Modi and Xi understand transnational synergy
Prime Minister Narendra Modi and Chinese President Xi Jinping have echoed the benefits of trade globalisation. This is understandable since the economies of India and China have gained enormously. Since the opening up of the economy after Deng Xiaoping took charge, China has been able to lift more than 700 million people out of poverty and made life significantly better for its 1.3 billion-plus people. Globalisation has helped China to become the second largest economy, the biggest trader of the world and the third largest direct overseas investor; and lifted its per capita GDP to $8,000. The country's annual growth rate was 10 per cent till 2014, although it has slowed down today. In the last G-20 summit that took place in China, Xi asked world leaders to open up their markets and embark on the path of global economic governance. India too has grown exponentially since liberalisation began in 1991 under Narasimha Rao’s prime ministership.
The then Finance Minister Manmohan Singh, while presenting the Union Budget on July 24, 1991, said: “No power on earth can stop an idea whose time has come.” India has registered a stable economic growth following 25 years of liberalisation. In 1991, India's GDP stood at Rs5, 86, 212 crore, but today it stands at Rs1,35,76,086 crore — up 2,216 per cent. In dollar terms, India's GDP crossed the two trillion dollar mark in 2015-16. Currently, the country is ranked ninth in the world in terms of nominal GDP. India is tipped to be the second largest economy in the world by 2050. Nevertheless, some economic experts do not go with what a majority of the Indian and the Chinese policymakers project about the gargantuan impact of globalisation on them. Xi must introduce serious political reforms in the sense of bringing more checks and balances and enforcement of rule of law, without any ideological bias. More than that, time for the Asian giant has come to address the huge gap between the rich and the poor. This last bit is true for India as well.
With the large impact of the global financial crisis of 2008 across the world, many feared that protectionism would return to countries like India and China. But as it has turned out, there was no dramatic reversal of open trade policies. But the global economy as a whole did not bounce back since then, like before. Thus, the National Bureau of Statistics of China sounded a cautionary note: “With unstable and uncertain domestic and external factors, the foundation for continued economic growth is not solid enough”, as reported by the Financial Times in October 2016. This shows how China’s economic development is still in a critical stage of transformation at a time when the old growth drivers are being increasingly replaced by new ones. For India, the growth path will continue despite the hurdles at home. There are pitfalls of globalisation, but both India and China have understood this and also realised the benefits as well. But Thomas Friedman's ‘Flat World' needs to be pursued by these Asian giants with what prominent economist Jagdish Bhagwati said: “Globalisation is good, but not good enough.” Both India and china have to see to it that the majority of their populations is not pushed to the periphery in the name of promoting global economy.