Moving Into a Chinese-Indian World

The IMF has allowed the Chinese renminbi to become part of its Special Drawing Right from next October, the third largest after the dollar and the euro.

China and India are both now growing much faster than the West. Their greater populations mean that their output will overwhelm the West’s well before 2100.

Their brutal realism about international economic relations, so similar to the attitudes of Britain in 1815 and the United States in 1915, will ensure their success.

Just as the 19th Century belonged to Britain and the 20th Century to the United States, so the 21st Century will belong to them – with no other obvious claimant to the 22nd.

China and India’s assertiveness, in both economic and geopolitical spheres, is reminiscent not of the hesitant Britain and United States of today, but of their activities in the period when they were rising to global hegemony, around 1815 and 1915 respectively.

Two past rising powers

Around 1815, Britain claimed the right to seize neutral merchant ships, prevent them from trading with France and collect any British citizens who might be serving on them. Its effective closure of U.S. trade through the 1807 Orders in Council was the main cause of the War of 1812.

Around 1915, the United States maintained massive protective tariffs against the world’s trade, far higher than others’ (and infinitely higher than those of the foolish free-trading Britain.)

It also built the Panama Canal and invaded Mexico and Haiti, asserting its rights in the Western Hemisphere much as Vladimir Putin does in neighboring countries today.

India follows the relatively benign model of Britain 1815 and the U.S. 1915 fairly closely. Indeed, India is not yet quite as assertive in foreign policy as was either previous emerging hegemon.

China on the other hand is in many respects more like the Kaiser’s Germany, claiming disputed areas of ocean by building artificial islands thereon. They are also building a navy that, like the Kaiser’s High Seas Fleet, can be aimed at only one other power, the existing hegemon.

Estimating future size

Economically, the case for China and India’s emergence is rock solid. According to figures by PriceWaterhouse Coopers earlier this year, even if there is considerable slowing in growth after 2020, by 2050 China will have a GDP of $61 trillion to the U.S. $41 trillion.

Meanwhile, India with GDP of $42 trillion will also have surpassed the United States to become the world’s second largest economic power.

In practice, PwC’s estimates are likely to be too conservative. Certainly its estimate of growth for the U.S. between now and 2050 is higher than has been achieved in the “recovery” from the 2008-9 debacle. Its estimates of growth for India and China both look low.

That is not to say China and India will be as rich as the United States in per capita terms by 2050, even if they grow faster than PwC estimates. Nevertheless they will be considerably richer than they are currently, especially in India’s case.

With total GDPs larger than the United States they will be able to project force more effectively than will the United States, even with the help of its NATO allies.

Russia, fading from sixth place in GDP (on a purchasing power parity basis) in 2014 to eighth place in 2050, less than one tenth the size of China, will also be a declining force internationally, even if it has managed to annex a few neighboring economic basket cases.

Anyone else coming for the crowns?

Looking beyond 2050, it is difficult to see what might dislodge China and India from their hegemony. Of individual countries in 2050, in economic terms, the fourth is Indonesia, with a GDP about 30% of the United States and double that of the largest European country, Germany.

In terms of population, China and India are several times the size of the next largest country, and will remain so, increasing their geopolitical clout accordingly.

They will still be much poorer than the United States in 2050, and so they will presumably enjoy some further catch-up in terms of wealth and living standards (and hence increase their lead in terms of raw GDP.)

India’s year 2100 population is projected as 1,600 million (1.6 billion) by the United Nations and China’s at 1,000 million (1 billion). This compares with a mere 450 million projected for the United States.

An African federation?

It is possible of course that other countries may combine, in much the same way as the EU has attempted so painfully to do.

Nigeria’s population is projected as 752 million in 2100. Africa’s population as a whole is projected to approach 4 billion, since fertility rates will remain much higher there than in other regions throughout the 21st century.

The world’s population overall is now projected in 2100 to be a grossly overcrowded 11.2 billion. China and India together will represent only 23% of the total compared with today’s 31%, thus be theoretically vulnerable to a new competitor.

An African federation, if one could be formed, would have four times China’s population and 2½ times India’s in 2100.

It might have approached those much richer countries in terms of total GDP, while remaining much poorer per capita. That would suggest that the 22nd Century might well belong to such a federation, if it came into existence.

But consider the difficulties that have been faced by the European Union. Most of those states share a common history and culture, if not language. It seems very unlikely that Africa’s 54 countries will be able to form themselves into a federation tight enough to act as one superpower.

It is of course possible that a subgroup of those countries may do so. However it would probably still lag China and India in terms of GDP, even if not in population.

Learning to live in a second-tier West

In any case, if there is to be another geopolitical transition taking place after 2100, it will be for China and India to worry about, not for us inhabitants of what will then be second-class powers.

In general, we can anticipate a transition to Chinese/Indian hegemony philosophically, if not without regret. The main difficulty will be that of having two hegemons whose emergence will not be simultaneous.

China is emerging already, whereas India requires another 20-30 years before its economic clout is sufficient to bring top-level geopolitical power with it.

This staggered emergence clearly has the potential for conflict. With today’s technology, that could greatly damage the rest of us, even if we stayed out of it directly.

Alternative hegemony paths

Transition between hegemons does not have to result in war. Britain handed over peacefully to the United States, for example. But it brings risks higher than in periods of hegemonic stability.

Politically, both China and India are at present reasonably benign, much more so than the 20th Century Soviet Union.

We should also remember that China has a history of global hegemony – and one which does not look much like European hegemons.

Imagine a Chinese regime that harked back, not to Mao or the inward-looking, progress-averse Ming and Qing dynasties, but rather to the pacific, intellectually-driven, artistically glorious and technologically adventurous Song Dynasty’s Middle Kingdom. This would be a hegemon we could all admire.

Balance that with a democratic cricket-playing India, and you have a world different from – but not greatly inferior to – the Pax Americana we imagined we had entered in the long-distant halcyon days of the 1990s, after Communism fell.

Editor’s Note: A version of this essay originally appeared on the True Blue Will Never Stain blog.