Why Chindia Will Never be the Centre of the Universe

I wrote this 12 years ago in my editorial for SME Magazine. Before Trump, before Xi and before Ukraine. ?Some of what I thought are still relevant today.

For a country that has for centuries - make that millenniums - thought of themselves as the centre of the universe, China’s ‘opening’ to the world is seen by many as the country’s attempt to gain global dominance. In fact, economists are already hailing the rise of China, and it’s neighbour, India, as the greatest thing to have happened to capitalism since the industrial revolution.

I recently attended a conference on Chindia led by Dr. Jagdish Sheth, the author of ‘Chindia Rising’ and a strong proponent of the upcoming duopoly of China and India.

Like Sheth, I believe that the rise of Chindia, and in particular China, will reshape the geopolitical and economic balance of the world. Even now, with China being the second largest, and India the fourth largest economy in the world, the two countries are having their voices heard in global forums, ranging from the United Nations to WTO, and from G20 to the World Court. The movement of diaspora, which for the past century has been away from these two countries, are now reversing, with many diaspora returning and playing various roles in Chindia, and the number of migrations to Chindia from Western countries increasing.

In essence, Chindia rising is old news. This magazine has, since 2007, been the first, and remains the only business magazine with a regular section on news from China and India. Many of us have known all along, the imminent economic dominance of Chindia. The term Chindia itself has been popular in this part of the world, long before Indian politician Jairam Ramesh usurp the term in 2005.

What is debatable and more current is whether this growth will propel Chindia into the world’s next superpower, or if it will sizzle for a while and ultimately fizzle into a missed opportunity like Japan.

Theoretically, if the American economy is to continue its decline, and China and India is to grow at the same rate over the next 40 years; then by 2050, Chindia combined will be four times the size of the US economy. But I think that’s wishful thinking.

TOOTHLESS TIGER, TAME DRAGON

Political writer, Fareed Zakaria noted in his book ‘The Post American World’ that the three power shifts in the past 500 years are the rise of the Western world (15th – 18th century), the rise of the US (19th – 20th century) and the rise of the rest (of the world) (21st century). Yet, lest those of us in Asia has this fake sense of coming grandeur, the heart of the world – political, economics, military and even cultural are still 10,000 km away in Washington DC. And despite what many would argue, that’s unlikely to change anytime soon – certainly not in our lifetime.

On top of the military and cultural might that the US will continue to wield (think super carriers and Hollywood), both China and India are bubbles ready to burst. And what do they say about bubbles? The bigger the build-up, the more disastrous the bust.

China’s problem is its ageing population – what many scientists are already calling the demographic time bomb. Not only are the whole country getting older, its fertility rate is also dropping. The curse of affluence has finally hit China – more women are working, couples are marrying later and housing costs lead to shared quarters (many of us know that living with in-laws aren’t conducive to reproduction!).

A leading Chinese sociologist told me that she fears not so much for the ageing population, but for the ‘weird’ generation that China has produced. Decades of one-child families has resulted in self-centred single children, that expect – no, demand - that the parents and all four grandparents give in to their every whim. And this very generation is entering the workforce and are now being trained to take over the leadership of the country. She said she's glad she won’t be around for very much longer to witness the disaster that’s about to unfold. Some Chinese sociologists are already predicting a suicide epidemic, as ageing and sickly elderly decide to relieve the burden of their grand- and great grandchildren.

China also faces severe water shortage; and as farmlands give way to factories, a food crisis is also imminent. China’s global search for resources is well documented, with major state-owned enterprises swallowing up mining companies in all parts of the world. But these resources are finite, and there’s only so much money can buy when the costs rise beyond what even China is willing and able to pay.

I won’t even start on India. If you haven’t done so, take the next flight to an Indian city, and you will get a good lesson on how not to run a country. Non-existent infrastructure asides, it will take a whole generation to change the cultural habits and societal structure to one that is able to support India’s dream of becoming an economic powerhouse. Sheer number will drive her growth for a while, but unless very fundamental change is made to the structure very soon, we are looking at a classic bubble-about-to-burst situation. And I don't see how the bloated bureaucracy and generally corrupt government are able to effect much change.

Chindia will rise. But don’t expect a power shift from the Atlantic to the Indian Ocean. More likely, the power will shift to the Pacific. My crystal ball says it will be a Chimerica century, rather than one with India in the same equation. The centre of the universe will remain in Washington DC for many decades to come.