The Rise of China and India—Its Implications

Abstract

The rise of China and India is a triumph of market-based economy. India is not just a small economic version of China. India is the world center of business and high tech outsource to competitively deflate business process and services cost. China becomes the factory of the world to export cheap goods to every corner around the globe. The speed of both nations to "catch up" with the advanced economy is depending on which and how technology each is embracing given their institutional constraints. "Chindia" enhances world social welfare by opening up more young and urbanized population and asserting technology innovation productively into every aspect of our every day life. This is a gigantic market opportunity. With different value, endowment and starting point, China and India have its own way of path dependent political economic progress. What is justice and fair may depend on people to decide and to choose. India's political system in federal republic parliament style is rooted in colonial legacy and non-violent belief in respect different views of multi-ethnic,-linguistic and-religious communities. Chinese effective executive branch strives for a strong nation and economic power at the expense of civil liberty. Yet, gradual economic convergence between two countries may be seen in service oriented and heavy industry areas. Divergence in income disparity, partly due to Indian ineffective administration is undesirable and partly due to Chinese high wealth and power concentration. Potentially, more balance economic development in India and more balance political evolution in China may be desirable for the world peace and prosperity as Chindia thrust forward to proclaim its rightful world leaders. Water scarcity, energy efficiency, environmental pollution, foreign reserve recycling problem and security apprehension are highlighted among potential global issues with suggestive resolutions. This is a worldwide immense challenge.