India, China fusing destinies

HONG KONG: When Chinese President Hu Jintao touches down in New Delhi on Monday, he may well be struck by an amazing coincidence that fuses the destinies of China and India for the next few decades.

India is beginning to look a lot like China did just before its economy really took off; and, coincidentally, China looks like it wants to become the next India — by increasingly engaging in a democratic experiment, says an Asia watcher. 

For over three decades, the Indian economy mirrored Latin America more than the East Asian tigers, but now things have changed, says UBS chief Asia economist Jonathan Anderson. With its economy now growing at over 8 per cent, India looks like it will be the next China. And it’s all coming together for India at the right juncture, because China is beginning to lose steam. 

“For the last 10 years, China has been like an elephant riding a bicycle on a tightrope: it had to generate 5-8 million jobs a year to keep the young workers flooding out of the countryside employed,” says Anderson. But China, he adds, is exiting the tightrope phase. For the next 10 years, China doesn’t really need to generate 10 million jobs. The migrant worker story is reaching the end of its cycle, and China’s rulers will be relieved that their economic growth kept going long enough to see that phase through.

Instead, reckons Anderson, China will over the next 20 years or so be increasingly engaged in a democratic experiment.

It’s already begun, with the experiments at the village and township levels — although within an intra-party framework. And before long this should rise to the city level, he prophesies.

“What this means is that within two decades, we’re going to see China with a more vibrant political framework and democracy— even it if is nominally under the guidance of the Communist Party,” says Anderson. “You’ll see much better governance, and much better transparency.”