Both China and India are still desperately poor countries. Of the total of 2.3 billion people in these two countries, nearly 1.5 billion earn less than US$2 a day, according to World Bank calculations....These are all valid points, but I actually (gasp) agree more with Tom Friedman today:
What about the hordes of Indian software engineers, call-center operators, and back-room programmers supposedly hollowing out white-collar jobs in rich countries? The total number of workers in all possible forms of IT-related jobs in India comes to less than a million workers – one-quarter of one percent of the Indian labor force. For all its Nobel Prizes and brilliant scholars and professionals, India is the largest single-country contributor to the pool of illiterate people in the world. Lifting them out of poverty and dead-end menial jobs will remain a Herculean task for decades to come....
China is far behind India in the ability to politically manage conflicts, and this may prove to be China's Achilles' Heel. Over the last fifty years, India's extremely heterogeneous society has been riddled with various kinds of conflicts, but the system has by and large managed these conflicts and kept them within moderate bounds. For many centuries, the homogenizing tradition of Chinese high culture, language, and bureaucracy has not given much scope to pluralism and diversity, and a centralizing, authoritarian Communist Party has carried on with this tradition. There is a certain pre-occupation with order and stability in China (not just in the Party), a tendency to over-react to difficult situations, and a quickness to brand dissenting movements and local autonomy efforts as seditious, and it is in this context that one sees dark clouds on the horizon for China's polity and therefore the economy.
In China, conservation is not a "personal virtue," as Dick Cheney would say. Today it is a necessity. It was so polluted in Beijing the other day you could not make out buildings six blocks away. That's the bad news. Here's the good news: China's leaders and business community know it. They know that as China grows more prosperous, and more Chinese buy homes and cars, it must urgently adopt green technologies; otherwise, it will destroy its environment and its people. Green technology will decide whether China continues on its current growth path or chokes itself to death. So green innovation is starting to mushroom in China....The point is not simply whether or not China (or India) are "richer" than the United States or Japan. As someone once said, quantity has a quality all its own. The economies of China and India are already relatively large, and growing quickly. By 2020, both are liable to be larger than the United States, barring a major recession. The fact that China will be a larger automobile market than the United States is going to give it a huge ability to determine the shape of the global automobile market. If the Chinese want ethanol fueled cars, they're going to be able to get them, period. You can bet that GM isn't going to waste time trying to convince Beijing that regulations would hurt the market - not when Toyota, Kia, and whoever else is there waiting to jump in.
Green China will be much more challenging than Red China. Look around the nine-story Ministry of Science and Technology building. Yes, a lot of cool things here are from Europe, and some are from the U.S.
But what about the porous pavement bricks, made of fly ash, a byproduct of coal combustion that allows storm water to flow through and be reabsorbed into the Beijing aquifer? Made in China. The photovoltaic panels that provide 10 percent of the building's electricity from sunlight? Made in China. The solar hot water system? Made in China. The soil substitute in the building's roof garden that is 75 percent lighter than regular dirt and holds three to four times more water per cubic foot? Made in China. The concrete building blocks filled with insulating foam that keeps you warmer in the winter and cooler in the summer? Made in China, by a U.S.-owned company. The water-free urinals? Made for the China market by a U.S.-owned company.
Jack Perkowski, who runs Asimco Technologies, the huge China-based auto parts maker, told me where this is heading: "As China moves from the second-largest market to the first in autos ... the industry here will have to come up with transport that is more affordable, fuel-efficient and environmentally sound."
The Chinese have incredible environmental problems, and the next big project for the party is trying to fix them. But in so doing, the Chinese will prove - and probably export - all the solutions that we need in the west, too. Not in spite of their poverty, but because of it: A solar water heater is probably a lot cheaper than a natural-gas fired water heater. And the Chinese not only make the most solar water heaters, they're currently making the best.
The real power of the new economies is not going to be their riches, but their solutions to our problems.
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