Three Economies; Varied Trajectories

As the world pivots on the axis of economic stoutness; China, Pakistan, and India emerge as three nations on starkly different trajectories, each forging its own path in the high-stakes race for global influence. 1940s’ decade marked the emergence of three nations i.e. People’s Republic of China (PRC), Republic of India and Islamic Republic of Pakistan wherein China officially established a government on October 1, 1949 with Pakistan and India attaining independence in August 1947 as a result of British India partition. All three prioritized different agendas since then shaping the course of their actions over time. Today, China stands as world’s largest economy, India ranking 5^th in global GDP rankings and Pakistan ranks 42. What strategies propelled to their current positioning in the global political economy?

What China Currently Offers?

China exhibits one of the world’s oldest civilizations dating back to almost millennia. Successive leaders of China Initiated various programmes to transform China from agrarian to modern society wherein Mao Zedong’s Great Leap Forward (1958) followed by cultural and industrial revolutions, set the foundation for future initiatives. China from all practical lenses has emerged as a role model. It accounts for almost 35% of Global Nominal GDP. China is investing in sustainability, “Made in China” is the manifestation of this initiative.

2024 marks 75th anniversary of PRC and a critical year for the execution of its mega projects for economic development such as textile industries, chemical industries, clean energy ($ 50.7 trillion already invested, contributing almost $1.4 trillion to Chinese economy in 2023), Aerospace and Artificial Intelligence to speed up growth overall and to maintain progress while ensuring sustainability. Import/Exports, New Global Energies inclusion through Belt and Road Initiative (BRI) plus hydropower plants construction and aerospace collaborations are the current areas in focus. Chinese development in Research and Development(R&D) and innovation has surpassed every other state. Therefore, more and more states are joining BRI.

China has currently $3.3 trillion in Foreign Exchange reserves, carried out global trade of $6.8 trillion, exports goods of approximately $10 billion every day to 150 states, 60% of Tesla is manufactured in Chinese plants, 95% of Apple’s iPad and phones are exported from China, has spent $450 billion on R&D and leads in terms of patents, citations and technical designs. Supply chain inclusion, digitization, merit and people-centric approach, production enhancement and skills development has transformed China’s fate. As per latest Harvard Study, Chinese are the relatively more contended and optimistic people on Earth because of their hard work and progress, despite decades of reform era grievances and multiple other pressures, cutting off brain drain. Hence, China from all practical lenses has emerged as a role model.

However, emerging issues such as high debt levels, real estate slump and  shrinking population pose a risk for substantial man power and economic innovation.

India’s Economic Portfolio

Since 1950’s; Indian government introduced a specific economic development strategy i.e. implementing five-year plans for rapid industrialization. Despite having large agricultural land, India opted for industrial growth not considering agriculture as the main stray of the economy believing it to have a limited scope. Industries of heavy goods were chosen to invest in over consumer goods industries to reduce imports as an implementation of Jawarharlal Nehru’s motto i.e. “importing from abroad makes a slave state”. Trade protection and licensing system complemented this strategy. However, this system got declared as “license Raj (economic oppression)” by political economists of that time. It was a moderate success. Although, the industries did yielded results for economic progress yet became political rather than economic over time.

Today, India majorly lacks in its infrastructure reforms coupled with low GDP per capita income. Also, 12.92%  of Indian population lives below poverty line as per 2021 world bank estimates. Although activities such as government subsidies and startups’ i.e. emergence and Venture Capitals’ increasing funding appears to be a promising factor for India’s economic growth, still the country has a long way to go. It is yet to alleviate poverty and raise the standard of living of its people at large.

Pakistan’s Economic Profile Since Inception

Pakistan’s economic model since inception was based on agriculture accounting for almost 53% of the total GDP. East and West Pakistan had major reservoirs of minerals such as coal, oil and natural gas. With a per capital income of $360 in 1950s, economic issues such as lack of infrastructure and absence of industries hampered economic growth to a larger extent. From 1950s, a series of Five-year plans were kicked off with Columbo Plan 1951 initiating technical cooperation among emerging states till 1998. From self-reliance policies of 1950s decade, transition happened to aid-dependent economy.1960s marked the era of economic growth wherein agricultural reforms yielded benefits to economy. In 1970s, West Pakistan separated and next two decades were spent in the revival of economy. Since then, unemployment, low literacy rate, dependence on foreign aid programmes and inability to achieve independence in various sectors of economy hampered economic growth.

Although, the aforementioned issues are to be addressed yet, achieving budget surplus, improving agricultural production by implementing tech savvy practices, creating favorable environment for domestic and foreign investors and above all enabling large youth segment of population (almost 2/3^rd of 241.49 million people) through skill development can play a significant role in promoting economic progress of the state.

Future Outlook

All three states bear a major standing in the international arena in different prospects. Looking at economic environment of the three individually, China leads despite facing challenges, India is yet to achieve its full capacity and Pakistan has to fully use its potential resources in the best manner possible. South Asia holds a pivotal role as a vantage point in world affairs. The subtle relations of the states across political, economic and social domain define their relative emergence in the ever-changing global order. If China, India and Pakistan could collaborate in economic realm, it exhibits the potential to transform the fate of entire region as factors such as multilateral trade, multifaceted infrastructure projects, market access and natural resource management initiatives can yield larger benefits for the regional players altogether.