The history of Asia can be interpreted by comparing the economies of India and China. According to World Bank estimates, in inflation-adjusted dollars, India’s GDP in 1980 was 64% of China’s. By 2001, when China joined the World Trade Organization, India’s economy was still only 28% of China’s, the Wall Street Journal quoted Rador as saying.

And despite several years of rapid growth that followed, by 2021 India’s economy had fallen further behind, accounting for only 17% of China’s economy.

Although India has overtaken China in terms of population and has built a world-class cyber industry, it has yet to become a major manufacturer that can compete with China for economic power in Asia and beyond.

Uneven development has influenced world politics throughout modern history more than many realize. The early start of the industrial revolution Britain became both the workshop and the master of the world in the 19th century. And when the rest of Europe caught up with London, Western powers were able to dominate almost the entire world.

Japan’s early industrial successes made it the largest power in Asia by the end of the 19th century, and Imperial Japan was sometimes referred to as the “Great Britain of Asia”. Regional dominance came to the head of the Japanese rulers, and so they embarked on a destructive path to hegemony that eventually led to their defeat.

Now China’s success has made it the largest regional power, and some in Beijing are tempted to follow the path of imperial Japan.

If India’s economy had kept pace with China’s for the past 40 years, the country’s GDP would now be $10 trillion instead of $2.73 trillion. With the military spending that an economy of this size would allow, and the economic and political influence such a GDP would have on Indian businessmen and diplomats, there would no longer be a “China threat” in the Indo-Pacific today.

When and if the gap between India and China begins to narrow, the balance of power in Asia will also begin to shift, and China will have to rethink its regional and global approaches.

America’s problem in Asia is not that China is too rich. The point is that India is too poor. In the short to medium term, the imbalance between the two Asian giants will force the US to work with its allies to contain China’s ambitions and power.

But even as we focus on the clear and immediate danger, we must not lose sight of the bigger picture. The United States and India have been and will be at odds on many fronts, but America’s national interests are closely tied to India’s success.

India’s greatest economic achievement to date is the development of a world-class cyber sector. Cities such as Bangalore and Hyderabad have become major IT hubs, and the rise of the tech sector has also begun to fuel the formation of a middle class.

But the cyber sector alone is not enough to deliver the epochal growth that India needs. If India wants to escape domestic poverty and establish itself on the world stage on a par with China, it must become a manufacturing nation.

The World Bank estimates that India had 360 million children under the age of 14 in 2021, 112 million more than China. IT will provide employment for only a small part of these young people. For hundreds of millions of Indian workers who do not speak English and have poor math skills, factory work is the only viable way out of poverty.

Manufacturing for the global market is not one of India’s strong points. Poor infrastructure, expensive and fluctuating electricity, complex labor and land laws, and frustrating bureaucracy kept India from participating in earlier waves of industrialization in Asia. Japan, South Korea, Taiwan, Singapore, Vietnam and obviously China have all outpaced India in the industrialization race.

Today, however, a combination of external and internal factors is giving India a chance to catch up. At the international level, manufacturers seek to reduce their dependence on China. Domestically, Prime Minister Narendra Modi’s populist government wants more prosperity that the cyber sector cannot provide on its own. Years of investment in highways, railways and ports, as well as legislative reforms, have at least reduced, if not eliminated, the barriers that have long deterred foreign investors.

As Indians seek to make their country more attractive to foreign investment, American policymakers must remember that India’s economic growth is central to American goals in the Indo-Pacific region. As US trade strategy adapts to a new era of superpower competition, we must ensure that products made in India have access to US markets.

Walter Russell Mead, WSJ (Rador Pickup)

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