Monday, November 8, 2010

US chooses India

I have been wondering for awhile which way the Americans would jump for the future of their economy. Would it be China or would it be India? Obama has made it clear from his recent announcement in India that he would back a seat for India on the UN Security counsel that the US is jumping in with India. With China holding so much of American debt, with the long standing relationship with India's high tech sector and with the current issues of monetary policy between China and the US, I can see Obama's logic.

India is not expected to prevail against China in the short run but because of their youthful, well educated population. The expectation of the world is that India will ultimately surpass China. China has the lead in terms of the world economy today but many people worry that its one child policy will come back to bite them as their population is aging rapidly.

India is a stable and committed democracy. It also appears to me to be more warlike in its leanings. China on the other hand is resisting democracy and it run by committees who target long term solutions to today's and the future's issues. Democracies can be slower to adapt because there are more people to include in the deliberations and the decisions. Governments like China's can do more long term strategic planning that will be followed through. While China has an aging population, China is not short of people in any age category (except perhaps marriable young women).

For my life time, I am still putting my money on China. They have historically been focused, productive, less warlike (which I see as a severe drain on potential prosperity) and they hold many of the financial cards at the moment. Canada has the resources that it needs and Canada does not have to choose in an either or fashion between these two nations.

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