From the 15th to 18th century, China and India controlled almost half of global trade. This pattern continued till India became a part of the British empire, in the 19th century and Chinese trade became increasingly controlled by those who controlled the sea routes – England, France and the US. India became independent and China turned to communism in the mid-20th century and both began to rebuild their economies. In the 21st century, China and India became the world’s fastest growing economies and the centre of gravity of global trade appeared to shifting east. A look at the growth trajectory of the Asian giants over the last 5 decades:
As Arab traders ship Indian goods to Europe through the Red Sea and Mediterranean ports, India’s economy has a 24.5% share of world income. It is the world’s second largest after China. India enjoys a favorable balance of trade – it earns gold and silver from the textiles, sugar, spices, indigo, carpets, etc it sells
Direct maritime trade between Europe and China begins with the Portugese, who lease an outpost at Macau in 1557. Other Europeans follow. India and China trade with each other using overland routes.
At the turn of the century, Mughal India’s annual income (17.5 million pounds) is more than the British budget. As the Mughal Empire reaches its zenith under Shah Jahan, Indian exports exceeds its imports – it is selling many more things and lots ore of each. Chinese ships dock at Quilon and Calicut, while in Khambat the volume of trade is so high, more than 3000 ships visit the port every year.
China continues to control a quarter of world trade. The English establish a trading post at Canton in 1637. Trade grows further after the Qing emperor relazes maritime trade restrictions in the 1680’s. By now, Taiwan has come under Qing control. But the sea trade makes the Chinese apprehensive about the conquest.
Aurangzeb’s India has a 24.4 % share of world income, the largest in the world. But as Mughal power declines, the East India Company disrupts trade relations between India’s mercantile community and the wider world.
In 1760, as China’s share of global trade begins to fall, the govt sets out regulations for foreigners and foreign ships. Canton is the only port open to alien traders. After their War of Independence (1776), the Americans begin to trade with China. It is a setback for the British.
In the 1820, India’s economy – now controlled by the East India Company – is 16% of world income. The Company promotes the opium trade with China. The Indian agricultural pattern is changed by the Company. By 1870, India has a 12.2% share of a world income.
The Qing King refuses to open all ports to foreign traders and seeks to restrict the opium trade with India. War breaks out twice between Britain and China. A defeated China accepts the opium trade and gives Western merchants access to its most developed area. Tea exports increase 500% in eight years from 1843, totalling42, 000, 000 kg in 1855.
In 1913, India’s economy has a mere 7.6% share of world income. In 1952, seven years after Independence, it has just 3.8%. By 1973, its economy has grown to $494.8 billion, which is a piffling 3.1% share of world income. In 1991, economic liberalization is intiated by P.V. Narasimha Rao. By 1998, Indian economy accounts for a 5% share of world income. By 2005, India’s economy accounts for 6.3% of world income.
Before Communist China came into being in 1949, the country mainly produces yarn, coal, crude oil, cotton and foodgrain. Mao Zedong puts the country on a socialist path. In 1980, under Deng Xiaoping, China changes track and the first SEZ is established in Shenzhen. In 1986, Deng’s “open-door” policy encourages foreign direct investment. In 1992, Deng accelerates market reforms to establish a “social market economy”. For the first time, China figures in the world’s top10 economies. In 2001, it joins the WTO.
This is an article from Times of India.