For over three decades, supporters and critics of globalization considered it a synonym for Americanization. Emblematic of this American globalization was corporate America’s sway over the world, shown by the omnipresent Golden Arches of MacDonald’s and the vermillion red billboards proclaiming “Things go better with Coke”. The arches and Coca-Cola billboards with different slogans are still there but the fizz has gone out of Americanized globalization.
A Chinese export freighter
Today the new champions of globalization are yesterday’s poor developing countries especially Asia – led by China and India. ‘Made in China’ products fill the supermarket shelves of the West, reminding one that China is the world’s second largest exporter, the second biggest economy and the top creditor. Long known for its backwardness, Indian software companies now run the world’s back offices and Indian billionaires are on a shopping spree in the developed West. The rise of Asia as the new globalizer is nothing short of spectacular, yet in the long perspective of history not that surprising. The two most populous countries that dominated the world economy for over a millennium until the 18th century are regaining ground after a brief hiatus.
China and India have long played a critical role in the process of interconnection called globalization. The riparian civilizations, endowed with rich agriculture, natural resources and large populations with manufacturing skills had supplied the world the wherewithal of a better life – from spices to silk and jewelry to porcelain. When, on the morning of May 21, 1498 the Portuguese adventurer Vasco da Gama sailed into Calicut, India he was dazzled. He described the port as “bursting with merchandise of every kind, thanks to its maritime traffic with other lands from China to the Nile.” Chinese port cities from Guangzhou to Huating (later renamed Shanghai) too were bustling places of commerce as was the entrepot of Malacca straddling the Chinese and Indian worlds. Large communities of foreign merchants flocked there, not unlike present businesses of the world moving to Shanghai and Beijing.
Kublai Khan giving a paiza - a gold permit to travel - to Marco Polo (from “The Travels of Marco Polo”)
Marco Polo wrote about the port of Quanzhou or Zaitun: “It is the port,” Marco Polo wrote, “where all ships from India come laden with much costly merchandise and a multitude of extremely valuable precious stones and big rare pearls...in this port there is a constant movement of such vast amounts of goods and precious stones that it is a marvelous thing to see.” Before the age of ocean commerce, the Silk Road terminus – the city of Changan (today’s Xian) – was the greatest urban center in the world with nearly two million inhabitants comprising of traders of many faiths– Muslims, Jews, Nestorian Christians and Buddhists.
Asia’s luxuries drew European traders who often felt like kids in a candy store without money in their pockets. Asians traders were not interested in European trinkets and fur; they wanted precious metal in exchange of their produce. It was only after Christopher Columbus’s serendipitous arrival in the New World that Europeans came to discover bountiful supplies of Inca gold and silver to be traded in Asia for luxuries. In order to work the mines and plantations in the New World, Europeans turned to Africa for slaves. In a triangular trade, Latin American silver bought tea, spices, porcelain and textiles from Asia; it bought Indian clothes to exchange for African slaves who were made to work in the sugarcane and coffee plantations to supply those commodities to European consumers. Europe imported some 1,700 tons of gold and 73,000 tons of silver from the New World about a third of which found its way to China and India.
India’s steel ingot was highly sought to produce the famous Damascus sword. China’s modern smelting produced iron merchandise for shipment to Europe. Historian Robert Hartwell estimated that iron production in China in 1078 was approximately 150,000 tons annually –more than the entire production of iron and steel in Europe in 1700. It is not surprising that, according to historian Angus Madison’s calculation, in 1700, China and India together produced nearly half of the world’s Gross Domestic Product.
Imaginary drawing of a pepper harvest (from “The Travels of Marco Polo”)
Asia’s reign over world commerce and cultural exchange gradually gave way to the resurgent Europe, its industrial revolution and its military might. India’s monopoly over the cotton textile trade was broken by the British mills running on steam power. India languished as British colonial rulers forced farmers to grow indigo and opium for export and thrust opium on China in exchange of Chinese exports. Wounded, an inward looking imperial China and colonial India receded from the world scene. Even after independence, brutal socialism in China and a socialistic-bureaucratic state in India prolonged their under-development.
Asia’s revival began in the 1980s with reforms by Deng Xiaoping in China and a decade later by Manmohan Singh in India. The reforms largely removed the obstacles that held back these countries from using their millennia old skills for productivity. As doors were opened to foreign capital and technology, and economy opened to private enterprise, China entered a growth spurt – an annual GDP growth of 9.6 percent for two decades. Foreign businesses flocked to China to take advantage of its skilled cheap labor, in the process turning the country into the world’s factory. From less than 2 percent of the world’s share of manufacturing, China rose to 8.3 percent in 2004, becoming the world’s biggest supplier of clothes, toys, shoes and consumer electronics. In 2010, China overtook Japan as the world’s second largest economy, after having dislodged Germany to become the top exporter of the world. China’s share of world export has risen from less than one percent in the 1970s to over 12 percent last year (2010). In the same period, the US share dropped nearly 14 percent to just over 8 percent.
To fuel its export engine China, has scoured the world to acquire energy, minerals and other natural resources and has emerged as the biggest donor of aid to Africa. By 2035, China will be consuming a fifth of all global energy; it already buys 22 percent of Australian raw material exports, 12 percent of Brazil's and 10 percent of South Africa's exports. China’s own export clout has been translated to a record reserve of 3 trillion dollars, some 900 billion dollars of which consists of US debt. A wealthy China has emerged as a helper in a financial crisis. Chinese purchase of Greek government bonds helped to diffuse the country’s recent crisis. If additional proof was needed for China’s rise as a global economic superpower it came in December 2010 when Portuguese officials traveled to China to seek its help in averting a Greek-style default.
Along with China’s massive economic growth, its culture too, is enjoying a revival. The Chinese government has helped set up some 500 Confucius Centers to teach Chinese in 80 countries. According to Beijing, 40 million people worldwide are learning Chinese.
Two Indian programmers, the India's main technological export
India’s recent rise was occasioned by a jolt from the 1991 crisis which forced India to dismantle its license raj and open the door to the world. India’s long-standing lead in mathematics came in handy as the Silicon Valley revolution opened up unprecedented business opportunities. The immediate opportunity arose from the scare about the Millennium bug when India’s programming help was sought by hundreds of foreign corporations. Just like Western corporations who flocked to China for efficient and cheap manufacturing and assembly, they found India’s English, math and engineering skills ideal for running back offices and providing components and offering services from call centers to research centers. Cheap fiber optic connections across oceans provided the new highway for commerce in services.
Although India is far behind China, it is one of the fastest growing economies and is the 12th largest. Its steady economic growth has boosted its coffers and allowed rich companies to go hunting for assets abroad – totaling over $100 billion invested by Indian businesses outside India in just four years of the last decade. As it regains its industrial leg, India’s demographic advantage of a young population (while China’s graying population begins to retire) might help India to become another of the world’s factories.
It hasnot yet gained fashionable currency or become a vogue but soon globalization may be known as Asianization.
Nayan Chanda is editor of YaleGlobal Online (www.yaleglobal.yale.edu) and author of Bound Together: How Traders, Preachers, Adventurers and Warriors Shaped Globalization (Yale University Press, 2007)
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30/12/14
from 01/04/12 to 31/03/13
