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Print Edition> World
UPDATED: May 26, 2015 NO.22 MAY 28, 2015
The Dawn of an Asian Century?
An era dominated by the world's two largest developing economies is far from a mere pipe dream
By Yu Lintao

In 1988, when Deng Xiaoping met the then Indian Prime Minister Rajiv Gandhi, the former said that only when China and India have achieved prosperity can we call it an Asian century. Now this finally looks to be on the horizon.

Before concluding his first China visit after taking office, Indian Prime Minister Narendra Modi stressed that he believes that the 21st century belongs to Asia while addressing an India-China business forum in Shanghai, the last stop of a trip aimed at fostering economic cooperation and cultural exchange.

Is such an era foreseeable? It certainly appears to be moving in that direction as ties between the world's two most populous countries and largest developing economies grow ever closer and they seek to make best use of their distinct yet complementary advantages.

The opportunity for cooperation between the two nations, which together make up one-third of the world's population, has arisen owing to the similarly strong and pragmatic leadership style of both countries' leaders as well as the set of development challenges that each respectively faces.

Since taking office in 2013, the tenure of Chinese President Xi Jinping has been marked by his iron-handed anti-corruption campaigns and social and economic reform programs. On the foreign affairs front, Xi has also insisted on China taking on more international responsibilities, redolent in his proposals for New Development Bank and Asian Infrastructure Investment Bank as well as the Belt and Road Initiative which together aim to connect Asian, European and African countries and nurture economic ties.

Modi, arguably the most decisive Indian leader in decades, enjoyed a successful track record in his native state of Gujarat. His victory in the last general election is also seen as owing in no small part to his pedigree in governance.

Like Xi, Modi has a reputation for getting things done. Among his most ardent supporters are India's business leaders, who admire his decisiveness and hatred of red tape. His state, home to 5 percent of the Indian population, now accounts for one fifth of the country's exports.

By voting in Modi, the Indian people have demonstrated their faith that on the national stage, he will writ large his economic success in Gujarat.

Modi knows that key to his success in Gujarat--the basis of his "Modinomics"--was attracting more foreign investment and developing the manufacturing sector, a strategy he terms "the East Asian model." Soon after taking office, Modi launched the Make in India campaign.

But the country Modi now governs is a horse of a different color to Gujarat. As anyone who has ever visited India can testify, the challenges India faces in attracting foreign capital and developing its manufacturing sector are immense. The country needs an overhaul of its infrastructure incorporating roads, ports, urban centers, toilets, and connectivity, as well as to upgrade the efficiency of its government.

China's economy is, too, necessarily undergoing transformation owing to its aging population and the unwelcome prospect of labor shortages. The country is thus zealously promoting its overseas strategy through regional integration initiatives, with its construction and manufacturing enterprises eager to pursue opportunities overseas. For India, which boasts demand in the aforementioned two sectors as well as overwhelming demand for employment among its youth, the decision to advance bilateral cooperation is a sound move.

Keeping this in mind, Modi's latest China visit was a success, judging not only by the signing of cooperative agreements worth some $22 billion encompassing power, renewable energy, infrastructure and steel, but also the further deepening of trust, as leaders from both sides pledged to abandon the outdated zero-sum mindset and build a more constructive relationship.

Western media have tended to play up disputes between the two Asian neighbors, given longstanding territorial issues. But the fact remains that average growth in bilateral trade between the two has remained in and around 30 percent since 2000, higher than any other growth in trade between two countries worldwide. Bilateral economic cooperation is progressing steadily and high-level interactions have become increasingly frequent in recent years.

The International Monetary Fund estimates that in 2015, China and India combined will constitute 30 percent of the global economy. It is not unforeseeable that the pair could eventually become the world's leading economies. The mutual needs of the two nations have drawn them closer and led them to enhance cooperation, a process facilitated by strong leadership. When Asia's two largest countries now committed to marching toward common prosperity, it is surely only a matter of time before the Asian century prophesized by Deng arrives. 

Copyedited by Eric Daly

Comments to yulintao@bjreview.com

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