As Bible students, we all are aware of the allusions to the "Kings of the
East" in the prophetic scenario:
And the sixth angel poured out his vial upon the great river Euphrates;
and the water thereof was dried up, that the way of the kings of the east might
In response, we all have become aware of the spectacular rise of China on the
world scene. Just as Henry Luce dubbed the 20th century as "the
American Century," many are recognizing that the 21st century will be
"the Asian Century." And China's achievements are spectacular, indeed. In just
one generation, they have tripled their per capita income, and lifted
over 300 million people out of poverty! And they now have become the
major competitor for energy and other commodities (see
But with all of the spotlights singling out China, there is another -
overlooked - giant rising in the east: India.
Few people realize the remarkable emergence of India in the global
technological culture, which is destined to dominate the next few decades. Their
research and development centers are sprouting everywhere and are the seedbeds
of the most advanced software platforms, multimedia devices, and other
Major companies, such as Motorola, Hewlett-Packard, and Cisco Systems, are
looking to laboratories in India for their most advanced product developments.
Their advanced 3-D computer simulations are tweaking designs for car engines and
aircraft wings for clients like General Motors and Boeing. India's Bangalore
Research Hub is spawning companies that produce their own chip designs,
software, and pharmaceuticals.
Daniel Sheinman, Cisco Systems' senior vice president for corporate
development, declares, "We came to India for the costs, we stayed for the
quality, and we're now investing for the innovation."
Just as China has emerged as a mass manufacturer, India is emerging as a
giant in services. Technical and managerial strengths in both China and India
are becoming more important that cheap assembly labor. And, their relative
strengths are complementary, not competitive.
For example, China has excelled in mass manufacturing, with multi-billion
electronics and heavy industrial plants; India has specialized in software,
design, services, and precision industry. Their efficiency in back-office
processing alone is legendary and outsourcing such work is expected to quadruple
by 2010 to over $56 billion per year!
These two emerging giants will transform the entire global economy. China and
India account for one-third of the world's population. For the past two decades,
China has been growing at 9.5% per year, and India at 6% per year. Both are
projected to continue at an annual rate of 7-8% for at least the next ten
years. This is, in some ways, analogous to 19th century
America, when a young, driven workforce grabbed the lead in agriculture,
apparel, and the high-tech innovations of that era: steam engines, the
telegraph, and electric lights. Similarly, these two emerging giants are
positioning themselves at the vanguard of the critical technologies of the
Tools For Growth
China's passenger car market in 2005 will reach three million per year (#3 in
the world). It is this emergent transportation market that is already stretching
the supply of oil on the world scene. Goldman Sachs is predicting $105/barrel on
the horizon, as you may recall from our article in last month's edition of
China now has the world's largest base of cellular phone subscribers: 350
million! They are expected to reach 600 million by 2009. India, too, has
rocketed from 5.6 million to 55 million since 2000 (see chart). China is
expected to overtake the U.S. in homes connected to broadband in two years, and
it will remain the manufacturing giant, but India will soar in technology and
services (see chart).
Yet, two-thirds of China's 13,000 listed companies don't earn back their true
cost of capital. India, by contrast, has had to develop with scarcity. India
also has Western institutions, a modern stock market, and private banks and
corporations. They posted an average of 16.7% return on capital in 2004 (vs.
12.8% in China). In addition, India’s banks are in much better shape. Over 20%
of China’s bank loans are bad. However, China has lured more foreign investment
and so China has surged ahead of India in per capita GDP.
But India’s younger workforce will give it a chance to catch up. Due to its
one-child policy, China’s working age population will peak at 1 billion in 2015
and then shrink steadily.) India has nearly 500 million people (twice the
population of the U.S.) under the age of 19 and higher fertility rates. By
mid-century, India is expected to have 1.6 billion people, 220 million more
workers than China.
There are some ominous factors that will challenge the management of the
potential growth ahead:
- One million premature deaths in China and India attributed to air
- 30 million are projected to be infected by HIV/AIDS by 2010.
- 203 million workers without full time employment: 9.2% unemployment in
India; 20% unemployment in China.
Each of these is a serious management challenge and a serious source of
instability. But, barring any cataclysms, within three decades India should pass
Germany as the world’s third largest economy. By mid-century, China should
overtake the U.S. as #1. Together, China and India could account for almost half
of the total global output (see chart)!
In considering the growth projections for Asia, it is also sobering to
reconsider the optimistic projections for the United States. For instance, most
of the U.S. projections ignore such factors as the killing of one out of every
four babies who otherwise would have entered the workforce. (Since Roe vs. Wade,
out of 127 million births, 48 million were murdered.) Also, serious challenges
lie ahead to maintain global market share under the increased competition in
technology, education, and other factors.
The commitment to education in both China and India dramatically overshadows
the development of young professionals being produced in the U.S.
We will review more of these developments in our upcoming briefing package,
The Rise of the Kings of the East. We should all aspire to be like the “sons of
Issachar,” who understood the times and knew what they had to do (1 Chr 12:32).