Rise, Fall and Rise of CHINDIA: A peek into History

From the 15th to 18th century, China and India controlled almost half of the global trade. This pattern continued till India became the part of British Empire, in the 19th century and Chinese trade became increasingly controlled by those who controlled the sea routes – England, France and the US. India became the independent and China the communist in the mid – 20th century and both began rebuilding their economies. In the 21st century, China and India became the world’s fastest growing economies and the centre of gravity of global trade appeared to be shifting east. A look at the growth trajectory of the Asian giants over 500 years:

16TH CENTURY

INDIA

CHINA

As Arab traders ship Indian goods to Europe through the Red sea and Mediterranean ports, India’s economy has a 24.5% share of world income. It is the world’s second largest after China. India enjoys a favorable balance of trade – it earns gold and silver from the textiles, sugar, spices, indigo, carpets, etc it sells.

Direct maritime trade between Europe and China began with the Portuguese, who lease an outpost at Macau in 1557. Other Europeans follow. India and China trade each other using overland routes.

17TH CENTURY

INDIA

CHINA

At the turn of century, Mughal India’s annual income (17.5 million) is greater than the British budget. As the Mughal Empire reaches its zenith under Shah Jahan , Indian exports exceeds its import- it is selling many more things and lot of more each. Chinese ship dock At Quilon and Calicut , while in Khambat the volume of trade is so high, more than 3,000 ships visit the port every year.

China continues to control a quarter of world trade. The English establish a trading post at Canton in 1637 .Trade grows further after a Quing emperor relaxes maritime trade restrictions in the 1680’s. By now, Taiwan has come under Quing control. But, the sea trade makes the Chinese apprehensive about conquest.

18TH CENTURY

INDIA

CHINA

Aurangzeb’s India has a 24.4%share of world income, the largest in the world. But as Mughal power declines the East India Company disrupts trade relationship between India’s mercantile community and the wider world.

In 1760, as China’s share of global trade began to fall, the government sets out regulations for foreigners and foreign ships. Canton is the only port open to alien traders, after their war of independence (1776), the Americans began to trade with China. It is a set back for the British.

19TH CENTURY

INDIA

CHINA

In 1820, India’s economy – now completely controlled by east India Company- is 16% of world income. The company promotes the opium trade with China. The Indian agricultural pattern is changed by the company. By 1870, India has 12.2% of world income.

The Quing King refuses to open all the ports to foreign traders and seeks to restrict the opium trade with India. War breaks out twice between Britain and China. A defeated China accepts the opium trade and gives western merchants access to its most developed areas. Tea exports increases 500%in eight years in 1843, totaling 42,000,000 kg in 1855.

20th CENTURY

INDIA

CHINA

IN 1913, India’s economy has a mere 7.6%share of world income. In 1952, seven years after independence, it has just 3.8%, by 1973 its economy has grown to $49.8billion, which is a piffling 3.1%share of world income. In 1991, economic liberalization is initiated by P V Narsimha Rao. By 1998 Indian economy accounts for a 5%share of world income. By 2005, India’s economy is $3,815.6 billion (purchasing power parity) or a 6.3% share of world income.

Before Communist China came into being in 1949, the country mainly produces yarn, coal , crude oil, cotton and food grain. Mao Zedong puts the country on the social path. In 1980 under Den Xiaoping. China changes track and the world first special economic zones and establish in Shenzhen. In 1986Deng’s “open-door” policy encourages foreign direct investment. In 1992, Deng accelerates market reforms to establish a “socialist market economy”. For the first time, China figures in the world’s top 10 economies. In 2002 it joins the WTO.

Hitesh Anand

I am a post graduate from Newcastle University, UK. I like studying and analyzing economic data and financial health of world.

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