New Thinking in Political Economy series
Edited by Andreas Bergh and Rolf Höijer
Chapter 10: Asia’s Giants in the World Economy: China and India
Erich Weede 10.1 INTRODUCTION For millennia most of mankind has survived close to starvation level. For centuries most of mankind has lived in Asia. Together China and India account for nearly 40 per cent of mankind and about half of the population of less developed countries. Moreover, China and India embody distinct civilizations and almost unite them within a single state.1 During the nineteenth and twentieth centuries, a peninsula and subcontinent attached to Asia, that is, Europe and its North American and Australasian daughter societies overcame mass poverty (Collins 1986; Jones 1981; Landes 1998, 2006; Maddison 2001; North 1990; Weber 1923/1981; Weede 1996, 2000). Soon thereafter Japan joined the West in making economic development its top priority. After World War II, the original four tigers at the edge of East Asia – Singapore, Hong Kong, Taiwan and South Korea – followed. But most of mainland Asia, and therefore most of mankind, remained mired in stagnation and poverty at least until the late 1970s. Certainly until then, and possibly until the end of the second millennium, the gap between developed and less developed countries widened and the global distribution of income became less and less equal (Collier and Dollar 2002; The Economist 2004; Firebaugh 1999; Ravallion 2004; Wolf 2004, chapter 9). Once China and India, however, joined the capitalist market economies, once capitalism became truly global, it became possible to argue that mainland Asia is catching up,2 that global growth is good for the poor (Dollar and Kraay, 2002) and that global...
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