Wisconsin Public Radio

Manufacturing is still critical to the economy United States. Clyde Prestowitz, says it's time to start realizing the positive spillovers that manufacturing creates... Read more  

Events & Activities

Stephen Olson at Chinese Development Institute Conference


 Clyde Prestowitz giving presentation to CDI...


Steve Olson teaching trade negotiations at the Mekong Institute...


Stephen Olson to speak at upcoming workshop organized by the International Institute for Trade and Development on 

"Economics of GMS Agricultural trade in goods and services towards the world market"

Chiangmai, Thailand Sep 8-12.

(04/10/05) Clyde Prestowitz in Time of India

Clyde Prestowitz in Time of India
YaleGlobal Online April 15, 2005
The Time of India April 10, 2005
Times of India
Copyright © 2005 Financial Times Ltd. All rights reserved.
April 10, 2005

Vikas Singh

India and China. Two ancient civilizations, two emerging superpowers with lots of history behind - and between - them. But when Chinese premier Wen Jiabao kicked off his trip to India by flying into Bangalore rather than Delhi on Saturday, it was clear that history was the last thing on his mind.

For China-watchers, who can spend hours discussing the nuances of every signal emanating from Beijing, the message was loud and clear: "Forget about politics and the past. We want to do business together, and jointly forge a brave new world. "It's a world that the rest of the globe seems to be bracing for, albeit with some apprehension. Business tycoons, statesmen, commentators all talk about how the rise of India and China is reshaping the global order. Invariably, both countries are mentioned in the same breath. No conversation about one can end without the other being referred to. The hyphenation is complete.

Just the other day, Singapore's former prime minister, Lee Kuan Yew, who's usually been dismissive of India vis-a-vis China, told a seminar that both countries would shake the world as they spread renaissance across Asia. Microsoft chairman Bill Gates recently told a conference of US governors, "I am terrified for our workforce of tomorrow. " Pointing to the sheer number of graduates in China and India, particularly engineers, Gates warned, "In the international competition to have the biggest and best supply of knowledge workers, America is falling behind. " New York Times columnist Thomas L Friedman, author of The World Is Flat: A Brief History of the Twenty-First Century, writes. . .

. . . that "in India and China lies a tale of technology and geo-economics that is fundamentally reshaping our lives much, much more quickly than many people realize. . . " Friedman terms this new era Globalization 3. 0, a concept very similar to The Great Reverse described by economist Clyde Prestowitz . The first wave of globalization occurred in the 15th century, thanks to Portuguese and Spanish explorers. The second wave began around the founding of the US, with the onset of the Industrial Revolution. The Great Reverse began in the 1990s, coinciding with China and India getting on to the capitalist freeway.

Jairam Ramesh, author of Making Sense of Chindia, points out: "In 1950, the debate was over China or India. In 2005, the debate is on China and India. That's how far the two nations have traveled. It will be a while before they can take on the US in terms of hard or soft power. But their emergence as demographic giants and economic dynamos will have implications for the rest of the world. "

In India, the discussion has largely centered on how the two countries stack up as competition, with much breast-beating about how far behind India trails. But there's an increasing interest in the potential benefits of cooperation. Foreign secretary Shyam Saran was in Beijing recently to prepare the ground for Wen's visit. It was decided by both sides that India and China would not approach each other as rivals but as partners whose joint clout could alter the world order in their favor.

A senior MEA official says India's advances in IT software, combined with Chinese advances in hardware, could create a perfect partnership. The Chinese can learn much from India about the services industry, technical. . . . . . and managerial know-how, and developing a world-class private sector.

In comparison, India would do well to emulate the Chinese in developing infrastructure, manufacturing and providing basic education. Besides, both countries are huge markets for any number of goods and commodities. If they were to collectively negotiate, they could extract very favorable deals from most producers.

Sure, border differences persist. But neither side is getting frantic. Geographical, legal and security features are being identified. Once guiding principles are announced during Wen's visit, the two sides will probably get down to the nitty-gritty.

On other political issues, differences have narrowed. On Kashmir, for instance, China used to lend vociferous support to the Pakistani position. Today, its responses are far more nuanced.

C V Ranganathan, former chairman of the National Security Advisory Board who has also served as ambassador to China, sums up: "One of the less reported facts over the last few years has been the steady growth in understanding between India and China. China is readjusting its policies to Pakistan, so they impinge less on the growth of Sino-Indian relations. Ultimately, they want stability in this region. The issue of nuclear and missile transfers to Pakistan is more complicated. But while China will not dilute the quality of its relationship with Pakistan, the past links between the two countries are unlikely to continue. Besides, China's economic and political stakes in India have increased. "

So is the time ripe for a strategic alliance between the two countries, the creation of a 'Chindia' that could rock the world? That could be a long way away, specially given the Indian wariness about even a free trade zone. But as the Chinese proverb goes - and never was it more appropriate - "A journey of a thousand miles begins with a single step".

With inputs from Indrani Bagchi, Sharvani Pandit and Preeti Dawra

Join our mailing list

Latest Publications

The Betrayal of American Prosperity.

The Trans-Paific Partnership and Japan.

Making the Mexian Miracle.

Industrial Policy and Rebalancing in the US and China.

The Evolving Role of China in International Institutions.


Contact us

Economic Strategy Institute

1730 Rhode Island Avenue, NW, Suite 414 |  Washington DC  |  20036
Ph (202) 213-7051  |  Fax (202) 965-1104  |  info@econstrat.org