India and China set to rule this century

India and China are set to dominate in a new post-western world but “that did not necessarily mean that the USA and Europe have had it,” the last governor of Hong Kong, Chris Patten, has said.

Patten, now Chancellor of Oxford University, made the remarks in a speech he gave at a recent alumni weekend, held by the university.

Chris Patten speaking at Oxford

Lord Patten of Barnes, famed for handing back the sovereignty of Hong Kong to the People's Republic of China in 1997 marking the end of British rule, told the audience of Oxford alumni that there had been a major shift in the global balance of economic power and that India and China would dominate this century, creating a new global hierarchy dominated by the East.

In his speech, ‘What next? Surviving the 21^st century’, based on his namesake book, he spoke of a “fin de siècle” mood pervading America and Europe. But he said he did not accept that the world today was more dangerous than before, pointing out that at the time of the 1962 Cuban Missile Crisis, which coincided with his first term as a student at Oxford University, “the world appeared to be teetering on the edge of nuclear Armageddon.” I don’t think that things are as dangerous today as that,” he added.

While the world knew what it needed to do in order to survive, at present it appeared to “lack the political leadership and international political capacity to rise to the challenge,” he claimed. “We know what needs to be done from the Middle East to climate change. We know the sorts of things the international community should be doing in order to find a sustainable solution,” he went on.

The former Conservative MP and European Commissioner warned that the world population, which increased fourfold in the 20th century, was set to increase from 6.9 billion by a further 2.1 billion by 2050 and the majority of that increase would be in very poor countries, most of which already faced political instability and considerable environmental stress. “The only rich country in the top 10 where population is increasing now is the USA,” he added.

Speaking at The Sheldonian Theatre, where Oxford’s matriculation and graduation ceremonies are held, Patten said we can expect to see an explosion of growth in the numbers of people living cities (which increased 13-fold in the past century), especially in China (where it’s reckoned a billion people will live in cities by 2050). He said we could also expect to see an increase in energy consumption which had already increased 13 fold in the past century because industrial output had increased 40 times and also increased water use (which had increased ninefold in the past century), including possible conflict over water resources between India and China in the future and increased carbon monoxide emissions (which had already increased 17 times in the past century.) All of this was “posing probably the biggest issue for diplomacy, arguably since [The Treaty of] Versailles,” he claimed.

He then spoke of the India growth story and visible power shift already taking place. India has several multinational companies with global brands against which other companies benchmark themselves like Tata, Reliance and Infosys, he said.

“India now invests more in the UK than the UK invests in India,” he added.  He said by 2040 India would probably have the largest population in the world and Chinese pensioners would be the second largest.

China is currently the second largest economy in the world but, by the 2020s, China would overtake the USA to become the largest economy in the world, Patten said.

“It’s a world you can very properly describe as post western. Asia no longer has to define modernity in western terms,” he said.

But he pointed out that it was not all doom and gloom for Europe. While Europe currently had only had seven to 10 per cent of the world’s population, it still produced 21-22 per cent of the world’s output, he said.

 “And there here are serious problems confronting both India and China,” Patten warned and then spoke of the “steady federalisation of the polity in India”.

He pointed out that Gujarat, where more than 1,000 people were killed in the 2002 communal riots, which accounts for just 5 per cent of India’s population, actually contributes 16 per cent of India’s output and 22 per cent of exports.

He also spoke of India suffering from “a criminalisation of politics”, “terrible levels of corruption” which “have raised questions right across the board about the nature of representative democracy in India and about the integrity of legislature, judiciary and bureaucracy."

 “There are three Chief Justices in India today who face criminal charges,” he said. He said the country had “terrible infrastructure problems” and yet the country had “pockets of extraordinary prosperity and sophistication” surrounded by “terrible poverty and awful corruption.”

He then moved on to China. “China also faces huge problems despite its extraordinary economic achievements, with a 1600 per cent increase in its exports to America over the last 15 years, China faces, as does India, huge environmental challenges,” he said.

He said China faced the problem of how to rebalance its economy moving from substantial dependence on manufactured exports to greater investment in domestic infrastructure and greater encouragement of consumption. Despite a huge boom in exports, wages in China remain low. Wages in China, as a proportion of the economy, have fallen from approximately 53 per cent of GDP to less than 40 per cent. Patten also questioned how far China could open up its economy and embrace social and technological change, while keeping an iron grip on its politics.

He hinted that India and China may have to take centre stage not just economically but in global politics and international bodies and affairs too.

“With the US political system gridlocked and with Europe obsessed with its own problems, where will we look to for leadership?” he asked. He said bodies created in the 1940s such as the United Nations were falling to pieces and lacked “moral and political authority” and “ structures were needed” to deal with international cross border problems such as climate change and organised crime.

When considering whether leadership should come from Europe, the 67-year-old former student of Balliol College, who is also chairman of the BBC Trust, pointed out the currency union was falling apart because of the difficulties of running monetary policy with one hand and fiscal policy with another.

When asked about immigration, Patten, a Catholic, who oversaw the oversaw the Pope’s visit to Britain in September 2010, said that populations were falling fast in Europe, especially in Italy, Spain and Poland and the number of people in work supporting those in retirement was falling extremely fast. The consequences of rapidly ageing populations and lower fertility rates meant greater immigration would be required to provide jobs and services in Europe. But he warned Europe would see “some of the tensions” that arise when there is no rapid economic growth alongside mass immigration. He said immigration into Europe was also likely to increase owing to natural disasters elsewhere.

Responding to a question on why British schools weren’t concentrating on teaching Hindi and Mandarin in the light of his forecast, he replied, “My daughter learnt Hindi to appear in a Bollywood film,” referring to Alice Patten, who starred as struggling British filmmaker Sue McKinley  in the hit Hindi movie Rang De Basanti. In an apparent attack on Britain’s youth, he added: “We need to teach them English first.”

The alumni weekend, named Meeting Minds – 21st century challenges, offered a packed three-day programme of more than 120 events for alumni.

Oxford academics from a range of departments delivered lectures showing how they were tackling a range of global challenges from population growth to increased energy consumption, climate change, lives spent on social networking sites, the science behind earthquakes and emerging infectious diseases.

A highlight was a ‘Mathematical Tour of Oxford’ by Professor Marcus du Sautoy, who had presented the BBC documentary ‘The Story of Maths’, which had revealed that Indians had made many of the key mathematical breakthroughs in the world before the West had and before Sir Isaac Newton was born, including inventing the zero, despite common misapprehensions that Maths was a Western invention. © Naomi Canton 2011