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February 08, 2005
China and India: A Tiger Overtaking a Dragon
“The inhabitants of India and China make up two fifths of the world’s populace,” noted Dr. Wolfgang Schürer at a February 7 talk at The Fletcher School, and growth in both countries “will challenge all of us—regardless of where we live—to [develop] a new assessment process.”
Introduced as “an astute observer and analyst of international trends” by Stephen Bosworth—Fletcher School Dean and longtime friend—Schürer is currently the Chairman of the Board of Directors and CEO of MS Management Service AG in St. Gallen, Switzerland as well as a member of the Georgetown University School of Foreign Service’s board of overseers.
Schürer’s talk, “China and India: A Tiger Overtaking a Dragon,” was part of The Fletcher School’s Charles Francis Adams Lecture Series.
In geopolitical terms, Schürer began, China is currently the stronger power. But the emergence of a strategic partnership between the two countries is extremely significant, considering that their combined economic growth could soon exceed the combined Gross Domestic Products of the world’s top five industrialized nations.
Nevertheless, both China and India face significant economic, political, and social challenges.
Both countries have relatively weak financial and banking sectors, and must figure out how to deal with “spectacular cases of mismanagement.” Moreover, bureaucratic corruption runs rampant in both India and China. In India, corruption undermines the quality of the existing rule of law; in China, “bureaucrats remain the gatekeepers, but a different entrepreneurial spirit exists in China compared to in India,” Schürer noted. “India has—until recently—long neglected its entrepreneurial elite.”
In addition, India’s problems with the disputed Kashmir region persist, risking “uncontrolled escalations.”
All the same, Gregory Dimitriadis (MALD ’06) expressed concern that countries in the European Union were underestimating the sustainability of India, and investing disproportionally in China.
“Modern strategizing is only qualitatively acceptable if you diversify risks,” Schürer responded. Each investing nation should make it “an imperative” to engage in both China and India. Investment in one does not make it impossible to invest in the other, and “China would not expect people only to invest in it.”
It is important, Schürer concluded, not to confuse financial strategizing with soft policy choices.
Both countries are “keen to play a bigger role on the world stage,” Schürer explained, “but…China is more determined to do so.” However, China faces future challenges that India does not. “Down the road,” he warned, “China’s age pyramid will be turning upside down while India’s will remain relatively normal.”
Additionally, China must deal with a growing AIDS epidemic. Similar pandemic developments are likely to emerge in both countries, and they are likely to have significant international implications.
Base premises for tomorrow
The single biggest factor that will affect all countries, according to Schürer, is energy. The quest for energy security has accelerated and stakes have risen – the prominence of this matter will only grow in future.
And Chinese dependence on oil is unlikely to change. “We will see new layers of global economic interdependence—shifting centers of gravity that will force governments to make new choices in next decade.”
There is probably no grand rivalry between China and India, Schürer concluded; “the fundamental question is not whether the Tiger will overtake the Dragon, but instead whether the rest of the world will be able to deal with the two rising powers.”
Article by Claire Topal, MALD '05
Posted by jessica at February 8, 2005 01:13 PM
