Professor James Dean

The Elephant and the Dragon: Who will be Asia’s Economic Superpower in the 21st Century

by Professor James Dean, Professor of Economics and International Finance, Department of Economics, Simon Fraser University, Burnaby, Canada

For 25 years, China has grown faster than any major country in the world. But last year, India’s growth rate caught up to China’s, and last year India’s stock market did much better than China’s.

China is the world’s last big communist country. India is the world’s biggest democracy. This lecture argues that China’s enduring communism has sown seeds of economic malaise, notably prolonged life-support for loss-making state owned enterprises, engineered via massive loans from a banking system that is now technically bankrupt. Politically directed economics has also led to dramatic over-investment in uneconomic real estate and other mega-projects.

By contrast, India’s democracy has matured, and its government has now embraced economic liberalization. Moreover India enjoys the legacy of the English language, which means that it can take advantage of international economic opportunities – such as service-sector “outsourcing” – much more readily than can China. And although both countries suffer from enormous chasms between rich and poor, India’s democracy serves as a safety valve, whereas China has recently experienced sporadic unrest that could explode into violence.

James W. Dean is Professor of International Economics at Simon Fraser University, Canada and Ross Distinguished Professor of Canada-US Business and Economic Relations at Western Washington University, USA. He holds MA and PhD degrees in Economics from HarvardUniversity and specializes in international macroeconomics and finance, as well as developing and transition economies. He has published about 150 scholarly works, including Has the Market Solved the Sovereign Debt Crisis? (Princeton Studies in International Finance, 1997) and The Dollarization Debate (OxfordUniversity Press, 2003). Recently he has turned his attention to the Chinese transition process and to comparative studies of India and China. Professor Dean lectures world-wide, has held 25 visiting appointments in research institutes, major universities and business schools in Africa, Asia, Australia, Western and Eastern Europe and the US, and has consulted for numerous international organizations including the World Bank and the Asian Development Bank.

Arranged by Asia Research Centre, CBS