Authoritarian regimes like the People’s Republic of China present a far greater challenge and a potential threat to democracies like India than most people believe.
The greatest threat posed by China is the effectiveness of its government in economic matters. China now has the world’s second-largest economy with a gross domestic product (GDP) of $12.7 trillion; that is growing at a rate of around 6.5% a year, Bloomberg reported. If present growth rates continue China’s economy will be larger than that of the United States of America in 2028; just 10 years from now.
China will have a GDP of $23.9 trillion compared to the United States’ $23.6 trillion, Bloomberg estimated. By 2040 China might have a gross domestic product of $50.9 trillion; or $20.9 trillion larger than America’s projected GDP of $30 trillion.
This puts India at a disadvantage; because its economy; may not overtake that of the United States until around 2040 or reach the $50 trillion level until around 2050, Price Waterhouse Coopers’ The World in 2050 report predicted. The disadvantage in the short term is worse; because projections call for India to have a GDP of $8 trillion in around 15 years (about 2032).
India had a GDP of $2.439 trillion 2017 that is expected to grow to $2.2654 trillion in 2018, Statista reported. Even at an economic growth rate of 8% it will take decades for India to catch up either China or the United States.
The Real Problem for India, China’s Economy works better
This puts India at a disadvantage when seeking alliances or economic relationships with other nations. Those countries leaders’ will say, “why should we listen to India, China has a better system.”
A greater dilemma is posed by the nature of China’s government which is a Leninist technocracy. Soviet founder Vladimir Lenin envisioned a government of experts that would direct all areas of the national life. The Chinese have dispensed with Lenin’s economics; Communism, but kept his system of government.
This poses a grave threat to both the United States and India, because China has achieved a level of industrialization, exports, and economic growth that exceeds America’s. The US economy was growing at a rate of around 2% in 2017, China’s at a rate of around 6.9%.
The Soviet Union ultimately failed because its economy was dysfunctional. China’s economy seems to be functioning at a higher level than America’s. Although India’s current level of economic growth, around 7.2% in January 2018 is higher than that of China.
The lesson China is teaching the world is a bothersome one: democracy and economic growth are incompatible. Would be autocrats like Vladimir Putin, are getting the lesson that autocratic government is the key to economic growth.
The big challenge for Indian leaders over the next decade will be to counter this narrative. It will be difficult, because China will be able to show off glittering new cities, incredible feats of engineering such as high speed rail lines, and growing prosperity.
An even greater problem is that the Chinese narrative will have little appeal to Indian voters so most Indian politicians will ignore it. The real danger will come in places like Africa, Latin America; and possibly Pakistan, where local leaders will try to imitate the Chinese success.
How China can dominate the world’s Economy and politics
A danger that both India and the United States face, is being shut out of many emerging markets by local pro-Chinese autocrats. The threat is far graver than the one posed by the Soviet Union during the Cold War, because that nation never possessed a working modern economy.
China is in a position to bribe peoples in other nations with piles of consumer goods they really want, rather than weaponry or copies of The Communist Manifesto. It is also fast becoming the world’s biggest market for many raw materials, as well as the world’s largest supplier of consumer goods.
A long-term threat both India and America need to consider is China trying to monopolize aspects of international trade in the way the British did between World War One and World War II. Other dangers include the dependence of American and Indian business on the Chinese market.
This might start influencing political decision making. An example of this might be U.S. President Donald J. Trump’s decision to adopt tariffs that can trigger a trade war with the European Union – but not China. Trump placed a 25% tariff on steel imports the US, China is responsible for around 3% of US steel imports.
A grave danger here is that China’s competitors will destroy each other in pointless trade wars trying to control the percentage of trade not dominated by the People’s Republic. Another is that business interests beholden to China might be able to dominate or influence decision even in the largest economies.
China is more than just a successful competitor to India. It is a grave ideological and political threat. If India’s leaders fail to understand that they will place their nation at a grave disadvantage in the emerging world order of the 21st Century.