India is the only country in the world with a sufficient population and a sufficient governance system to absorb Chinese savings. Moreover, China has done better than any other country on what India lacks, including digital and physical infrastructure. India needs railways, highways, ports, power plants and broadband, areas where China is stronger than any other country in the world.
[Text/David Paul Goldman Translation/Observer Network Ning Oak]
There are countless examples throughout history where the most painful enemies can become allies because confrontation poses too much danger to each other.
For most of the 19th century, Britain and Russia threw themselves into the struggle for the "Great Game" (referring to the long struggle between Britain and Russia for dominance in Eurasia in the 19th century, the western end of the "Great Game" in the Balkans and the Near East, the central end in Central Asia, and the eastern end in the Far East, and the Russo-Japanese War that broke out in the early 20th century was the embodiment of the "Great Game"). The British helped Japan build its navy, which used it to defeat the Russian navy in the Russo-Japanese War. But in the two world wars of the 20th century, Britain and Russia were on the same side.
Russia and China fought the Middle East Road War in 1929 and an undisclosed border conflict in 1969, but the two countries have a common interest in opposing the United States and its allies.
The next strategic alliance between past enemies could bring today's two strategic rivals, India and China, closer to each other. On the surface, this seems extremely unlikely. India and China have a long-standing border dispute, with hundreds of casualties in a 1967 border clash and dozens in another last year.
But there are three reasons why there will be a diplomatic revolution between China and India in the next few years, two of which can be seen in the chart below.
After entering the 21st century, India's working-age population will far exceed That of China. If current trends continue, the low-educated populations of Muslim parts of Asia will be equivalent to those of India and China combined. This is both an economic opportunity and a challenge. This is not a matter of religion, but of culture and level of education, which will be explained below.
At the same time, the rest of East Asia will become less important. Japan currently has a population of 50 million people aged 15 to 49, but at the current fertility rate, there will be only 20 million by the end of the 21st century. South Korea will have only 6.8 million people in this age group, compared to 25 million today. Taiwan's population in that age group will fall from 12 million today to 3.8 million at the end of the 21st century.
Demographic trends in Asia (Source: Asia Times)
India's refusal to abandon its longtime ally Russia over Ukraine came as a surprise to the United States. Instead of supporting U.S. sanctions, India has developed a local currency swap and investment mechanism with Russia, trades with Russia in rubles and rupees, and accepts Russian surplus gains to invest in the Indian securities market.
Comparison of PER CAPITA GDP between China and India over the years (Source: Asia Times)
In retaliation, U.S. Secretary of State Blinken brandished a stick at India, the world's largest democracy. "We regularly discuss these shared human rights values with our partner India," Blinken said, "and we are monitoring some of the recent developments of concern in India, including an increase in human rights abuses by government, police and prison officials." ”
Indian Foreign Minister Jashankar responded bluntly that India also has views on the human rights situation in the United States.
The United States often blames China and Russia, but India is the first time it finds itself under the same accusations. Of course, this unpleasant exchange stemmed from U.S. dissatisfaction with India's position on sanctions against Russia, but it pointed to a trend that would push Russia, China, and India closer together.
The humiliating abandonment of Afghanistan by the United States has left a hidden danger of instability in Central Asia. The U.S. attack on Afghanistan in an attempt to destroy the Taliban, but it ended in a Taliban comeback. As a result, Islamist militants in neighboring countries such as China, Pakistan, Turkmenistan and Uzbekistan could find potential bases in Afghanistan.
Russia's intervention in Kazakhstan reflects the importance of Central Asian security for Moscow, which China endorses. China is also concerned about the security of the northwest region. In December 2021, Beijing and New Delhi held a video summit with foreign ministers of Central Asian countries during the same week.
According to the UNITED Nations Population Project, if the current fertility rate continues, China's population aged 15 to 49 will shrink by nearly half in the 21st century, while India's population will grow slightly.
To be sure, population projections are notoriously unreliable, and United Nations projections provide at best a general description of potential trends. Nonetheless, the trends are so pronounced and different that countries incorporate them into their strategic planning.
An aging population saves more for retirement, and countries with aging populations export capital to countries with young populations.
China's exports to countries (Source: Asia Times)
The main destination for Chinese savings is the United States, which has absorbed most of the world's savings over the past 30 years, accumulating $18 trillion in negative net foreign investment positions. The United States cannot absorb it indefinitely.
China has found alternative avenues for its savings through the Belt and Road Initiative, investing heavily in countries with poor governance and inadequate education. The results were mixed.
India is the only country in the world with a sufficient population and a system of governance to absorb Chinese savings. Moreover, China has done better than any other country on what India lacks, including digital and physical infrastructure.
India's economic take-off has been less successful than China's. In 1990, the GDP per capita of both countries was the same. China's per capita GDP is now three times that of India.
India still relies on the railway system built by the British in the early 20th century. India's rural population accounts for 69% of the total population, while China has only 38%. India needs railways, highways, ports, power plants and broadband, areas where China is stronger than any other country in the world.
Despite the natural common interests of India and China, trade between the two countries remains minimal. In March 2022, China's exports to India were on par with those to Thailand, at half that of Vietnam or South Korea. This is the result of the Sino-Indian confrontation.
In countries that have made a rapid leap from traditional to modern societies, fertility rates are basically at or below replacement levels. According to the United Nations, the working-age population of Muslim countries with higher levels of education, such as Turkey and Iran, will decline slightly, while birth rates in countries with lower levels of education, such as Pakistan, will remain at the high level of traditional societies.
U.N. projections show that the biggest increases in Asia's golden working-age population will come from Pakistan and Afghanistan, two countries with the lowest literacy rates in Asia. According to government data, only 58 percent of adult men and 43 percent of women in Pakistan are able to read, and the actual level may be lower than reported by the government.
Data for Afghanistan are unreliable, but according to data from the fallen former government, 55 percent of men and less than 30 percent of women can read them.
In contrast, India's literacy rate rose from 41 per cent in 1981 to 77 per cent, with 72 per cent of men and 65 per cent of women.
In the Muslim world, female literacy is the best predictor of fertility. As mentioned earlier, the problem is not Islam, but the difference between the modernization of high education and the backwardness of low education.
The former Soviet Union and Central Asian countries are somewhere between the pre-modern world of Pakistan and the relatively modern world of Iran and Turkey, and fertility rates in the latter two countries have fallen to European levels.
For China, Russia and India, this represents a particularly important strategic challenge. All three countries have large Muslim minorities, but the situation is different in each country.
Percentage of Muslim population in major Asian countries (Source: Asia Times)
Muslims make up only 23 million to 40 million of the Chinese population, less than 3% of the total population.
By contrast, it is estimated that by 2030, 30 percent of Russia's population will be Muslim. In 2018, Russia's total fertility rate rose to 1.8, close to replacement levels, but fell back to 1.5 after the COVID-19 pandemic, and it is difficult to distinguish between Muslim and non-Muslim fertility rates.
Muslims make up about 15% of India's population. Its fertility rate has fallen from 4.4 in 1992 to 2.6 in 2015, still higher than Hindus' 2.1, but the two are converging.
Correlation between fertility and literacy (Source: Asia Times)
In 2021, U.S. foreign policy twice brought China, India, and Russia together: the United States humiliated Afghanistan, leaving three Asian powers in an unmanageable mess; The Failure of the United States to ease the Ukraine crisis has led New Delhi to believe that the price of maintaining friendship with the United States is to carry the baggage that could explode in the future.
For two generations, China has had close ties with Pakistan. These include a $15-62 billion investment commitment to CPEC, a representative initiative of the Belt and Road Initiative. In addition to equipping U.S. F-16 fighter jets, the Pakistani military has also accepted Chinese J-10 and J-17 fighter jets.
But Pakistan is a conservative, backward country, politically unstable and unreliable as an economic partner. China may conclude that a diplomatic revolution is necessary: It needs to move from Pakistan to its southern neighbor, which has a larger population and a more stable political system.
Pakistan has had 29 prime ministers since its founding in 1947, but none have completed their terms. India has its own problems, but for 75 years it has had democratically elected governments.
At some point, China may decide to escalate its relationship with India. This will upend all current strategic considerations.
(This article was published on the website of The Asia Times in Hong Kong on April 27, 2022.) ）
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