The Chindia Illusion
"Chindia" has rocked the world of geopolitical lingo in recent years. The subject of articles like "Do You Have a ‘Chindia' Strategy?" and books such as Chindia: How China and India Are Revolutionizing Global Business, the idea that China and India are poised to lead the twenty-first century would have been dismissed only two decades earlier. China found itself blacklisted after cracking down on protesters at Tiananmen Square, and India was widely thought to be condemned to the "Hindu rate of growth." From the 1970s through the turn of the century, the two countries were seen as marginal players in a global economy that was anchored in America, Western Europe and Japan.
Times have certainly changed. Just consider how quickly America's relative weight in the global economy is declining. In 2003, it accounted for 32 percent of global output, and the developing world for 25 percent; in 2008, those proportions were reversed. While the postwar economic heavyweights are struggling, China and India are emerging from the financial crisis better than just about anyone else. The IMF's update to its World Economic Outlook predicts that while they will grow at, respectively, 8.5 percent and 6.5 percent in 2010, the United States will only post 0.8 percent growth next year. The rapidity of their rise is perhaps even more impressive than their current performance. In 1989, China and India accounted for 3.3 percent of global GDP; in 2008, that fraction had grown to 8.8 percent. In those 20 years, trade between them soared from an anemic $200 million to a robust $52 billion.
Increasingly seen as geopolitical pillars, China and India appear to have placed their cold-war animosity behind them in the service of forging a strategic partnership. They both oppose American pressure to reduce their CO2 emissions on the grounds that they are (relatively) underdeveloped, call for greater representation in international economic institutions by citing their growing clout, and advocate long-term alternative arrangements to the dollar-dominated currency system.
The reality, though, is that there is nothing uniquely "Chindian" about such positions; almost any two developing countries would agree to them, no matter how different they might be in terms of their government structure, economic status and strategic objectives. Stripping away the unity that China and India appear to have forged by virtue of being Asia's fast-rising titans, one sees that the main dynamic between them is competition, not cooperation.
In recent years, both countries have vied for influence in resource-rich areas throughout the world-Latin America and Africa, in particular-and each has leveraged multilateral fora that exclude the other. For example, China has used the Shanghai Cooperation Organization to make inroads in central Asia, and India has employed the India-Brazil-South Africa Dialogue Forum to strengthen cooperation between three of the developing world's linchpin democracies.
More recently, India has accused China of dumping low-quality goods onto its markets, blocking its agricultural imports and exploiting its infant industries. China has fired back by protesting the Asian Development Bank's plan to loan $2.9 billion to India on the grounds that $60 million would go to financing a watershed management project in Arunachal Pradesh, a territory whose sovereignty the two countries have disputed for decades.