Abstract
China and India are being widely recognized as rising powers in the 21st century. With its track record of fast economic growth in the last two decades, China is already a global economic power. Based on India's more recent growth performance, India is steadily catching up with China as an economic power.
Despite fundamental differences in their political systems, both countries have acquired rising economic power due to open market economy-oriented reforms. China has the advantage of an earlier start than India in this respect. China started its economic reforms in 1978 and India in 1991. These economic reforms have miraculously transformed China into a global economic power. Although politically constrained, economic reforms have helped India to improve its growth trajectory and to further integrate with the global economy.
China and India have been following different paths for managing their rising power:
China has been credited with carefully evolving a grand vision and a grand strategy for transforming it into a ‘global power’ by the year 2020 (or so). Pragmatism and effective political will have been the hallmarks of the ‘calculated strategy’ adopted by China to achieve this objective. India's economic power has been rising more due to the impulses generated by its entrepreneurs especially in the knowledge-intensive services and industries than due to its government's pursuit of a well-thoughtout grand vision and grand strategy for becoming a global power. Currently, China is nearly two decades ahead of India in moving towards acquiring significant global power.
The author's analysis of the existing and projected strengths and weaknesses of both countries in this paper leads him to the conclusion that both the countries have the potential to become global powers — China most probably by the year 2020 and India by the year 2050.
Further analysis of the existing and potential complementarities and competition in the economies of China and India indicates that there is a tremendous scope for forging mutually beneficial strategic partnership between them. A very useful beginning can be made in this direction by establishing mutually rewarding strategic alliances in these two countries at the business-to-business level. Progress in this direction can be expedited by supportive government policies and procedures.
Despite the existing deficit of political trust between India and China, the two countries have recently agreed to become strategic partners. Concrete moves towards operationalizing this strategic partnership can be initiated in two areas identified in this paper. These are:
strengthening cooperation at the international level for enhancing national energy security further cooperation in negotiations at the World Trade Organization and other multilateral forums for collectively promoting the interests of all developing countries in the emerging new international trade and investment order.