A stronger relationship between the world’s two largest democracies would significantly benefit both countries.
China is regularly talked about as a future superpower that could become as powerful as the United States.
However, that view is largely based on projecting the continuation of trends that have already stopped.
China is no longer growing at 15% or even 10% per year, with growth likely to remain closer to 5% or even lower on an annual basis.
China’s authoritarian government has also demonstrated a significant lack of competence, with ‘zero-covid’ ending in failure as the country ended up letting the virus spread as many Western countries ended up doing.
And China’s biggest problem is demographic, with their population aging at a truly stunning pace. China appears to have “gotten old before they got rich,” facing the same demographic challenges that bedevil much of Europe and Japan, but without reaching a similar per capita GDP.
Thus, China is not the most likely candidate to become the dominant superpower in Asia.
Instead, that would be India.
India has much better demographics than China, with a population distribution similar to what China had in the beginning of their boom phase.
India also has a more flexible and resilient system due to being a democracy, giving India the chance to avoid large-scale mistakes and adapt more quickly.
For example, India avoided China’s draconian ‘zero-covid’ approach, and India’s domestically-produced vaccines were more effective than China’s domestically-produced vaccines.
China has also alienated much of the world with a threatening and aggressive approach, in contrast to India’s much better public image.
From a strategic perspective, India also has a much wider range of allies, being able to both get closer to fellow democracies and forge ties with ‘non-aligned’ nations.
So, there is every reason to believe that India will be a huge player in the world going forward, with a great potential to become a world superpower.
That’s something the U.S. clearly recognizes, and a new report indicates they are seeking to deepen their economic ties:
“Commerce Secretary Gina Raimondo said Wednesday that the U.S. is considering collaborating with India on certain manufacturing jobs in order to boost competition against China.
Raimondo told Jim Cramer on CNBC’s “Mad Money” that she will visit India in March with a handful of U.S. CEOs to discuss an alliance between the two nations on manufacturing semiconductor chips. The Commerce Secretary also revisited some of President Joe Biden’s comments on American manufacturing from his State of the Union address on Tuesday.
“We stopped making things,” Raimondo said. “I think, in 1990, there were like 350,000 people working in the chip industry in America. Now it’s like 160,000.”
Biden’s CHIPS and Science Act, signed into law in August, supplied $52 billion for U.S. companies to invest in chip manufacturing. The U.S. semiconductor industry employed more than 277,000 workers in 2021, according to the Semiconductor Industry Association, but it made 0% of the world’s supply of semiconductors as of September 2022.
In comparison, Taiwan and South Korea comprise 80% of the global foundry market for chips. TSMC, the world’s most advanced chipmaker, is also headquartered in Taiwan. But a collaborative effort between the U.S. and the Indo-Pacific “quad” region could lessen the global reliance on Taiwanese semiconductors. In September 2021, India, Japan and Australia announced plans to establish a semiconductor supply chain initiative to secure access to semiconductors and their components.”
The statement follows a high-level meeting last week between top officials from both countries:
The growing ‘counterbalancing coalition’ to check China’s influence
While the U.S. and India have disagreements on some issues, both countries have a common-interest in limiting China’s influence.
For India, that is a visceral issue, with many recent border clashes having further angered much of the Indian populace.
India also has a large diaspora community that has achieved immense success in North America, meaning their are deep familial and business ties that the U.S. and India can draw upon.
A stronger relationship – perhaps culminating one day in a full alliance – between the world’s two largest democracies would thus benefit both nations, and would benefit the world by increasing the overall strength of the democratic world.
Canada could of course benefit from this as well, though we would benefit more so if we had leaders who didn’t foolishly reject opportunities to sell more LNG. India recently announced they would be buying more LNG from Qatar:
“Petronet LNG (PLNG.NS), India’s top gas importer, will seek up to 1 million tonnes per annum (mtpa) in additional liquefied natural gas (LNG) supplies when it renews its long-term deal with Qatar, the company’s chief executive said on Tuesday.”
The countries that make the most of these opportunities will rise. Those that ignore those opportunities – as Canada has been doing – will decline.
Spencer Fernando
Photo – YouTube