As China and India’s opposition to America’s interference in the Middle East intensify’s over oil, Time magazine has carried two very significant articles – one clearly explaining the decaying American economy and the second glorifying India and China’s positions as providers of American jobs and creators of global value. Signifying a systematic change from deifying the land of the free, to epitomizing the glorious growth of China and India, America’s stance, reflected by its media shows a growing concern for their declining economy and urgency to align themselves with stronger superpowers.
For China and India, it proves their mettle against western powers and also signify’s validation of the re-emergence of the Chinese and Indian economies, we no longer need the US, this fundamental thought process is slowly but surely growing steam, not only from communists in both China and India, but also from liberals who realise that India and China have the potential to excel, to become greater than our present day powers. So is a cyclical change in the offing? Is this the beginning of the end of the American dream and will the US too crumble like the Roman Empire into Italy?… Excerpts from the two articles –
Sombre analyses of America’s decline come in waves and the latest seems to be gathering strength. “AMERICAN DECLINE. This Time It’s Real” proclaims a recent magazine cover. “Yes, America is in Decline,” echoes another. Time to prepare obituaries for the world’s remaining superpower?
For one America made its millions decisions about education, infrastructure and the like — were made decades ago today according to the Organisation for Economic Co-operation and Development (OECD), America’s 15-year-olds rank 17th in the world in science and 25th in math. They rank 12th among developed countries in college graduation (down from No. 1 for decades). They come in 79th in elementary-school enrollment and their infrastructure is ranked 23rd in the world, well behind that of every other major advanced economy, other indicators too such as health and social security too do not bode well.
Many of these changes have taken place not because of America’s missteps but because other countries are now playing the same game we are — and playing to win, says Fareed Zakaria in his piece. “The decline argument…is driven by concern about the vast federal deficits of recent years and, consequently, the immense growth of the national debt. It reflects apprehensions regarding the deficits in the balance of trade, the necessity to borrow staggering sums abroad and the dramatic shift of the United States from a great creditor nation to the world’s largest debtor.”
So if America is on the decline as the declinists say, how are India and China going to contribute to global growth and pay American bills? The secret lies in our labour forces – The growth in China and India is having an equally dramatic impact on the workers of those countries as well, and that is transforming the Indian and Chinese economies. Despite the giant size of their populations, neither nation has a bottomless supply of cheap labor. China is going through major demographic changes as a result of its one-child policy. In India, no matter how many potential IT workers might live in the country, the reality is only a small subset of the available workforce is qualified for high-tech or business services jobs. As a result, wages in both countries, especially in export-oriented or high-skill sectors, are rising rapidly. In fact, the Chinese leadership has made improving worker incomes a top priority in its latest five-year plan.
What does that mean? As I mentioned above, the average Chinese or Indian will have more money to splurge on all kinds of stuff, creating jobs. But it also means that China and India will face challenges to their own competitiveness over time as labor costs rise. (It’s already starting to happen, with China losing out in basic manufacturing to lower-wage countries like Vietnam.) The labor-cost playing field will start to become more level between China, India and the developed world. That will help U.S. and European workers compete with Indian and Chinese workers (albeit far down the road). Even more, the rapid development of China and India could increase the demand for skilled workers around the world. To maintain their growth as costs escalate, China and India will have to compete more and more on technology, innovation, productivity, marketing and other aspects of business, and firms in those countries will need to seek out the talent necessary to compete in these areas. The workers in the U.S. and other developed nations already have clear advantages in those areas. So why wouldn’t Chinese and Indian employers want to hire them, perhaps in ever greater numbers? In other words, the competitive position between the world’s biggest economies is changing all of the time, and that will have implications for the creation (and location) of jobs in the future.