In China, the newly prosperous show off by sipping pricey Starbucks coffee, and workers in “disassembly lines” produce parts that will be incorporated into finished goods made all over the world. In India, in a reversal of the brain drain, the well-educated elite return home to find work.
The transformations of India and China into global powerhouses “are as stunning as any the world has seen since America itself emerged onto the world economic stage,” writes Robyn Meredith in her new book The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us. Meredith, a Hong Kong-based correspondent for Fortune magazine, spoke over telephone from San Francisco.
Describe the different paths to growth that China and India have taken. Do you think they are equally sustainable?
China has many internal problems, but it has defied predictions that it would collapse for years and years. It has been growing at more than 10% for a number of years, 11% last year. I see it continuing to grow rapidly and steadily.
For India, the path will be much bumpier, but in the long run India will get there too. India is like an elephant: It’s trudging into the future slowly and steadily, sometimes taking detours along the way, but it will get there. China is flying fast and furious, but it scares us sometimes. That’s why I call China the dragon.
We tend to think of India as being dominated by call centres. How far is that stereotype from reality?
There are many other jobs in India now that used to be in the US. For instance, most Americans who pay a big accounting firm to do their taxes don’t know that they are being prepared by an accountant in India.
Hollywood movies are animated in India now. My favourite trend is that product designers—engineers who design consumer products—are designing them in India for multinational companies, and then, of course, the companies are making them in China. So, you’re seeing the global economy knitting together in a way that it wasn’t able to 10 years ago.
What are some of the adjustments the US needs to make to compete?
The main one is education. We have got to fix our K-12 education system. It’s abysmal. American students are falling behind just when we can least afford for that to happen.
And we’ve got to reverse the trend since the early 1990s in which a college education has been getting less rather than more affordable.
Second, we need to build safety nets underneath people. We’re going to face incredible amounts of job churn. That is, more and more people will lose their jobs and need to find new ones. The labour market is simply going to be more volatile.
So even lawyers and investment bankers are at risk?
Absolutely. In fact, a number of investment bankers are already being hired in India. As for lawyers, a huge portion of discovery work in American trials has already been moved to India, not just by the big law firms but even by mid-sized and smaller ones.