Friday, May 5, 2017

The Elephant and the Dragon

The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us
© 2007  Robyn Meredith
272 pages

For most of the 20th century, Europe and the United States enjoyed an outsided influence on global trade, in part because  large portions of the world had sealed themselves off, stewing in their own ideological juices and maintaining impoverished populations. As the 20th began to give way to the 21st, however,  the eastern world re-opened. The Elephant and the Dragon begins with a historical note explaining how China and India came to renew their participation in the global economy, then appraises the ways their surging involvement has altered that global system and themselves.  Written and published before the 'great recession' -- observing then things now taken for granted, like offshoring -- the book is presumably not quite as relevant as it was on its publication.  The fundamental transformations Meredith observes, however, are still in effect.

Why the 'elephant and the tiger', instead of 'the Asian tigers'?  Meredith views India's economy as pachydermesque in that while it was slow to get to its feet, slower still to get moving,  it will be all the more harder to stop as it picks up speed.  Its energy will come not from one point -- the Politburo -- but from billions of Indians, driving forward towards the future they want.   India's economic revival came seemingly as a last resort, when in 1992 its leadership recognized that the country was broke.  Although the liberalization that followed allowed India to use its existing resources (a strong number of English-speaking professionals) to better effect,  its lack of more material resources -- infrastructure like highways and modern airports -- prevented it from becoming an instant industrial power like China.   India liberalized at just the right time,  becoming an important part of the expanding information technology sector.  What began with the dot come surge  has continued to the point that India had become the western world's "back office". its workers supplying customer service ,tech support,  computer programming, and the like.  By now (2017), India's economy has grown being merely the support staff of the west, however.

China's own 'liberalization' -- economic, not political -- began in 1978 when Mao's successor realized the middle kingdom was falling far behind the west,  and needed to adopt some of its methods if only out of self defense. (Even during the Mao years, China had learned from Russia's mistakes and so avoided total public control of agriculture.)   Although the communist party's pivot towards capitalism meant ceding constant command of the economy, the Party maintains absolute political control and still 'guides' the economy by establishing long-term goals, like an expansion of the highway system.  Although westerners commonly regard China's trade advantage as being desperately cheap labor, in reality there are many places with cheaper labor.  China combines relatively cheap labor with industrial infrastructure and a government interested in stable growth.

The Elephant and the Dragon is largely oriented toward the world of business, using India and China to illustrate how crucial offshoring and vast supply chains have become to the global economy.  Goods are not simply made in a Chinese factory; they pass from city to city in varying stages of completeness, which is why online retailers can offer so much customization.  "Made in" labels have lost all real meaning, for a given good will have been produced from goods and materials from across Asia, with other components added in by the United States and Europe.  Is a car finished in the United States, but from parts produced in China and Mexico, truly 'made in America'?  

While there are more current books, for someone interested in the course of globalization -- particularly the intermingling of the Asia and western economies -- this is still a good start.


  1. India, and especially China, are most definitely the places to watch in the next 100 years. I often, somewhat laughingly, advise new parents that if they want their children to be successful in their futures to learn Chinese as soon as possible. It'd give them, I say, one heck of an advantage!

    Oh, and another book about this issue you might enjoy:

    Why the West Rules - For Now by Ian Morris (2010)

    It's in one of my TBR piles but looks the part and has an impressive bibliography [grin]

  2. Books with impressive bibliographies are dangerous -- they always lead to more books!

    1. People have remarked before that when I pick up a book I check out the title, blurb, contents page and bibliography.... because you can *never* have enough ideas for even more books!

  3. very interesting post... i'm inexcusably ignorant about international finance, but, in the interest of fighting severe depression, i'll probably keep it that way...

    1. It's not so bad...reading about India and China rising out of poverty is heartening, in fact!


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