China, India, America
And
The New World
EXPERTS FROM ‘THE ELEPHANT AND DRAGON’
BY ROBYN MEREDITH
§
China
When China’s leaders, including Deng Xiaoping, sent the army to Beijing to quash the protest, perhaps a million Beijingers poured into the streets to support the students. The early Sunday morning hours of June 4, the Chinese soldiers began to shoot their countrymen. Students who refused to leave Tiananmen Square were killed, some run over by tanks, some shot in the back. Thousands died.
§
One of the most moving scenes from that tragic confrontation came in broad daylight. The day after the massacre, as a column of tanks rumbled down the Avenue of Eternal Peace along Tiananmen Square, a slight man wearing a simple white shirt and dark slacks stepped in front of a tank. He stood still. The tank paused inches away from him. Television cameras rolled and onlookers were riveted. The tank turned, as if to go around this Chinese Everyman. The lone man moved to block it, daring the tank’s driver to run over him. Again, the tank hesitated. Someone ran to pull the lone man-called simply “the tank man” by the Chinese Diaspora-out of the way. But his act of bravery and defiance is remembered almost everywhere.
§
No wall fell, no war was fought, yet China’s tiptoeing away from communism was as momentous as any revolution. Rising prosperity for one billion people, plus one of the biggest global business boom times, was gradually and voluntarily unleashed from within by Communist Party cadres, not triggered by a political revolt.
§
Deng may have betrayed Mao’s memory, but he did so to preserve the party that Mao had brought to power. China’s Communist leaders knew they had to accomplish a dual objective: to modernize china and to make its people more prosperous after the nation’s decades of stagnation. Above all, the Communist Party leaders prised political stability, and they were willing to reverse the very essence of party doctrine.
Chinese are still allowed to carry only money not voters identity card in their new wallets.
§
While Chinese Leaders looking to the outside found inspiration in the Singapore model, they were at the same time horrified by the fate of their former ally the USSR.
§
China’s most visible infrastructure project to date has been the building of new roads and highways. In 1989, China had just 168 mile of expressways; by 2004, it had built 21,500 mile. By 2010, it plans to have 40,000 mile.
§
Today China uses an unprecedented mix of economic models; it remains a partly government-planned and government-owned economy—a throwback to the nation’s communist past—but a large portion is now market oriented. The Chinese economy defies easy description: it isn’t fully communist, but it isn’t fully capitalist either.
§
Both urban and rural Chinese have prospered, but because there is such a gap between them, the Chinese government is now facing its biggest fear: instability. The number of demonstrations has risen sharply, particularly in the rural areas. There were 87,000 local protests in 2005, which comes to 200 a day nationwide.
China’s efforts to bring parity to incomes in urban and rural areas are ongoing. During the eleventh five-year plan, which runs from 2006 to 2010, the Chinese government plans to build rural road and irrigation systems and improve schooling and health care in the countryside. The aim is to help pass along the gains of China’s 570 million urban denizens to its 760 million rural residents.
§
In a few years, 100 million Chinese, a population greater than any European nation’s, will have middle-class purchasing power.
And
The New World
EXPERTS FROM ‘THE ELEPHANT AND DRAGON’
BY ROBYN MEREDITH
§
China
When China’s leaders, including Deng Xiaoping, sent the army to Beijing to quash the protest, perhaps a million Beijingers poured into the streets to support the students. The early Sunday morning hours of June 4, the Chinese soldiers began to shoot their countrymen. Students who refused to leave Tiananmen Square were killed, some run over by tanks, some shot in the back. Thousands died.
§
One of the most moving scenes from that tragic confrontation came in broad daylight. The day after the massacre, as a column of tanks rumbled down the Avenue of Eternal Peace along Tiananmen Square, a slight man wearing a simple white shirt and dark slacks stepped in front of a tank. He stood still. The tank paused inches away from him. Television cameras rolled and onlookers were riveted. The tank turned, as if to go around this Chinese Everyman. The lone man moved to block it, daring the tank’s driver to run over him. Again, the tank hesitated. Someone ran to pull the lone man-called simply “the tank man” by the Chinese Diaspora-out of the way. But his act of bravery and defiance is remembered almost everywhere.
§
No wall fell, no war was fought, yet China’s tiptoeing away from communism was as momentous as any revolution. Rising prosperity for one billion people, plus one of the biggest global business boom times, was gradually and voluntarily unleashed from within by Communist Party cadres, not triggered by a political revolt.
§
Deng may have betrayed Mao’s memory, but he did so to preserve the party that Mao had brought to power. China’s Communist leaders knew they had to accomplish a dual objective: to modernize china and to make its people more prosperous after the nation’s decades of stagnation. Above all, the Communist Party leaders prised political stability, and they were willing to reverse the very essence of party doctrine.
Chinese are still allowed to carry only money not voters identity card in their new wallets.
§
While Chinese Leaders looking to the outside found inspiration in the Singapore model, they were at the same time horrified by the fate of their former ally the USSR.
§
China’s most visible infrastructure project to date has been the building of new roads and highways. In 1989, China had just 168 mile of expressways; by 2004, it had built 21,500 mile. By 2010, it plans to have 40,000 mile.
§
Today China uses an unprecedented mix of economic models; it remains a partly government-planned and government-owned economy—a throwback to the nation’s communist past—but a large portion is now market oriented. The Chinese economy defies easy description: it isn’t fully communist, but it isn’t fully capitalist either.
§
Both urban and rural Chinese have prospered, but because there is such a gap between them, the Chinese government is now facing its biggest fear: instability. The number of demonstrations has risen sharply, particularly in the rural areas. There were 87,000 local protests in 2005, which comes to 200 a day nationwide.
China’s efforts to bring parity to incomes in urban and rural areas are ongoing. During the eleventh five-year plan, which runs from 2006 to 2010, the Chinese government plans to build rural road and irrigation systems and improve schooling and health care in the countryside. The aim is to help pass along the gains of China’s 570 million urban denizens to its 760 million rural residents.
§
In a few years, 100 million Chinese, a population greater than any European nation’s, will have middle-class purchasing power.
India
§
‘India need to change,’ Rajiv Gandhi the later member of the dynasty finally recognized the need of change. He changed laws to allow more imports and exports, cut taxes, and reduced the number of industries requiring licenses to produce goods. Indian bureaucrats following Gandhi’s teachings claimed that telephones were luxuries, even in 1985, but Rajiv Gandhi allowed the number of telephones nationwide to double and trimmed waiting times. The consequences of all these actions were huge; the nation’s economic growth doubled and companies began hiring. Exports grew dramatically.
But, he became the third famous Gandhi to fall victim to assassination.
§
Indian Politicians finally began to turn to China for inspiration. The chief minister of Andhra Pradesh, N. Chandrababu naidu, sent all his legislators to China with the mandate that they should come back and give him at least two ideas each about how India could improve.
§
Originally built in 1942, the Bangalore’s airport has changed little in the past sixty plus years. Its white tiled floors, poorly lit corridors, and shabby stained chairs—needed for the long wait at the luggage conveyor belt—make the airport look as it belonged in the developing world.
§
Indian joke that India is like a drunk walking home: it takes one step forward, then two steps sideways, but eventually makes it home. Indian reforms, hampered especially by local politics, tend to lurch ahead, and then jolt to a stop, only to hurl forward again.
§
Another Indian joke that goes like this: “Deng Xiaoping is sitting in his car reading a newspaper, when his driver interrupts him and says, ‘comrade, there is a problem. The sign says turn Left for communism, turn right for capitalism. Which way should I go?
Deng tells his driver, ‘There’s no problem. Just signal left and go right.”
§
In India, the government must gain consensus from various constituencies—multiple political parties, outspoken interest groups, local businesses, and residents.
§
So while change is overdue, India is making progress. “It will improve in fits and starts” Mr. Nilakeni says. Gurcharan Das agrees. “India will never be a tiger. It is an elephant that has begun to lumber and move ahead”. “It will never have speed, but it will always have stamina”. “China is winning the sprint, and we are going to win the marathon”
§
India’s more than 100 million English-speakers—about twice as many as live in the United Kingdom itself—are attracting millings of new jobs.
The fears of the Western workers are justified. More than a million white-collar, service-industry jobs have already moved to India, and more are on the way. As many as 300,000 American jobs each year will move to overseas for the next thirty years—9 million jobs in all estimates the McKinsey Global Institute.
§
“This is tsunami coming our way,” said Intel’s chairman, Craig Barrett. “Over the next ten years you are going to see major, major dislocation.” Intel has already hired 2,900 Indian workers. Of the world’s 500 largest companies, 400 send middle-class work to India, up from 150 in 2000.
§
In 2005, Microsoft, Intel, and Cisco each announced they would invest more than $1 billion in India. Six months later IBM said it would invest $4 billion. “In the next three years we will triple our investment in India,” said Samuel J. Palmisano, chief executive of IBM. IBM already has 43,000 employees in fourteen Indian cities—nearly as many Indian knowledge workers as Philips have factory workers in China.
§
Now, with the Internet and inexpensive telephone service connecting the world, developing countries with educated workforces can export their intellectual work.
India’s English-speaking population also facilitates a direct connection between India and the largest economy in the world.
§
The big Indian offshoring companies TCS, Wipro, and Infosys have combined 220,000 workers, most of them doing work on behalf of American customers. Mr. Narayana Murthy’s Infosys alone is growing so fast that it added more than 28,000 employees in twelve months and the firm reached 70,000 employees in 2007. The entire nation’s IT and call-center market has mushroomed, accounting for 4.8 percent of the country’s GDP and employing 1.3 million Indians.
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Between 250,000 and 625,000 of the Indian graduates are qualified to staff the back offices of American and British companies. Every year, more engineers graduate from college in a single Indian State, Andhra Pradesh, than in the entire US.
§
The vast majority of the money in the Indian market is going to be at the bottom of the income pyramid. C.K.Prahalad, an eminent University of Michigan Business School professor, argues that selling products to the “bottom of the pyramid” is the future of global business because of the sheer numbers of potential customers now available in India and China. Worldwide, there are 4 billion people at the bottom of the pyramid, and they spend $5 trillion a year, according to the World Bank.
§
Indian women are experiencing the most significant changes. Traditionally, Indian women depended financially n their families until they married, at which point they depend on their husbands. During the early years of the offshoring boom, call center offices had to invite parents to visit along with job applicants because the older generation could not understand what kind of respectable company would ask young women to work late into the night making phone calls to strangers. Now the jobs are viewed with prestige.
§
While Indian University Graduates line-up for jobs that can propel them into the newly vibrant middle class, for India’s rural and urban poor, change has been interminably delayed. The lowest-paid workers in the offshoring industry—those working in call centers—earn median wages of $275 a month. But most Indians still earn less than $60 a month, or just $2 a day.
§
Change has come in small increments to India’s villages, where 70 percent of the population lives. Television, those who can afford a computer often have dial-up Internet access. Still all call center jobs in the world wouldn’t solve India’s poverty problem. First, few of the very poor would qualify to work in call centeres: despite the Indian elite’s reputation for educational success, 35 percent of all Indians are illiterate. 15% of India’s students reach high school, and only 7 percent graduate. Just half of Indian girls can read and write. Parents are so desperate to enrol their children in quality schools that private schools are proliferating, and even poor families scrimp to pay for tuition starting fat around $25 a year.
§
From time to time, terrorist ignite the simmering Hindu-Muslim rivalry by bombing trains, temples or mosques. A stubborn urban gang war between Hindus and Muslims persists in Mumbai. Bringing India’s poor along on the ride to a New India would require vast job creation. That is likely to come only with the addition of thousands of factories, myriad construction projects, or the nurturing of big increase in agricultural.
§
Demographers predict, In 2030, India will become the most populous nation on Earth, overtaking china around the point when both reach 1.45 billion people. Also economists predict, India will surpass Japan to become the world’s third-largest economy after the United states and china. India will have the by far the largest workforce in the world because 68 percent of its population will be of working age—a particularly high percentage of workers compared with retirees and children dependent on workers’ incomes. India will have 986 million working-age people in 2030. If the nation fails to create jobs for its fast-growing population of workers, it risks being mired in poverty and hopelessness.
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When all the pieces of the global economy work together smoothly, all the players involved benefit. In this decade, a clear pattern emerged: China became factory to the world, the United States became buyer to the world, and India began to become the back office to the world.
§
And America
A barrage of test scores shows American students are already far behind the world’s academic leaders. U.S. universities are still considered the best in the world, but shockingly, American fifteen-year-olds are tied for twenty-first place in average academic performance globally. American eighth graders ranked fourteenth in math—just beating out Lithuania’s kids—and eighth in the world in science in 2003. When those American children grow up and start working, they will not have the skills to compete with better-educated foreign counterparts, much less to earn wages ten times higher. Reading, language skills, and geography are other basic skills in which American students are laggards.
§
The US lags far behind Asian leaders in high-speed, broadband internet connectivity today, even though the internet was invented in America. Japan, Korea, most of Europe, and even China and India has far more reliable and advanced cell phone networks. On trains zipping past Indian fields, passengers surf the Internet on their laptop computers. On subway cars deep underground in China, riders chat on cell phones. Not in America.
