China is second largest economy. So, ...?

I play bridge online (for free, through BridgeBase) and rarely are even two of the four hands around the table American.  Once, a few days ago, to my right was a player from Greece.  After a few games, he informed the table that he was leaving, to go for a swim.  A fellow player then chimed in that Greece is so beautiful, to which the Greek replied that it was the most beautiful country in the world and that he knows because he has been to 36 countries.

I chuckled away thinking that in Europe it is quite easy to drive a couple of hundred kilometers and be in another country!  Here in the US, driving north from San Diego, it will take about 800 miles to even get to another state within the same country.  (Ahem, that is about 1300 kilometers!  So, having traveled 36 countries doesn't say any damn thing.
 
China is one bloody huge country--it ought to be viewed as a continent.  And it has the population too to be a continent.  After all, China as one single country has a population that exceeds the combined population of all the European countries together.

So, when the world's press announces with great drama that China has overtaken Japan to become the second largest economy in the world, yes, it is commendable that China has progressed a lot.  But, even for a moment did the media pause to consider, for instance, Japan's population is just about a tenth of China's?   

Why is then that China's economy captures our attention so much?

One is a very simple reason--over the years, China's Communist leaders have preferred to use a good chunk of the generated wealth to loan to America.  And now, China is locked into it, and has no choice but to keep this going.  As Larry Summers described it a long time, this is the Mutually Assured Destruction in the post-Cold War era.

The American interest in the Chinese economic story comes, I think, with this in mind.  For Europeans, it is more about environmental impacts, and human rights (or lack thereof) in China.

India is not far behind--as a continent, similar to China.  But is a lot poorer; when Europe was clawing its way out of its Dark Ages, India might have been way more advanced compared to the rest of the world.  "The twin stories of India and China are the most dramatic in the world economy. In 1820, the two countries contributed to nearly half of the world's income. In 1950, their share was less than a tenth"  Now, it is one poor country, where about every third Indian is poor.  The fact that these two continents countries now have some of the highest economic growth rates doesn't surprise me nor worry me.

What does worry me is the uneasy tension that lies under the surface in the relationship between these two countries.  As the Economist points out,

China and India are in many ways rivals, not Asian brothers, and their relationship is by any standard vexed—as recent quarrelling has made abundantly plain. If you then consider that they are, despite their mutual good wishes, old enemies, bad neighbours and nuclear powers, and have two of the world’s biggest armies—with almost 4m troops between them—this may seem troubling.

One scenario that has always been of concern to me is this: so far, the Communist Party has managed to keep a tight hold on the political aspects, while freeing up a lot on the economic front.  But, what if the pressure builds up to an extent that it threatens the very hold of the party?  The contested territory could then become an ideal relief valve for China--hey, nothing holds a country together and legitimizes a government's power like a foreign war!

The basic problem is twofold. In the undefined northern part of the frontier India claims an area the size of Switzerland, occupied by China, for its region of Ladakh. In the eastern part, China claims an Indian-occupied area three times bigger, including most of Arunachal. This 890km stretch of frontier was settled in 1914 by the governments of Britain and Tibet, which was then in effect independent, and named the McMahon Line after its creator, Sir Henry McMahon, foreign secretary of British-ruled India. For China—which was afforded mere observer status at the negotiations preceding the agreement—the McMahon Line represents a dire humiliation.

China also particularly resents being deprived of Tawang, which—though south of the McMahon Line—was occupied by Indian troops only in 1951, shortly after China’s new Communist rulers dispatched troops to Tibet. This district of almost 40,000 people, scattered over 2,000 square kilometres of valley and high mountains, was the birthplace in the 17th century of the sixth Dalai Lama (the incumbent incarnation is the 14th). Tawang is a centre of Tibet’s Buddhist culture, with one of the biggest Tibetan monasteries outside Lhasa. Traditionally, its ethnic Monpa inhabitants offered fealty to Tibet’s rulers—which those aged peasants around Tawang also remember. “The Tibetans came for money and did nothing for us,” said Mr Nansey, referring to the fur-cloaked Tibetan officials who until the late 1940s went from village to village extracting a share of the harvest.

Making matters worse, the McMahon Line was drawn with a fat nib, establishing a ten-kilometre margin for error, and it has never been demarcated. With more confusion in the central sector, bordering India’s northern state of Uttarakhand, there are in all a dozen stretches of frontier where neither side knows where even the disputed border should be. In these “pockets”, as they are called, Indian and Chinese border guards circle each other endlessly while littering the Himalayan hillsides—as dogs mark lampposts—to make their presence known.

I suppose my grandmother said it best when we were kids and when we complained about somebody else getting a larger portion (we perceived it thus).  Grandma always then directed us to simply focus on our own plates and finish what was served.  Similarly, we will be much better off worrying about our own internal problems--which we have in plenty--than to point to China's or India's economic growth rates.