In response to the rise of China the Bush administration is fostering closer ties with India, the Sunday Times reports:
Economists at Goldman Sachs reckon that if China carries on with pro-growth policies and manages its economy reasonably well, it could overtake the United States as the world’s biggest economy as soon as the late 2020s. By 2050 India might also have overtaken the United States if it pursues vigorous economic reforms in this decade and beyond. India, at present the world’s 11th-largest economy, has long been thought of as a laggard compared with China: good at information technology and outsourcing but incapable of the sort of manufacturing that has powered China’s economic emergence.
That is changing. These days India is beginning to follow the Chinese model with investment soaring as a share of GDP, with trade booming and with manufacturing expanding faster than services. Its biggest companies, of which the Tata Group is in the lead, are achieving global reach, capabilities and prominence far faster than their Chinese counterparts.
If a Chinese car maker had sought to buy Jaguar and Land Rover, it would almost certainly have encountered opposition in America’s Congress – but India, unlike China, is seen as an ally.
For more on recent developments in China-India relations, see:
“Fernandes again raises China bogey” from India’s Economic Times and “China seeks India Tibet backing” from BBC.
