Crouching Dragon, Hidden Tiger: Can China And India Dominate The West? (Paperback) by Prem Shankar Jha

Book Summary of Crouching Dragon, Hidden Tiger: Can China And India Dominate The West?

The media is feeding on the boastful self-confidence of a newly invigorated entrepreneurial class in India, and on the growing irritation in the Chinese leadership with the Indian upstart.

To say these two countries will dominate the global economy in fifty years if they stay on their present trajectories is undoubtedly true. But to take for granted that they will succeed in doing so is naive. Both countries are in the early stages of transformation from precapitalist to capitalist societies and this transition is, by its very nature, jarring.

The transition closes old avenues of progress and opens new ones, creating new winners and new losers by the hundreds of thousands. The faster the rate of economic change, the less time given to existing social institutions to adapt, and the greater, therefore, the propensity for violent change.

This book looks at the interaction of economic with political and social change in China and India as they have progressed down the road to capitalism. It examines the social and political conflicts that the market has unleashed, and shows how the course of development in both countries has been determined by the conflict between competing strata of the newly empowered capitalist class.

It concludes that neither country has created the institutions that are needed to reconcile these conflicts. Their future therefore remains uncertain.

Book Launch: Crouching Dragon, Hidden Tiger
03/23/2010

The rise of the world’s two most populated countries, India and China, is shifting global attention from the Atlantic to the Pacific. Author and journalist Prem Shankar Jha, in his new book, Crouching Dragon, Hidden Tiger, analyzes the Indian and Chinese economic and political systems with any eye to assessing the future development course of these two giants.

At a 23 March 2010 launch of the new book at the Kissinger Institute, Jha set out his views; Evan Feigenbaum, Senior Fellow, Council of Foreign Relations; Chas Freeman, President, Middle East Policy Council; and Ashley Tellis, Senior Associate, Carnegie Endowment for International Peace, then offered comments.

A 2003 Goldman Sachs report, “Dreaming the BRICs: The Path to 2050,” predicted that India and China soon will become the dominant suppliers for manufactured goods and services if, and only if, they are able to maintain political stability.

This caveat precipitated Prem Shankar Jha’s exploration of the subject. Is it safe to base policy on the assumption that India and China will dominate the global market by mid-century despite its contingency on political stability? While Jha concluded India and China will play a larger economic role in a more multi-polar world, he is skeptical they will dominate the world market – each for reasons of their own.

His doubt centered on the difference between economic growth and economic development. China maintains economic growth yet struggles with economic development; India battles economic growth while enjoying economic development. Jha hypothesized both countries have mounting obstacles of their own to overcome before dominating the global economy, thus casting doubt on the Goldman Sachs report that this could occur around mid-century.

What does this mean for the globe and the United States? Ashley Tellis opined that at an abstract level, China has the capability to set, make, and achieve national goals. However, there exists an internal struggle between the central and local governments.

This conflict between the center and locality leads to poor state investment choices, damages growth and dilutes sustainability. Similarly, India faces capacity limitations; however, of a different kind. Likewise, the United States is weakened by such forces as interest groups but unlike India and China, the U.S. has greater latitude for making poor decisions and a higher tolerance for making mistakes already built into the system.

Tellis predicted China will sustain peak performance for some time for various reasons including its low development base but that the Chinese are more susceptible to shocks in the system. India, on the other hand, will experience lower levels of peak performance but ironically this makes it less susceptible to shocks.

While Chas Freeman commended the similarities and linkages drawn between India and China in the book, he thought it overlooked the significance of overseas Chinese and Indians in the economic development of both countries. Ethnic Chinese and Indians from around the world have played a tremendous role by returning to their ethnic homes to invest capital and spur change and growth.

Freeman also expressed less concern about India and China dominating the world as he did about a potential regional conflict between sparked by tension between the two countries, but perhaps also drawing in Japan, Russia, and Pakistan because of their ties to the two.

Evan Feigenbaum focused on three major points: institutions, social transitions, and geopolitical relevance. In examining political institutions, he compared the federalism of India to the federalism of China and concluded the institutions in both countries to be brittle and challenged by social transitions. He opined China is ahead of India in social transitions.

Geopolitically, Feigenbaum hypothesized that, although India and China will not dominate the world, the international system will have to accommodate them. These institutions will undergo restructuring that will ultimately hurt Europe. Such changes are already taking place such as the transition from the G-8 to the G-20. Ultimately, there are great uncertainties regarding the impact of India and China’s emergence as significant actors in world institutions.

http://www.wilsoncenter.org/ondemand/index.cfm?fuseaction=media.play&mediaid=916836B7-9B26-60A2-07DBC084C62BAA08

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