Sunday, April 10, 2005

Seismic Shifts

Beyond the headlines of the European media, Chinese Prime Minister Wen Jiabao is now paying an extended visit to India.

It's a first in many respects. The two countries went to war in 1962, and the border issues over whjich that war was fought haven't yet been resolved. Relations between the two giants of Asia have been characterized by an odd combination of ignorance and suspicion.

But now both of them are entering the global economy at a breathtaking speed, anmd they are starting to see not only that they can learn from each other but that they might even be able to work togethjer on specific issues.

It was highly symbolic that Wen Jiabao started his visit not in the capital of Delhi but in the busting IT center of Bangalore in the dynamic South of the country. While China clearly has the lead in different areas of manufacturing, there is no doubt that India is well ahead in terms of sophisticated services and software. Wen Jiabao has a lot to learn in Bangalore.

And the rest of us have every reason to note what's happening. Together, China and India represent a third of humanity, and a very high proportion of the dynamism in the global economy of today.

While China is developing as the production superpower, India develops as the service superpower. But both of them need to sort out their remaining problems - the border - and they are also likely to talk about their common hunger for energy.

Their exports of goods and services, and their hunger for oil and gas, will be among the key drivers of global economic developments in the years to come.