By Vivekanand Pattanayak in Bhjubaneswar, March 11, 2024: China and India in the last two decades after the debilitating economic crisis of 2008 occasioned by disastrous subprime lending had become the beacon of hope of the world’s economic future. The Asian tigers who were the propellers of growth of nineties were joined by the giant Chinese panda and the rising Indian elephant to become the loping leopard of the global economy justifying the prediction that twenty first century would be the era of the Asians.

The recent trends, however, reflect that China following long drawn lockdowns after pandemic have not led the world in the global growth .It is experiencing unexpected real estate crisis and facing headwinds from Europe to export electric vehicles. The foreign direct and institutional investments to the country are declining and there is indication of US investors moving away to Vietnam, Thailand and Bangladesh.

On top of this decline there are adverse demographic tremors with China sliding down as the world’s most populous country yielding place to India compounded by the aging population and low birth rate. Further, geopolitical situation has changed in last two years since inconclusive the Russian -Ukrainian war and Israel-Hamas led Palestinian armed conflict with flexing of muscle of US with strikes on Syria, Iraq and Yemen to contain the pro-Palestinian Islamic militants allegedly supported by Iran as its proxies, and also joined by the British Royal Air force in this assault. The passage through traditional trade route between West and East, Red Sea having been highly unsafe due to Houthi aggressive interference of merchantmen, global economy has also been adversely affected with rerouting of cargo ships around the Cape of Good Hope.

China’s political proximity towards the Middle East has increased .It is closer to Iran and Saudi Arabia now than ever before. The Sino-Russian entente has become stronger in last two years thus making America less influential in the Islamic strong hold of the Levant.

The Sanghai Cooperation Organization with Russia and China being influential members also tilts geopolitical balance. BRICS has become more globally visible after its increased popularity with powerful non-Western economies making beeline to become members. Thus, the global South is expanding its heft.

China’s BRI has penetrated into continents of Asia, Africa and Latin America notwithstanding US. Whether further expansion would be possible is unpredictable. China’s presence in Italy, Greece and other Western Europe was dampened after the pandemic ,and also due to the Sino-Russian increased nexus and further aggravated in the context of its assertive approach towards Hong Kong ,considered for long as an autonomous region for global trade and business under the concept of ‘one nation and two systems.’

Taiwan is not only the cause of friction between US and China, also a factor contributing towards Europe’s alienation from Land of Confucius , once called the sleeping giant by Napoleon.

Xi is, however, preoccupied by his solitary goal to make China most advanced country by 2049, also an industrialized manufacturing hub possibly to restore the imperial glory of the Middle Kingdom. He visualizes a China of the past including Taiwan, Daiu island ,South China Sea and possibly so-called erstwhile southern Tibet. The clash in the South China sea between the Chinese coast guard and the cargo ship of Philippines will not only increase tensions between US and China inviting possible trade sanction tariff increase on the Chinese goods but will cause further irritation in Europe.
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India has made progressively spectacular achievements since last two decades having registered near two digit growth rate between 2004 and 2010 successfully achieving green, white and blue revolution becoming third largest economy of the world by PPP in March 2014 when Dr Manmohan Singh was the prime minister and its IT revolution, communication explosion ,and laurels in space sending spacecraft to the orbit of Mars even before China could reach, and its successful lunar landing have given the country great prestige .Highway construction initiated by Vajpayee greatly augmented since then ,airport constructions initiated by the States and UDAN flights started in recent times are reminiscent of the Chinese take-off of the time of Jiang Zemin.

The country once dependent upon PL 480 is now also exporting food grains to the world. India continues on the path of growth although halted during pandemic lockdown. Make in India program could not successfully attract foreign investors or even domestic entrepreneurs notwithstanding tax and incentives. India’s performance in the area of health, nutrition, and poverty index need boosting for which heavy investment is needed .Increase of debt load on national economy is a cause of concern. Periodic rise in consumer price index and high level of educated unemployment should draw attention of policy decision-makers.

Wars and sanctions on Russia have not affected flow of oil to India although the interruption of cargo shipping in Gulf of Aden is a source of anxiety. India’s naval deployment to protect the vital sea route is exposing the country to conflict. It is needless to say that proclivity of Maldives towards China will put India into a disadvantage with Chinese hold in Sri Lanka, Gwadar port and naval presence in Djibouti.

Israel’s proximity towards India is also not viewed well in the Middle East mostly among the people although the rulers in Saudi Arabia and UAE would continue to be friendly for trade, commercial and economic reasons.

From the above one can visualize how the path to Asia’s rise in future is laden with obstacles.

The Chinese leadership could have avoided muscular diplomacy around the South China Sea, and abstained from truculence towards Hong Kong and Taiwan following the wisdom of Deng. “Hide your strength and bide your time”. One reason why different path was chosen could be to get popular nationalistic support to justify an extension of tenure of leadership.

India known for decades as a secular country has witnessed Hindu religious fervour. In what way it would impact its relationship with Islamic world in the long run should be cause of rumination. Islamic countries are not confined to the Middle East. The sub-Sahara Africa has adopted Islam since long. This region being the hinterland of global south with rich mineral resources will play a crucial part in geopolitical and geo-economic power dynamics of the world. For remaining in power, politics of religion can play a role. It, at the same time, may become the source of burden on international diplomacy.

Headlines in the media do not always demonstrate the reality. This is true for democracies or other systems, more so when elections are approaching or regimes require renewal of tenures.

The European political economy is in a stalemate after Brexit and lockdowns of pandemic, two year of logjam of the Russia-Ukraine conflict with sanctions and now Israel Hamas confrontation. Europe with huge Islamic diaspora and inherited sense of guilt of holocaust is in the quagmire of uncertainty.

USA’s future global leadership role depends upon unpredictable internal politics. Weapon of sanctions may have political significance but can be counterproductive. It is sometimes dangerous as a double edged weapon.

In this volatile ecosystem, India should maintain its traditional neutral posture concentrating on domestic political , social and economic issues for reducing inequalities, poverty, and creating opportunities for employment, avoiding needless polarization on matters like religion, ethnicity and language.

China should review its external posture. For next twenty five years it should focus on status quo. Avoidance of Thuycide trap should be the priority. Both China and India can still play a joint role to bring peace and prosperity in the world provided they are able to mend fence in their political relationship. Status quo for next twenty years on the borders will enable both the nations to celebrate their centenaries with glory.