The Emergence of Two New Dragons

"You are the best in software, and we are the best in hardware. Our combined efforts will make us the No.1 in the world," said Chinese Prime Minister Zhu Rongji upon his visit to New Delhi in January 2002. This seemingly ungrounded idea amid the ongoing conflict over national boundaries at that time, has become real. After taking steps to eliminate their military and diplomatic disputes, China and India, the two most populous countries in the world, have started to speed up their economic ties through strategic alliances, heralding a whole new order of global economy.

The movement is expected to accelerate after Chinese Premier Wen Jiabao`s visit to India in early April to discuss bilateral free-trade agreement issues and first summit meeting between the two countries in 43 years.

With strong market potential, combining 40 percent of the world`s population, the once unfriendly neighbors` cooperative gesture is drawing attention from the world.

With India`s head and China`s body-

NIIT, the largest software education company in India, with the support of the Chinese government, has conducted paid education classes for 25,000 Chinese students in IT education centers in 108 locations nationwide, including Beijing and Shanghai, and has sold around 30 million dollars in software. TCL, a Chinese electronics manufacturing company, is producing various electronic products, including TVs, DVD players and air conditioners in Bangalore, India`s Silicon Valley, using India`s manpower and technology. These examples showcase the combination of India`s “head” and China`s “body.”

Helped by extensive economic cooperation, the bilateral trading volume between India and China quadrupled to 13.6 billion dollars in 2004, up from 3.6 billion dollars in 2001. There were no direct flights between the two countries in 2001, but now there are five weekly direct flights. And India expects China, not EU, to be its largest trading partner in two years.

Commercialism for survival-

Deepening bilateral economic cooperation between the two nations reflects both the international situation and economic growth.

The U.S. and Japan, in a move to offset China`s growing influence, held bilateral security alliance talks in Washington presented by each nation`s diplomatic affairs and national defense ministers, and declared that the peaceful solution of the Taiwan issue is a priority for both nations, sending a clear message to China.

India is a great supporter of China. China officially supported India`s drive to become a permanent member of the United Nations Security Council last year, continuing the warm atmosphere between two nations. "Korea needs to differentiate its economic and political strategies to counter these two nations` efforts to dominate the Asian market," said Lee Ji-pyong, a researcher at the LG Economic Research Institute. "A strategic effort to form a free-trade agreement with Japan, although politically challenging, might be necessary to maintain and expand the nation`s economic initiatives around the globe."