It's been a busy week for geopolitical meetings. While Western leaders met in Washington and Korean leaders gathered in the demilitarized zone, Narendra Modi of India went to Wuhan province in China to speak with President Xi Jinping for a two-day informal summit that begins on Friday. . It is a meeting that is worth observing: as a new world order takes shape, these two countries go from being peripheral players to being central conductors. These five facts explain what you need to know.
In 2000, China accounted for only 3.6 percent of the world economy; today it is responsible for almost 15 percent of world economic production, and by 2032 it is about to overtake the US. UU to claim the first place in the world. It does so by taking advantage of the power of state capitalism, intertwining its political power with its financial power on a scale never before seen in the global free market.
India is still in the early stages of its economic rise, but it is unmistakably ongoing – over the next four years, the IMF projects that the Indian economy will grow on average by almost 8 percent annually. Modi has overseen a remarkable crackdown on corruption and bureaucracy in the world's largest free market democracy by population (1.32 billion people). It also presides over a much needed modernization of the country's infrastructure, and is underpinning its finances through a new and ambitious tax on goods and services. By 2027, India is expected to be the third largest economy in the world behind the US alone. UU And China.
Between 1990 and 2011, almost 450 million Chinese people came out of poverty. More or less in the same period of time (1994 to 2012), more than 130 million Indians escaped poverty, a 50 percent reduction in their poverty rate.
For years, the consensus was that a rising middle class would force the Chinese leadership to reform its political system to accommodate an empowered citizenry that would demand more freedoms. That did not happen, although, to Beijing's credit, the Chinese leadership began to proactively address concerns such as corruption and air pollution before they reached crisis levels. The recent (and continuing) political turbulence in the West has also overshadowed the appeal of free market democracy in the eyes of many.
India is another story. Modi has not fulfilled his campaign promise to create 10 million new jobs per year; according to some estimates, it has not even been able to reach 10 percent of that mark. India's health system also remains disappointing, and its problems will be more pronounced as the economic fortunes of average citizens continue to rise. (The government has announced plans to dramatically expand basic health coverage, but does not have the resources to fully meet those high promises). Both oversights have given Modi's political opposition an opening before the Indian elections scheduled for the spring of 2019.
However, Indians continue to be bullish in the future: 70 percent of Indians are today "satisfied" with the way things are going in the country, compared to 29 percent in India. 2013. Given the immense advance that India has made in the last two decades, that optimism is understandable. However, although globalization has already begun to trouble policy in the West, it has not yet done so in emerging markets.
That moment of the settling of accounts is approaching. According to the World Bank, 69 percent of jobs in India currently run the risk of being automated in the dawn of the AI. And automation does not just come for India: 77 percent of jobs in China are also susceptible to the next technological revolution. But China, perhaps more than any other country in the world, is equipped to handle it. Beijing has shown again and again that it values social stability over economic gains, and given its unusual control over the entire Chinese economy, the country is positioned to ensure that large-scale economic displacement is carefully managed and controlled. The free market democracies, not so much.
Given the current chaotic politics and the disruptive technological winds that lie ahead, the Chinese political model has never been more attractive. But that system has a cost: a state of increasing vigilance, ranging from a national video network of 176 million cameras throughout the country (with a plan to install more than 250 million by 2020) to a "social credit system" "that adds aspects of the story, from cheating on school exams to missing child support payments or visiting" problematic "websites, on a composite score to assess a person's reliability. That in turn could determine what kind of doctors you can see, which dating websites you can join or where you can travel.
Such measures are fundamentally incompatible with liberal democracy, especially with India, where elections are regular and fiercely contested, speech is (mostly) free, and courts are independent. That has not stopped Modi from trying to exert more control, proposing a law earlier this month to strip his journalists of any credentials that spread "false news" (as the government considers). (That law was withdrawn after publicly protesting). The highly publicized biometric identification system of India's Aadhar – which purported to help authorities reduce benefit fraud – was voluntary when it was first launched, but is now effectively mandated to receive essential government services. Now it is being challenged in the courts, but there is also a growing feeling among some in India that democracy does not bring the advantages it once had, a feeling driven largely by China's meteoric rise. But although Modi may be willing to change part of his citizens' privacy for a more efficient government, it is not clear whether the Indian public agrees with him.
The best of … Frenemies
What brings us to the "informality" of this week "Summit, one without an established agenda". That's by design: the purpose of this meeting is to help Xi and Modi keep the cordial things between the two growing economic powers. And there have been more than enough outbreaks in recent months to hold a meeting like this: in the Maldives, in Sri Lanka, even in dormant Bhutan. But perhaps the most controversial issue has been Beijing's quest for a $ 50 billion China-Pakistan Economic Corridor as part of its ambitious One Belt One Road (OBOR) plan to link the economic fortunes of more than 70 countries with Beijing. through investments in infrastructure; part of that corridor runs through disputed Kashmir. Beijing even wants India to register for OBOR as well, but India deliberately refused again just days before the meeting. The reality is that China today has supplanted Pakistan as the main rival of India in Asia, but neither of them considers it of great value to further increase tensions. That starts with this week's meeting.