China is the world’s second largest economy with a Gross Domestic Product of $19.7 trillion. India ranks fifth with a GDP of $ 3.7 trillion. [1] According to the latest report of The Reuters dated December 11, 2023; “The Indian economy is following the path of China in order to start growing rapidly.” [2] In this context, the country has been the fastest growing economy in the world for the last two years. According to the International Monetary Fund, the Indian economy is expected to grow by more than 6% in 2023 and 2024. [3] It is estimated that China will not grow by 4-5%, world economies by an average of 3%, and developed economies by 1.5% during the same period.
According to a Reuters report, India’s economy and demographic structure are similar to China’s period in the late 1990s and early 2000s. This shows that if India can achieve rapid and sustainable growth over the next two decades, it will follow China’s path. In order for India to reach the same level as China in the next two decades, October will need to achieve the same success in energy strategy and other population practices in addition to its economic policies.
Economically and demographically, India is just reaching the level that China reached years ago. For example, India reached $ 7,100 per capita GDP in 2022, while China reached this rate for the first time in 2007-2008. Again, the share of the population living in urban areas in the country reached 35% in 2022, while this level was reached around 2000 in China. As another example, energy consumption in India will reach 26 gigajoules per capita by 2022, a rate that China reached in the early 1990s.
At this point, it should be remembered that there may be differences between the two economies, especially due to climate Deceleration. Because China’s cities are at much higher latitudes, more energy is needed for heating. In addition, there are important differences in the energy sector, including the relations between state-owned companies and the private sector. Dec. There are also demographic similarities in comparison to this. For example, there are important similarities in terms of a large rural population ready to migrate to urban areas and the potential for industrialization. In addition, India’s severe air pollution in major urban areas and average life expectancy rates are at the same level as China’s in the 1990s and October 2000s.
India is entering a period of upswing in which urbanization, industrialization, household incomes and energy consumption are generally increasing at the fastest pace for several decades. If the country avoids making major political mistakes and survives other negative global shocks, it may remain the fastest growing economy in the world for most of the next 10-20 years. The rapid urbanization, industrialization of India and especially the enrichment of the middle class will lead to a tremendous increase in the demand for energy services.
In the next 20-30 year period, India will follow its own path regarding energy consumption, fossil fuel use and emissions and will have to cope with its own unique challenges. To state at this point, the background of China’s rapid, continuous and tremendous growth in the 2000s and 2010s lies in the reforms and expansions in the 1980s and 1990s. In addition, China’s contribution to the global economy has increased rapidly after the Belt and Road Initiative announced in October 2013. India may need huge investment projects such as the Belt and Road Initiative in order to follow China’s path. The way to this is to follow a strong state structure, political determination and a balanced foreign policy.
Although China has also proposed a corridor for India within the framework of the Belt and Road Initiative, New Delhi does not take a warm view of this project. Led by fast-growing economies such as India and China, this century may witness the rise of Asia in the face of the West. But for this, the competitive understanding must be abandoned. If India and China do not manage to realize the Asian Century by coming together in the framework of economic cooperation and win-win cooperation, it will be almost impossible to prevent crises in Asia.
The increase in the number of Asian actors among the world’s largest economies will mean that the center of the global economy will shift from the West to Asia.Dec. In order for India to achieve sustainable economic growth and successfully overcome the geopolitical shocks in the world, it is important to avoid political conflicts. The effect of this polarization policy has been frequently observed in India-China relations in recent years. The fact that Chinese President Xi Jinping did not attend the G20 Summit in India after the border tensions supports the view that there is a big gap in bilateral relations.
The emergence of new crises in India-China relations, which have entered a major crisis of trust due to geopolitical fractures on the global plane, will affect not only regional politics, but also the global economic order. As a result, India’s political and economic preferences will be decisive in the role that Asia will assume in the construction of the next century.
[1] “Dünyanın En Büyük Ekonomileri”, Get Midas, https://www.getmidas.com/blog/dunyanin-en-buyuk-ekonomileri/, (Date Accession: 12.12.2023).
[2] “India’s Economy Follows China To Reach Rapid Take Off”, Reuters, https://www.reuters.com/markets/asia/indias-economy-follows-china-reach-rapid-take-off-2023-12-11/, (Date Accesion: 12.12.2023).
[3] Ibıd.
