• Jack Evans

China vs India: The Race for Superpower Stardom

Hosting almost 2.8 billion inhabitants, over a third of the global population, India and China have catapulted Asia on to the global scene. Through newfound industrial connectivity, increased economic influence, and a diffusion of their starkly unique cultures have developed them into potential future superpowers, thus raising questions over the strength of their economies. It was recently estimated by the World Bank that China’s economy is set to become the World’s largest by 2028, making the topic of this article very pressing for all nations.

Following the country’s rapid industrialization in recent decades, the Chinese government look to expand their sphere of economic influence by entering foreign markets. This is particularly on show in Africa. The road and belt initiative aims to implement the infrastructure needed to transport valuable rare earth minerals, such as the cobalt from the DRC used commonly in the production of smartphones, simultaneously building socio-economic relationships with developing nations in Sub-Saharan Africa. Microchips now stand as China’s second most imported product (7.6%) behind crude oil. This in turn bolsters other aspects of the country’s economy, such as the technology industry. In addition, computers and telephones comprise over 15% of all China’s exports, thus creating a sizeable cycle of income. China are not only looking elsewhere for resources, but for trading opportunities too. China have looked south to Gwadar and Karachi in Pakistan, building a port and airport in each. To this day, the Chinese are still wary of the implications that shutting the Straight of Malacca would have on their trade networks, therefore they see the Indian Ocean as a secure, less risky area for commerce. With China creating healthy relations with Islamabad, supplying investment, employment and infrastructure, the Indian government is concerned that their ‘so-called’ market share of Southern Asia may rapidly be diminished. If China continues in their ‘neo-colonialism’ of Africa and Indian Ocean nations at the current, dizzying rate, expect the Chinese economy to thrive in future decades.

Both India and China are trying to activate their superpower status through military means, and once more the two are taking incredibly different approaches. Of the two, Beijing is being far more aggressive in its tactics, holding the ruthless edge on strategy geopolitical journalists have become accustomed to. Such actions are aggravating their local neighbours. Every small rock protruding from the water’s surface stakes a claim, with the prospect of a diameter of 200 nautical miles in fishing and drilling rights being extremely attractive for any government. The way the Chinese have seemingly bombarded into proceedings has upset important players in the region, however. Beijing are at a crucial stage in their quest for superpower status, Beijing are formulating their blue water navy. Developing a blue water navy is vital for China moving forward, as they look to seize and protect the South China Sea from possible competitors. Whist there is the Chinese belief that this is a defence of their rightful assets, western democracies such as the US see this as ‘expansionist’ and ‘aggressive’. Military bases are also a fulcrum of the issues and conflicts arising in the South China Sea, with chains such as the Spratly Islands and Fiery Cross Reef being at the epicentre of such tension. At first glance, a formidable military force does not seem to be at the forefront of the Indian government’s mind, but that looks to change now the Chinese are becoming amicable with Pakistan’s, India’s notorious foes. The Chinese expansion has been dizzying in the last two decades, and now they have spread their influence and expertise into India’s backyard. India have started to look towards setting up their own competitive blue water navy by 2030, and to develop it into one of the World’s strongest by 2050.

As China have been looking out, India seem to be inviting western industries in. Cheap labour and low taxes have attracted many TNC’s to base production there, subsequently raising ethical concerns over sweatshops and exploitation. China witness this to some extent too, but India have been the focus of the global shift alongside neighbouring Bangladesh and South East Asia. The global shift describes the relocation of the global economy’s epicentre from the US and Europe to the Tiger economies of Asia. The global shift could benefit India greatly as their population demographics seem suited to this newfound commerce. The nation has a young population, with many working in the secondary sector, and many speak fluent English and have a graduate education. As of 2020, 37.4% of the Indian population are ages 0-19, thus explaining the economic opportunities presented. Despite this, there are concerns over the social impacts an influx of highly polluting industries will have on India’s densely-populated urban areas, most notably Mumbai and Kolkata. More factories inevitably produce environmental issues, given their vast outputs of harmful pollutants. Many harmful chemicals enter vital waterways, inducing the risks of water-borne diseases and water insecurity. This is seen often in India’s dense slums, one of which being Dhavari in Mumbai. The global shift is set to aid India’s Journey of development, but there are worries that the current economy and levels of infrastructure on show are inadequate to cater for India’s sprawling population, which is predicted to become the World’s largest by 2030.

The US is a big market for the Chinese and Indian economies, with the Americans being the recipients of 19% and 12% of their respective exports. During the Trump administration’s stint in the White House, Sino-American tensions have been the most serious in history, thus leading to a trade war sparking out, aggravating both parties. The US have been planting tariffs and quotas on Chinese goods, making them more expensive reducing the spread of Chinese influence. In coming decades this will likely reduce the chance of a Chinese Hegemony in 2050, instead creating a bipolar world where there are two predominant superpowers. Both India and China boast contrasting political systems. Delhi is a democracy and Beijing is a single-party, communist government. Many Chinese businesses and their assets are state-owned, and government will often have power for many decades, rather than a few years. In short, politicians in democracies, where there is commonly a limit to how long one can remain in power, are short termers – as they try implement policies quickly and effectively to bring immediate change. As much as democracy is favoured by most, it could come to slow India’s development, as politicians are unable to lay down plans for far in the future. To plan for 2030 is semi-possible at best, to plan for 2050 is unfeasible. Being a single-party state, China can look far further ahead at their road of development, as they have done over the last 30 years to make them the emerging superpower we acknowledge today. India’s poor political tensions in the region, most famously the bitter dispute with Pakistan over Kashmir, will divert focus from the vital economics of the nation, and finance may be diverted from tackling India’s expansive poverty to a defence budget. India has nuclear weapons, leaving them on the radar of many nations worldwide. India’s second conflict is against the Chinese themselves, yet it seems unlikely that full-scale war will ensue given the inhospitable conditions of the Himalayas. The third is also with China, yet this is over a clash of influences rather than armies. South-East Asia and its Tiger economies act as a battleground for the two, as both vie to improve their market share there.

Both governments, the Indian being a democracy and the Chinese a single-party state, have put up red tape on their markets, making it significantly difficult for foreign TNC’s, supermarket giants Tesco and Carrefour for example to gain a profitable market share. India have instated many policies which are detrimental to such western companies in order to protect smaller Indian businesses, whereas Beijing have made it clear that most western TNC’s will have to form a partnership with a Chinese business to set up enter a market there. Arguably China are in a far more comfortable position to block off western interest, with their GDP (approximately $9 trillion) being over 4 times the size of the Indian economy (around $2 trillion). The World Bank’s 2013 doing business rankings explains that it is slightly harder to set up a business in India, and is substantially harder to enforce contracts. This shows how India has somewhat neglected foreign interest, instead allowing TNC’s to just use Indian services (e.g. call centres) rather than enter the market. Most outsiders believe that this is currently of detriment to the Indian economy, but It could make India self-sufficient in future, operating without the risk of foreign investors pulling out or damaging tariffs/quotas. Across the Himalayas, Beijing operate in a more welcoming manner, but there remain many strings attached. The Chinese have set up SEZ’s like Shenzhen and Shanghai to invite FDI to the country, bolstering their economy in the meantime – a very contrasting outlook compared to their one on the incoming diffusion of western cultures, which has led them to ban Google and Facebook.

When looking at demographics, the race between India and China looks to take another interesting turn. As noted above, 2015 saw 14% more Indians were in the 0-19 age bracket than that of the Chinese population, suggesting that come 2050 the Indian population will be better suited to the requirements needed for their economy to thrive, in turn boosting development. Add this to the statistic that India will become the most populated country on Earth by 2030 and the economic projections become a lot clearer. China’s ageing population, bought upon by the infamous one child policy of the 1980’s, is unlikely to cause serious issues in 2030, yet by 2050 many people born in this period will be entering retirement, potentially creating a shortage of workers to keep their booming industry afloat. This will eventually damage the Chinese economy from steep rises in social and healthcare expenses. India’s youthful, educated workforce may become the factor that keeps the subcontinent in the hunt for superpower status. India’s population growth risks being detrimental however, as increased pollution and increased water consumption per capita may hurt agricultural industries, once more holding them back from their desired superpower dream. China can mitigate this by encouraging population growth, as countries such as Japan and Italy have done, yet this could exacerbate the current, dangerous levels of pollution that endanger urban populations on a daily basis.

In conclusion, both economies are at a crucial stage in their development, but both are taking starkly different approaches. China are inviting companies into SEZ’s but are also becoming the centre of conflicts, most notably the trade war that ensued with Trump’s America. India on the other hand stand more reserved, looking to improve their own secondary sectors before others enter the fray through outsourcing. The positives of the Chinese economy derive mostly from Beijing’s endless endeavours to reach out to other regions, such as Africa. This in turn poses the opportunity for China to become a (neo)colonial power, operating revenue streams from multiple different sources. The blockades to westernisation in place may anger the other big hitters of the global economy, especially the USA, thus reducing their negotiating power in future. India has a longer road ahead, but the heaving subcontinent possesses the same opportunities for success. Their exuberant, youthful population open many economic doors, giving India one of the highest industrial outputs across the globe, yet it remains held back by poor transport and energy infrastructure, critical levels of poverty and the risk of possible resource shortages in future. China’s population is older, wages are high, and pollution levels are some of the worst worldwide, but it seems to be them in the lead on the contentious, economic race between the two Asian heavyweights. Both may become superpowers in the future, replacing the current American hegemony with a Unipolar world consisting of Asian BRICS nations, however the stronger Chinese economy looks to be the best suited candidate to challenge the US’ status.

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