The World Under Pressure: How China and India Are Influencing the Global Economy and Environment Book

List of Figures xi

List of Tables xiii

Preface xv

Acknowledgments xvii

List of Abbreviations xxi

1 Rising Powers 1

Why This Book? The Rise of These Two Powers Is Stressing the Global System 1

Structure of the Book: Review the Past to Get Insights into the Present and the Future 4

2 Insights from History of Power Shifts and Growing Interdependence 8

Conflicting Theories Provide Relevant Perspectives 9

This Book Uses a Broad Framework to Analyze and Track Power Shifts 14

2000-Year Overview of the Rise and Decline of Power Shows Frictions Spiral into Wars and Changes of the Global System 38

There Have Been Significant Shifts in Economic Size Even in the Last 30 Years 41

Conclusion: The History of Power Shifts Is Not Reassuring 42

3 Understanding the Rapid Rise of China and India 45

Basic Comparisons 46

Some Similarities in Otherwise Very Different Histories 48

A Macroaccounting for the Differences in Growth 50

The Type and Role of Government 53

Two Contrasting Growth Strategies 56

Acquiring Technology from the Rest of the World 65

Conclusion: Both Countries' Growth Is Largely Driven by Technological Catch-Up and Participation in the International System 71

4 Positive Growth Prospects for China and India 74

The Impact of the 2008-2009 Financial Crisis on China and India 75

Long-Term Projections for Growth of China and India 76

China and India Face Daunting Challenges 79

Both Countries Are Increasing Their Competitiveness 93

Part of Their New Competitive Advantage Is Their Growing Critical Mass in Higher Education 94

They Are Also Moving from Imitation to Innovation 99

Both Countries Are Likely to Continue to Grow Much Faster Than the World Average for the Next Two Decades 109

5 Growing Economic and Geopolitical Impact 112

Positive and Negative Impact Through Increased Trade 113

From China's Trade Surpluses to Global Imbalances 126

Growing Foreign Direct Investment (FDI) 135

A Tilted Technology Playing Field 143

Growing Geopolitical Impact of the Rise of China 149

6 Environmental and Natural Resource Impact 154

China and India Are Resource Poor 155

The Rapid Growth of China and India Combined with Their Large Populations Is Creating Global Environmental Sustainability Problems 161

China and India Will Account for the Majority of Global Increase in Energy Demand and C02 Emissions from 2008 to 2035 163

There Is a Stalemate on Action to Deal with Climate Change Because It Is a Zero-Sum Game 171

Technological Innovation Is a Way to Break the Climate Change Deadlock, but Not Enough Investments in R&D Are Being Made 175

There Is Also Increasing Pressure on the Environment from the Growth of Other Developing Countries 180

Power Shifts and Rising Frictions Have Implications for the Global System and the United States 182

The Rapid Rise of China and India Is Putting Pressure on the Global Governance System 183

Growing Friction Areas Are Beyond the Current Capabilities of the International System 183

Risks That Frictions May Lead to Greater Problems 189

Evolution Within the Existing System or the Rise of a New System? 198

What Can/Should the United States Do? 205

8 How Will the World Adjust to the Swift Ascent of China and India? 209

Alternative Scenarios 209

Moving Toward a More Sustainable System 214

Implications for Other Developing Countries Vary 229

Conclusion: The Main Powers Need to Take Stronger Actions to Ensure a More Sustainable and Equitable Global System 232

Notes 235

References 275

Index 291