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Last Updated: Thursday, 16 August 2007, 04:09 GMT 05:09 UK
India and China: a race of two halves
By Paul Danahar
BBC Asia Bureau Chief, Beijing

Passengers in a bus in Beijing
China believes it is a 're-emerging power'
"China is a big country, inhabited by many Chinese" were the wise words of one of the great statesman of the 20th century, former French President Charles De Gaulle.

As that century drew to a close, soon-to-be US president George W Bush was asked if he knew who India's leader was. "The new prime minister of India is ... No," he replied.

It is unlikely historians will look back at this new century and find western leaders happily displaying their ignorance of the two most populous nations on earth.

Things have changed very quickly.

Just five years into the new millennium America's National Intelligence Council was hailing the "Asian century" with India and China as the new major global players.

Nobody's arguing with the prediction; instead the talk is about which will be the more powerful.

There's no doubt in the minds of the Chinese. You get a sense here that China hates being spoken of in the same breath as India. It sees itself not as an emerging Great Power but as a re-emerging Great Power.

Containing India

Beijing looks at the catastrophes of the 20th century inflicted on them by foreign powers and home grown lunacies, like the Cultural Revolution, as a blip in an otherwise long history of 'Greatness'.

There is much more of a sense of entitlement to Great Power status from Chinese officials when you meet them privately than there is from their Indian counterparts, who still can't quite believe the world is finally taking them seriously.

There's been a lot of talk from both countries about partnership and mutual progress.

Flags of India and China in the Indian capital, Delhi
India and China are the world's fastest growing economies
In reality the Chinese don't consider India an equal now and or comprehend it being one in the future.

At best they see it as an emerging political power that needs to be contained in South Asia rather than a potential global partner in a new Asian century.

For India, two things hang around the neck of its relationship with China like an albatross.

The first is the war with China in 1962 which most Indians, at a gut level, still consider to be a gross betrayal.

The second is Beijing's relationship with Islamabad, which Delhi believes is all about supporting policies in Pakistan that will harm its southern neighbour.

What particularly irks India's political elite is the belief that without China, Islamabad would still not have a nuclear bomb.

But India is going to have to get over these issues because it needs China.

Lagging behind

India's economy is lagging 15 years behind and China has the huge advantage of its (mostly) superb new infrastructure.

India built its economic boom top down, with technology-based industries that do not require a decent road or ports system. China worked from the bottom up, building on cheap labour and low margins to bulk sell to the world.

Soon China will probably overtake the US as India's primary trading nation.

That's going to mean more cheap goods flooding Indian markets and China has already began investing heavily to create a hi-tech industrial base to rival India's.

High speed train in China
China has superb new infrastructure...
China is going to win the sprint. India may win the marathon but it'll probably require China to stumble.

Economic bubbles burst, as the so-called Asian Tigers can testify. When they do, things get messy.

India would cope with that better. It has safety valves; like the ballot box, a free media and the right to get together with a bunch of like minded people and march down the street hurling abuse at the government.

China does not. It cannot afford to slow down because it must create millions of new jobs every year to avoid producing a generation of discontented unemployed youths with nothing to do but agitate against the state.

Saving grace

China's people have been hurtling through the fastest industrial revolution in history. The country's physical infrastructure is breathtaking, but the foundations for a new social infrastructure have hardly been touched.

Communism has been replaced by unbridled capitalism; making money at any cost, even if that means producing deadly baby food, poisonous toothpaste or toxic toys.

"Made in China" on the side of the box has recently began to give people around the world pause for thought. China's answer to too many problems is to quickly execute a few people and hope that's enough.

Barbie with Tanner (products recalled because of safety concerns)
...but some dubious manufacturing practices
It isn't. Many Chinese feel they are losing their moral compass which is why one of China's fastest growing foreign imports is Christianity.

So what makes India chaotic and frustrating may also be its saving grace. But it has huge challenges to overcome if it is to catch up. China's economic miracle is the envy of the developing world; but its consequence is millions of people traumatised by the pace of reform.

To keep a lid on events here if the economy slides people will need a legal avenue to properly express their natural frustrations at the state.

The only entity around which could provide that is the Communist party. Which would be a bit like asking turkeys to vote for Christmas.

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