The rise of China and India: implications for the world-economy?

ASIA - May 22, 2012

CIDOB and Casa Asia organize, On May 17 CIDOB a lecture by Ravi Palat, professor at State University of New York at Binghamton and senior visitant researcher at CIDOB. The event is moderated by Jordi Vaquer, director of CIDOB and Rafael Bueno, director of Politics and Society at Casa Asia.

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CIDOB and Casa Asia organize, On May 17 CIDOB a lecture by Ravi Palat, professor at State University of New York at Binghamton and senior visitant researcher at CIDOB. The event is moderated by Jordi Vaquer, director of CIDOB and Rafael Bueno, director of Politics and Society at Casa Asia.

Against the backdrop of economic growth in China and India and their impact on international economic and political relations, Prof. Palat reflects on a fundamental transformation of the capitalist production model, not seen since the beginning of the industrial revolution. Viewing the rise of China and India from a historical perspective, , the author argues that the rise of these two large Asian economies is different from the rise of other "miracle economies" that in each decade over the last 50 years were presented as a model only to see it being tarnished rapidly. In the case of China and India it is a different situation not only because of their enormous demographic weight, but also because of the environment in which they find themselves. In fact, he says - Chinese and Indians if necessary, could constitute their own "world" in itself. During his presentation, the author is right to point out that there is a crisis of capitalism, and that it is not limited to the "geriatric" model of the West that experiences the relocation of production and that displaces its capital to financial speculation and accumulation. He reminds also that China today is not only the leading producer of goods but as entire supply chains have shifted there and it can mobilize engineers, skilled workers, and resources more quickly and efficiently than the rest, it has a great comparative advantage. Industrial production however no longer brings in much profits and though we describe the richest countries as the G8, their wealth stems increasingly from their control of financial flows and these are now threatened by the contagion of the global financial crisis. Meanwhile, the increasing automation of production processes, which skips previous stages in the industrialization process is detrimental to labor, even in Asia, where economic growth has led to an increase of inequalities of wealth and income. It is true that some improvements have been achieved for large pockets of poor, but the system continues to reward more those at the top, stretching the edges of the social pyramid and condemning the poor to new forms of discrimination and neglect, as in rural areas of India where 250,000 farmers have taken their lives in the last 10 years burdened by debt. In concluding his presentation, and by maximizing its focus of analysis, the author argues that we are at the end of a systemic process of accumulation and the beginning of another, under new conditions that will necessarily be modulated by China and India, that together represent forty percent of the world's population.

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