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HOW HE SEES IT China, India emerging as world powers



Published: Fri, January 21, 2005 @ 12:00 a.m.



By DANIEL SNEIDER

KNIGHT RIDDER NEWSPAPERS

Last week the National Intelligence Council, the CIA's think tank, released a 119-page report pondering the world the United States might face in 2020. In a reflection of the myopia of our times, the Washington Post's front-page story focused almost entirely on the CIA's prediction that Islamic terrorism would still be with us 15 years from now.

Left for bare mention was the far more stunning vision that was the main focus of the intelligence report. By 2020, the document forecasts, the United States will have to share global domination with the rising Asian powers of China and India.

"The likely emergence of China and India, as well as others, as new major global players -- similar to the advent of a united Germany in the 19th century and a powerful United States in the early 20th century -- will transform the geopolitical landscape," the CIA report concludes.

If the 1900s were the American Century, the authors say, "the 21st century may be seen as the time when Asia, led by China and India, comes into its own."

This is not news for those who live in California's Silicon Valley. But the rest of the country is still catching up to this reality. The report, "Mapping the Global Future," reflects not only the views of the intelligence community but also academics, business people, government officials and other experts around the world. The map is worth studying.

Asia's rise starts with economics. By 2020, China's economy will exceed all others except the United States in size. India will likely have overtaken Europe. Other would-be powers such as Brazil and perhaps Russia may follow in their wake.

Demographic breakdown

Europe and Japan face a huge demographic breakdown, with aging populations and shrinking work forces. They must allow large immigration from the south or face economic stagnation.

Globalization, the growing cross-border flows of information, technology, capital and people, is the "mega-trend" shaping everything else. Those countries best able to access and adapt new technologies will benefit most from this trend.

While the United States currently sets technology standards for the rest of the world, "there are signs this leadership is at risk." The report details the decline of science and engineering graduates here and the shrinking of privately funded research and development.

"Asia looks set to displace Western countries as the focus for international economic dynamism," the CIA forecasts.

Asia's multinational corporations -- from Sony and Samsung to China's Huawei -- will drive global integration. The trend of outsourcing jobs to Asia will only accelerate, expanding to more occupations. "The transition will not be painless and will hit the middle classes of the developed world in particular," an alarming idea for those who have already felt this impact.

Rival financial system

The "Asian face" on globalization may create a rival financial system, one less dependent on the dollar. The currency reserves of Japan, China, Korea and India, now three quarters of global reserves, will change the way business is done. And economic and cultural ties across Asia will grow, at the expense of Europe and America.

"By 2020," the CIA predicts, "globalization could be equated in the popular mind with a rising Asia, replacing its current association with Americanization."

This Asian century does not only have an economic and technological dimension. China is set to overtake Russia as the second largest defense spender after the United States. In the next two decades, China will emerge as a "first-rate military power."

"The key question that the United States needs to ask itself is whether it can offer Asian states an appealing vision of regional security and order that will rival and perhaps exceed that offered by China," the CIA concludes.

It is a sobering vision of not only the world ahead but the world we are living in right now. Read it.

X Daniel Sneider is foreign affairs columnist for the San Jose Mercury News. Distributed by Knight Ridder/Tribune Information Services.




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