third of humanity. Being large in size and population is not necessarily an asset.

In history, small, strategically geared states have wielded global power. The colonial powers that emerged in the 18th and 19th centuries were led by small Britain and included tiny Portugal and the Netherlands.

For analysts, it is tempting to make long-term linear forecasts on the basis of current trends. But such projections in the past have rarely come right. Remember the popular concerns in the United States in the 1980s that a fast-rising Japan threatened America’s industrial might?

The reason why such predictions have come wrong is that statistical probability — the sole tool in forecasting — has little application in strategic analyses.

The straight-line projections on the economic growth of China and India may be too one-dimensional.

Goldman Sachs, for instance, forecasts that China’s economy will surpass the U.S. economy around 2035 and that India will do so a decade later.

This could happen but it is hardly certain. To be sure, economic growth is essential to underpin political and social stability. It is doubtful the Chinese Communist Party’s monopoly on power will survive without it continuing to deliver high economic growth. But such growth in any country hinges on several factors, endogenous and exogenous. One factor beyond the control of policymakers in India and China that could slow economic growth and create major policy challenges for them in the years ahead, for example, is climate change.

China and India, of course, have history on their side. These two were the world’s largest economies for centuries up to 1820, after which they went into sharp decline due to their failure to catch up with the industrial revolution and by making themselves easy prey for European colonial interventions.

But world history is replete with instances of small states made powerful by farsighted policies and big states unraveled by weak, unimaginative leaders.

China certainly has a more forward-looking leadership than India, even though Chinese leaders, lacking popular legitimacy, tend to be more insecure. India has to pay a "democracy tax" that weighs down its decision-making and slows its economic development.

When one examines natural endowments — such as arable land, water resources, mineral deposits, hydrocarbons and wetlands — the picture that emerges is not exactly gratifying for India and China in order for them to achieve enduring great-power capacity. Bounteous natural capital is critical for a country to sustain national strength over the long run.

India and China together have more than 35 percent of the global population — or eight times the number of inhabitants in the U.S. — but just 60 percent more usable arable land than America.

The two giants would have had a better balance between land size, population and natural resources had their populations been much smaller. But even as India still adds nearly a million people a month despite a slowing fertility rate, some Indians cheer the "demographic dividend" that awaits their youthful country while the developed world ages. Failure has come to be identified as a success.

At a time when the world is confronting an energy crisis — symbolized both by the spiraling price of crude oil and gas, and the buildup of planet-warming greenhouse gases in the atmosphere — India and China stick out for their fast-rising dependency on energy imports and growing contribution to carbon-dioxide emissions. Their energy dilemma causes a growing burden and threatens to slow down their economic rise.

Constraints on resources are likely to become pronounced as more and more Indians and Chinese gain income to embrace modern comforts in everyday life — from gasoline-fueled transport to water-guzzling gadgets like washing machines and dishwashers.

The global demand for resources is set to soar, along with their prices. But unlike the choices that the old economic giants had in their path of development — such as the one exemplified by the shift from scarce timber to abundant coal in 18th-century Britain — the emerging economic giants can avail themselves of no substitutes for some of the resources whose present demand is beginning to lag availability.

Of all the resources, the one with the greatest strategic bearing on the future prospects of India and China is fresh water.

Climate change will have a significant impact on the availability and flow of river waters from the Himalayas and Tibetan highlands, making water a key element in the national-security calculus of China and India. The Himalayan snow melt that feeds Asia’s great rivers is likely to be accelerated by global warming.

China and India already are water-stressed economies. The spread of irrigated farming and water-intensive industries and a rising middle class are drawing attention to their serious struggle over water resources.

Having entered an era of perennial water shortages that are likely to parallel, in terms of per capita water availability, the scarcity in the Middle East, India and China face the prospect that their rapid economic modernization could stall due to inadequate water resources. This prospect will become a reality if their industrial, agricultural and household demand for water continues to grow at the present frenetic pace.

Even though India’s usable arable land is larger than China’s — 160.5 million hectares compared to 137.1 million hectares — the source of all the major Indian rivers except one is the Chinese-held Tibetan plateau. While the Ganges originates on the Indian side of the Himalayas, its two main tributaries flow in from Tibet.

China’s ambitious interbasin and inter-river water transfer projects in the vast Tibetan plateau, and its upstream damming of the Brahmaputra, Sutlej and other rivers, threaten India’s well-being. If President Hu Jintao — a hydrologist by training who has served as party secretary in Tibet — begins China’s long-pending project to divert the waters of the Brahmaputra northward to the parched Yellow River, it would constitute the declaration of a water war on lower-riparian India and Bangladesh.

Water is likely to become a cause of Sino-Indian tensions, reopening old wounds and bringing Tibet to center stage.

Asia’s economic rise and the ensuing shifts in international power equations foreshadow a world characterized by a greater distribution of power. But the hype on China and India needs to be tempered by geopolitical realism centered on a careful assessment of their long-term potential to build and sustain comprehensive power.

Brahma Chellaney, a professor of strategic studies at the privately funded Center for Policy Research in New Delhi, is the author, most recently, of the best-selling "Asian Juggernaut: The Rise of China, India and Japan."


The Japan Times: Wednesday, June 18, 2008
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