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This essay will be assessing the global economic and environmental impact of two rising
superpowers China and India. It will point out, how both countries flourished into two
powerhouses, resulting in a great global shift of angst and scrutiny from old economic powers,
such as the United States and will critically evaluate the reaction of both demographic giants
towards the West’s dubious inspection. Firstly, one will examine the reasons and causes for the
rapid rise specifically in China and will dissolve ambiguities, such as the position of China’s
continuous authoritarian regime towards the world. Furthermore, improvements, such as the
technological development in India which allows for greater foreign investment, will be
introduced and elaborated through various examples, such as India’s smartphone revolution
(News and Rachel Chitra, 2016).
To conclude, forthcoming implications, such as the
environmental pollution will be taken under consideration and its consequences be carefully
examined.
Nowadays, the rapid growth of the economic and political impact of China and India has
become globally a significant issue of current academic and political debates (Gu, Humphrey
and Messner, 2007). This immense capability will play a significant role in international politics
and modern history (Gu, Humphrey and Messner, 2007). Yet, central to the novel is, that in
order to evaluate the economic and environmental consequences on a global scope, one must
first examine the reasons for India’s and China’s successful rise.
China resurfaced as a main player after one hundred and fifty years of being viewed from the
sight of other nations as the “fragile one”– a brief disruption in China’s long history (Shirk,
2007). For two thousand years, until the late nineteenth century when it was surpassed by the
United States, China had the globally biggest economy (Shirk, 2007).
Owing to state commission Deng Xiaoping’s new economic reforms in 1978, namely by
removing Mao Zedong’s central planning, generating a market economy, and opening the
country to the world, China has revitalised itself as a profitable powerhouse and a global power
(Shirk, 2007). China’s gross domestic product (GDP) quadrupled between 1978 and 1999
(Brown, 2000). Other economic measurements, such as stages of trade and external assets, also
ascended (Brown, 2000). In chorus, China began to renovate its armed forces and acquired the
newest weapons from other nations (Brown, 2000).
India had reluctantly begun taking foreign investment into consideration in 1991, thirteen years
after China had opened its economy. Still recovering from the early twentieth-century war for
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Student number: 1738276
independence from the United Kingdom, a planeload of India’s gold assets had been
undertaken. This was on account of new short-term loans from the West (Bardhan, 2013).
Deprived India, not capable of repaying the credits, was forced to make concessions, thus
India’s gold had been flown to London (Meredith, 2008). The International Monetary Fund
(IMF) stood ready to help with a bailout, but only if India agreed to a number of reforms
(Meredith, 2008). Consequently, prime minister Narasimha Rao publicly announced an
economic crisis, and set about enforcing changes on the political and economic reforms
(Bardhan, 2013). Over the next years, the government announced a new reform almost every
week, such as creating state-owned banking, airlines, and opening oil industries to private
investors (Meredith, 2008). Furthermore, antimonopoly restrictions for large corporations were
removed and joint funds and other formal investors were allocated to buy stocks in Indian
companies on the Bombay stock-market (Meredith, 2008).
By virtue of the reforms listed above China’s economy has surpassed Germany’s in 2009 and
Japan’s in 2010 (Chunsheng, 2014). To emphasise its vast economic growth on a further level,
one must take into consideration, that China is on the upgrade of reducing its economic
dependence on other nations (Chunsheng, 2014). Generally, the world is heavily dependent on
the World Bank and other financial institutions such as the International Monetary Fund IMF,
operated by the United States (Chunsheng, 2014). This plays a part in the major issue of the
inequitable distribution of shares, such as the U.S. controlling nearly 18% of Special Drawing
Rights,
while
China
only
4%
(Chunsheng,
2014).
Consequently, China endorsed a deal with Russia, India and other BRICS nations to create a
New Development Bank and currently discusses with South Korea about setting up an Asian
Infrastructure Investment Bank (Chunsheng, 2014). With the new foundations, China is able to
counterbalance the financial domination of the World Bank and the IMF and thus represent an
encouraging
development
for
emerging
market
nations
(Chunsheng,
2014).
What is more, the International Financial System is dominated by the U.S. dollar, which results
in a situation where quantitative easing – a process of introducing new money into the money
supply by a central bank – (QE) (Oxford Dictionaries | English, 2018) and other domestic
policies of the U.S. Federal Reserve often exert a dangerous destabilising influence on markets
worldwide (Chunsheng, 2014). In 2012, US FED announced to begin reducing QE, emerging
market nations experienced market drops as well as in increases in sovereign spread, a measure
of the risk involved in lending to a given country (Bowles and Harriss, 2010). A possible
solution in reducing dependency on the dollar, the euro and other foreign currencies is the
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Student number: 1738276
internalisation of the Chinese currency renminbi (Bowles and Harriss, 2010). This process can
be reached by China adding gearing in negotiations and relieve the international markets from
destabilisation (Chunsheng, 2014).
By the same token, China is forced to work harder to improve social welfare and reduce debts,
which ensued do to credit fed to state-owned enterprise in the wake of the global financial crisis
(Reuters, n.d.). This concept is supported by the current president Xi Jinping, who fosters an
anti-corruption campaign since the year 2012. China’s status will escalate citizen’s expectations
for material wealth and continuous economic growth (Bowles and Harriss, 2010). Conscious
of society’s yearning for material prosperity and beneficial living circumstances, China started
to concentrate some of its state profits on the fitness industry and established a business
relationship with the sportswear brand Nike (Forbes.com, 2016). In 2015, the company
registered a 27% growth in its revenues from China during a six-month period (Forbes.com,
2016). The reason, why society longs for textile longing, was caused by Western globalisation,
where Western ideals were introduced to the people of China (Bagchee, 2011). This resulted in
the Chinese starting to adapt the notions of Western consumerism, pressurised by its ideology
of possessing the most expensive commodities and inheriting its impulse of vigorous
competitiveness. From this point, China was a key market for both expensive companies like
Nike and Adidas (Bagchee, 2011).
The reason for India’s rapid economic growth is not only due to its imposed reforms, but also
because of its young population (Fernando, 2016). Europe is maturing fast and America can
thank its growth on account of immigration, yet is aging, too (Fernando, 2016). This is to say,
that out of all huge economic powers, India has without question the best demographic situation
for future growth (Fernando, 2016). China’s sudden economic increase was powered by a large
group of young individuals began working at the same time and giving China an immense
workforce, and India can position itself for a similar economic benefit (Fernando, 2016).
Similarly, India has one of the world’s biggest representative governments, a country of breathtaking cultural, religious, and political variety (Fernando, 2016). This allows India to send their
concerns out into the world and adapt to altering conditions (Fernando, 2016). The process may
first appear disarraying yet it results in entrepreneurial innovation that powers improvement
and development.
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Student number: 1738276
Normally, economic power is regarded as a firm asset that mostly symbolises money, utensils,
inventory and properties owned by the business (Staff, n.d.). India’s development case,
however, can be interpreted as an execution of soft-power and to a degree, that its achievements
prove appealing to the rest of the world (Sengupta, 2018). Contemporary global outcomes of
Indian information high- technology companies such as Infosys Technologies and Wipro turned
out to be very successful (Sengupta, 2018). To further underline India’s emphasis towards
technological innovation, one can reach to the fact that other Indian companies, such as the Tata
Group and the Reliance Group accelerated into one of the biggest technological multi-national
conglomerates around the world (Sengupta, 2018). Those two groups work for over 250 million
customers across telecommunications, power, financial services, infrastructure, media and
entertainment, and healthcare branches (Relianceadagroup.com, 2008). India’s technological
development also lead to a smartphone revolution, where India’s subscriber base peaked the
one billion users point (Rai, 2016). This shift may first seem dreadful, due to the possible harm
to the eco-system and its vast global energy absorption, proved to also contain some benefits.
For instance, smartphones proved to be useful for women in rural areas, being able to sell their
nourishing commodities, such as chocolate or tea through social media (News and Rachel
Chitra, 2016).
Equivalently, pursuing a restoration in trust deficiency with countries like for example Sri
Lanka and Pakistan, India has lately intensified its economic collaboration primarily by
discussing free trade agreements (Kitchen, 2012). Subsequently, a manifestation of a bilateral
free trade agreement took place in 2000 and the Indo-Sri Lankan commerce increased in 128%
by 2004 and quadrupled by 2006, earning $2,6 billion (Kitchen, 2012).
As already mentioned above, both China and India have acquired a lot of power in the past and
with more control and authority comes scrutiny, arousing many disputes among academics and
reporters (Brown, 2000). One the one hand, witnesses declare that China and India are about to
remain the “biggest player” in the history of human race, helping developing countries to grow
with the aid of the advantages as an additional positive component in cooperation with them
(Chunsheng, 2014).
One the other hand, developed countries will doubt China’s and India’s rise and possibly see
its growth as a threat of turning into a hegemonic power (Brown, 2000). Especially the Western
countries, the United States in particular have not yet become acquainted themselves with the
fact, that another two superpowers are about to surpass their financial dominance (Chunsheng,
2014).
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Student number: 1738276
Scholars of international relations believe, that such rising powers often lead to war, often
between each other, due to high competitiveness or on a global degree with the United States
(Brown, 2000). The reason, why the West is more suspicious against China than India, is by
virtue of their China’s political circumstances. Whereas India is the biggest democratic country
in the world, China still fosters an authoritarian one-party regime and from a historical point of
view, such governmental systems often result in wanting to alter the international systems to
suit their interests (Gu, Humphrey and Messner, 2018).
This can be further emphasised by the fact that, whenever a superpower advances onto a level
of global dependence and and credence, this action normally results in causing tension from the
side of the old power (= United States) (Chunsheng, 2014). According to BBC, China overtook
the U.S. as the most successful trading country (BBC News, 2014). With over $1 trillion, China
has the biggest overseas reserves in the world (Shirk, 2007).
China is the heaviest purchaser of steel and cement (Shirk, 2007). China is the world’s largest
trading authority and exports over $200 billion more commodities and goods to the United
States than it imports from the country, according to U.S. forecasts, resulting in America’s
biggest foreign trade deficit (Shirk, 2007).
Additionally, a rising economic power mostly follows an expenditure in military dominance
and strategic power which can be viewed as provisional war plans (Gu, Humphrey and Messner,
2007). Needless to say, that other theorists remind, that mainly China has presented a tendency
to use coercion, convinced that it has been the sufferer of acts of violence and mortification –
first performed by the Japanese in the World War II and hence by chairman Mao Zhedong –
before it upgraded as a world power (Brown, 2000). Hence, there might be a possibility, that
China declare its territorial requests to Taiwan and will be entrained into a conflict with the
U.S. attempting to protect the island (Brown, 2000).
This fact, however, can be contradicted because China is clearly aware of other countries
regarding its rapid development as a threat, thus China’s diplomats started to construct its
position as a global country and territorial neighbour with moralities (Shirk, 2007). For
instance, China joined the WTO other multilateral corporations, in order to show its integration
in international affairs (Shirk, 2007). Similar to India, China has found a solution for almost all
of its border arguments by offering free trade agreements to Japan, Southeast Asia and and
South Korea (Shirk, 2007).
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Furthermore, a tripartite agreement with Vietnam and the
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Philippines has been signed to search out for oil and gas in the South China Sea (Shirk, 2007).
Most notably, China has volunteered to resolve the threatening dispute between the U.S. and
North Korea over North Korea’s nuclear weapon programme and charged sanctions on North
Korea (Shirk, 2007). This collaborative performance increased China’s international power
which lead China’s attraction in attaining a calm intercontinental environment to maintain its
economic development (Shirk, 2007).
Be that as it may, economic improvements and trade agreements do not alter the fact that the
environmental challenges by the rise of India and China are devastating (Kitchen, 2012).
The most challenging problem is the disclosure of the newest and probably most forceful longterm danger is the rapid climate-change, attributable to the accumulation of greenhouse gases,
produced by the growing conglomerates, (Kaplinsky, 2007). China’s portion of worldwide CO2
releases can go beyond 25% in 2025, the equivalent figure India is able to reach 10-15%
(Kaplinsky, 2007).
As stated by the newest evaluations by the Intergovernmental Panel on Climate Change, higher
temperatures are anticipated to produce erratic rainfall, a decrease in crop yields, downgraded
fresh water supplies, growing frequency of floods and droughts, higher risk in the spread of
diseases, and rising sea-levels across Asia (Sengupta, 2012). Furthermore, another big strait of
consequences on other economies results from environmental spill-overs (Kitchen, 2012). The
vast development in China and India eats natural assets and not only procreates cross-border
environmental damages within the Asian territory, but also destabilises the equal supply of
recourses among smaller nations. For instance, a multitude of accusations proved China’s
incidents of illegal timber bombing institutions in Myanmar (Kitchen, 2012). It is roughly
calculated, that much of the acid rain in South Korea and Japan is caused by the sulphur and
dioxide emissions from China and India. What is more, China’s and India’s looming imports
of natural expenditures from all over the world are causing environmental problems in Africa,
Latin America and the rest of Asia (Kitchen, 2012). Oil consumption is another aspect, that
must be taken into consideration; Indian’s oil industry’s transportation arm is supposed to
expand fivefold by 2030 and its main energy demand is expecting to triple by 2030. This extent
of coercion will certainly foist notable environmental costs.
It is obvious that the contemporary systems of both China’s and India’s economic development
carry notable environmental expenses and risks, including the conditions of weakening their
own future growth capabilities (Sengupta, 2012). However, there are some significant factors
that might foresee hope for both countries. For example, India and China have recorded notable
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Student number: 1738276
improvement in renewable energy sources and technologies, such as India being one of the top
global five manufacturers of wind energy (Galli et al., 2011). This process can enable the
replacement of fossil fuels with feasible options (Sengupta, 2012). Furthermore, corporations
working with sources, like steel and cement, have accomplished to higher quality standards
regarding the production processes (Sengupta, 2012).
In sum, it has been observed that economic progress also contributes to the growth of lifequality, yet only to a particular stage (Galli et al., 2011). Beyond that point, supplementary
economic growth can be linked to a decrease of life-quality (Sengupta, 2012). Ecological
conditions are essential components of economic structures, even if they are usually disregarded
by economic financial authorities (Sengupta, 2012). Unsustainable requests for power,
materials and bionetwork facilities have risky economic, environmental and social effects.
Sustainability can be executed by guidelines that recognise the presence of additional-economic
aspects (Galli et al., 2011). It is of importance, that predominantly developing countries take an
environmentally friendly route, for instance by selecting fewer energy-expensive
configurations and emphasising a balanced dispersal of assets (Sengupta, 2012). The motives
are together ecological and business-related (Galli et al., 2011).
If those principles can be followed and executed by both superpowers India and China, one
will have supplied a golden opportunity for historic collaboration to reduce poverty and to keep
up a maintenance of a healthy economy in the world (Ahamed, 2017). The trade market boosts
at manufacturing consumer commodities professionally and inexpensively, and at allocating
them rapidly on a global scope (Sengupta, 2012). The conventional depiction of an
undeveloped, poor India and the image of an underprivileged and exhausted China has now
been removed by the portrayal of a contemporary and vibrant economy currently drawing
external investors and workforces from various parts of the world (Kitchen, 2012).
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Student number: 1738276
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