Much ado about nothing? World-historical implications of the re-emergence of China and India

Abstract

China and India's increasing prominence in the world economy has not been accompanied by an equally prominent role for them in world politics. The opening up of the two giant trans-Himalayan neighbors has allowed corporations to fragment production operations into part-processes and distribute them across the planet to benefit from wage and cost differentials. This has significantly impaired the strength of domestic manufacturing lobbies and of industrial labor and led to the hollowing out of manufacturing sectors and the widening of inequalities in income and wealth everywhere. New forms of industrial organizations emerging in China and India – hybrid state–private partnership arrangements and large diversified corporations – have not been conducive to creating well-paying jobs or the self-organization of workers that has thus far been the hallmark of industrial capitalism in leading states. This set the stage for a worldwide depoliticization of politics. In the West, though it was articulated differently given distinct political formations, the decline of industrial labor and the greater political organization of big business led to a rightward shift in politics with the Reagan and Thatcher governments. The influence of US universities was felt worldwide as they attracted students from all over. In both China and India, the rise of a substantial middle class whose interests were tied to their comperes in the United States led them to acquiesce in US domination on the world stage. In these conditions, the onset of a financial crisis in 2008 may have set the stage for the beginnings of a major transformation. China responded with a massive stimulus program that benefitted many resource-rich and energy-rich states. And China's continuing need for energy and strategic industrial raw materials lead to the possibility of greater confrontation with the United States over Iran and other issues while the growth of a domestic market lessens reliance on exports to the United States. Indian conglomerates have not only used the opportunity presented by the crisis to make major corporate acquisitions overseas but the looming US withdrawal from Afghanistan is also leading New Delhi to reassess its role in the region in the context of its rivalry with Pakistan.