The Rise of China and India

Over the past decade or more, a great deal of attention has been focused on the rise of China and India, especially the economic and security dimensions of their emergence as significant players on the world stage. One of the motivations behind this growing interest in the two Asian countries is a desire to understand the impact that their dynamic economic growth is having on the international political economy. Some in the developed world worry that the rapid economic growth in the world's two most populous nations, and their voracious appetite for natural resources, will push the global prices of essential commodities higher and add to the cost of living pressures for consumers in other parts of the world. Others worry about losing their jobs as domestic manufacturers move production offshore to China and companies outsource their back-office operations to India. Such concerns reflect a view of the international economy as a zero-sum game. The reality is much more complex. The emergence of China and India as economic giants in Asia presents the rest of the world with both challenges and opportunities. The balance in this regard for individual countries depends on a number of factors, including their competitive position in the global economy, the strengths and weaknesses of their economic structures, the openness of their economies, and the quality of their infrastructure and institutions. Given the critical importance of access to natural resources for China and India, the resource-rich countries such as Australia and Brazil are in a particularly strong position to benefit from their economic rise. However, like every other country, they also face challenges from these rising powers…