The Elephant and the Dragon by Robyn Meredith

This article was inspired by Robyn Meredith's The Elephant and the Dragon . If you enjoy this article then consider purchasing or borrowing the book.


How India and China’s Growth Affects You

“As China has famously become the factory of the world, India is becoming the world’s back office.”

Though India has always been strongly capitalist, its communist neighbor, China, reached an “industrial revolution” more quickly. In 1978, China’s communist government decided to lift restrictions on business for the sake of the nation. Since 2003, hundreds of thousands of manufacturing plants have been built in China.

Realizing that economic reforms were necessary, India discarded unneeded bureaucratic restrictions in 1991. Following China’s lead India contributed to the global economy, and today these two nations are “the fastest-growing big economies in the world.” Though the West benefits from low-cost products, jobs have been taken from its nations, and pollution has rapidly increased in Asia.

From 1949 to 1976, Mao Zedong, China’s communist leader, ran the nation’s economy into the ground. Peasants revolted against the collectivized farming strategy of Zedong’s in 1978. After the farmers’ crops produced yields four times as great as before, China’s new leader, Deng Xiaoping reformed farming nationwide. Overtime, china would form itself into a superpower, as their “export-friendly” economic framework attracted the business of Western companies.

Even though the communist leadership in China has generated economic success for many of its citizens (according to Merrill Lynch, China has 320,000 millionaires within its borders), it continues to violate the rights of its citizens, as religion and free speech are oppressed.

India’s history differs radically from China’s. Having been a British colony in the past, India has a heritage of English influence. Today over 100 million Indian citizens can speak English, causing the nation to become a popular call-center for Western nations. Indians have demonstrated many skills, taking white-collar jobs from Americans.

By 2015, 3.3 million American jobs will move overseas. Approximately 80% of the 500 largest companies have outsourced their “middle-class work” to India. With a population that will reach 1.45 billion people by 2030, India is trying to find jobs for its workers, as 70% currently live in outdated villages. Unlike communist China, India is a democracy, which will persuade its workers to find better opportunities rather than forcing work on them.

According to current estimates, if China and India started consuming the same amount of petroleum as the United States, than there wouldn’t be enough left for the rest of the world. Pollution levels are steadily rising in India and China, which will affect the rest of the globe eventually.

Rather than trying to outcompete India and China’s current industries, Western nations must find innovative ways to provide jobs for their citizens. Only new types of industries will be able to provide jobs, as outsourcing to these Asian nations has become unarguably convenient and profitable.

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