the-south-asian.com July / August 2006
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China & India - Major global economic players by 2025
First published in January 2002
A specter is haunting South Asia in Information Technology and the manufacturing industries - the specter of being dominated by US and China.
In the 1450s , the Imperial Chinese Ming Dynasty ships, under Admiral Zheng, [ the architecture of Cochin reflects this Chinese flavour ] went up from Vietnam to Java to Calicut and Cochin , to Mozambique , Zanzibar, Red Sea - Aden and the port of Jeddah and introduced the Compass to the Arabs mariners.
India’s ancient history reflects this Imperial tradition in the Mauryan Empire [300 B.C.] During the time of King Chandragupta, Indian religion of the Vedas, and Sanskrit language scripts were taken along by traders and sailors to Thailand, Cambodia, Java , and Malaya. In fact in Java, only the royalty was allowed to wear the famous Patola silks from India ..
Similarly both India and China suffered immensely under the colonial domination , so much so that their entire industries [ textiles, etc. ] were systematically destroyed by the British in the effort to dominate and control the trade. [ courtesy East India Company and China’s Opium War ] .
It is with this historical background that the current attempt by India and China to restore their societies to a respectable standing in the future should be looked at.
The Chinese arrive in South Asia:
In a startling development in 2001, Chinese manufactured goods started flooding Indian markets in major cities and trickling into small towns. Karol Bagh, and Chandni Chowk in Delhi may well become China Chowk by the virtue of the number of Chinese goods available [toys, battery cells, cotton buds, fans, toasters, bicycles] - usually via transit trade from Nepal, and the Indian customers keep coming back for more. In Pakistan , the Afghanistan and Central Asian Trade transit trade has destroyed the local air-conditioning industry, with Japanese and Chinese goods flooding the consumer markets in Bara , Peshawar, Mozang & Hall Road in Lahore and Chor Bazaar in Karachi. Indian made truck tyres are sold in Lahore’s truck shops outside the walled city gates and trucks as far as the Karakoram highway are seen with Indian Modi tyres.
Bajaj has stopped the manufacture of table, pedestal and wall fans, and has imported these from China. Only ceiling fans are manufactured in India as they are made of metal.
Chinese fans come with
built-in inverters with a 2 hour battery back-up during power failures - a
situation that the Indian consumer faces frequently. The retail price for an
Indian made fan is Rs 1,150, while imported Chinese fans cost anything
between Rs 800 and Rs 900. The ordinary ones cost Rs 400 and with duties,
the cost in India
comes to only Rs 660.
The estimated street prices for different models of Chinese motorcycles are typically:
150 cc at Rs 29000,
125cc at Rs 24000 ,
100cc at Rs 20000.
The prices are minus the import duties. Compare these figures with Bajaj's least-priced 100 cc motorcycle Boxer, which is available for a minimum of Rs 30,000 varying across states.
Bajaj has the same problem with its lack of innovative design. Its manufacture of the "Vespa" Italian scooter remained stuck to the old model ; a story similar to the Ambassador car that was a copy of the old Morris Minor engine with a rugged oversized body for the Indian market & road conditions.
But all is not lost . Industrial giants such as Reliance and Tatas have operated the most cost effective Petroleum and Steel units in the world.
Since the Balkanization of the South Asian Region by the British Colonial rule - the various nation states that have emerged - India, Pakistan, Sri Lanka , Bangla Desh, Nepal , Bhutan, Burma have been unable to set their mutual differences aside and have been dissipating their scarce resources in pointless short and expensive wars.
Meanwhile China under a very different mind set and long term strategic policies has been able to achieve considerable advancement from its pre-Revolutionary economic conditions. For a deeper understanding of this phenomenon see " Lords of the Rim" a book on the Chinese overseas communities in the Asia Pacific region and how they are so successful [ it is said overseas Chinese control assets worth one Trillion dollars] in business in countries such as Thailand , Malaysia, Indonesia, Philippines as well as in Taiwan and China.
Indians, especially those in the Silicon valley in California, have also aggressively moved to charter India’s course into an economic power. Stephen Cohen’s [ Senior Fellow Brookings Institute , Washington D.C.] recent excellent book " Emerging India" also gives an in-depth look into the Indian strategy.
Issues of Globalisation and the charter of the World Trade Organization [WTO] once again revive memories of the old colonial trade wars that were forced upon China and India to open their countries for unequal trade with the European nations.
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