Academics predict the possible rise of potential superpowers in the 21st century, mentioning several candidates. Whether the People's Republic of China,^[1] India^[2] or the European Union,^[3] will be future superpowers is a matter of ongoing debate. The most common belief held is that only the United States of America currently fulfills the criteria to be considered a superpower, although it is a matter of debate if it is currently a hegemon^{[4] [5][6]} Another topic of debate is regarding the status of the Russian Federation as either a superpower or a potential superpower.^{[7][8][9][10]} Brazil,^[11] is expected to emerge as a future great power.^[12]

The record of such predictions has not been accurate. For example, in the 1980s some political and economic analysts falsely predicted that Japan would eventually accede to superpower status, due to its large GDP and high economic growth at that time.^[13]

European Union

European Union

The European Union has been called an emerging superpower by academics.^{[14][15][16][17]} T.R. Reid,^[18] Andrew Reding^[19] and Mark Leonard,^[20][21] believe that the power of the European Union will rival that of the United States in the 21st century. Leonard cites several factors: the EU's large population, large economy, low inflation rates, the unpopularity and perceived failure of US foreign policy in recent years, and certain EU members states' high quality of life (when measured in terms such as hours worked per week).^[22] On the other hand Laurent Cohen-Tanugi^[23] states that the EU as a whole has consistently suffered from a growth deficit vis-a-vis the US, high unemployment, and public deficits even while most member states of the EU lagged substantially behind the US in R&D investment, technological innovation, and, since 1995, productivity gains.

The EU currently features the world's largest GDP and consumer market and has considerable control over the global allocation of resources, yet it is currently argued that the European Union is too politically and culturally fragmented to be considered as a single unit, especially since two of the principal levers of power, foreign policy and defense, are exercised principally by the individual member states.^{[citation needed]} Additionally, the EU's military capabilities are relatively limited, while "superpowers" traditionally wield considerable power in that sphere.

Overall the twenty-seven member states also have significant cultural influences on the entire globe, with European fashion, art and food being commonplace in nearly every corner of the planet. France and the United Kingdom are also permanent members of the UN Security Council and have veto power. In terms of education, eight of the top fifteen ranks on the PISA were filled by EU member states with all western member states being represented among the top thirty.^[26]

Given planned force expansion, EU members will together field 4 fleet aircraft carriers as well as more than half a dozen smaller escort carriers and numerous surface warships by 2015.^{[citation needed]}

The EU is composed of many developed countries; by contrast, India and China are politically unified but still lack some economic, political, military, and social development. The European Union contains several current great powers — the United Kingdom, Germany, France, and Italy — along with 23 other countries.

Also, the EU even seems to have developed a sphere of influence of close geographical nations, which was typical of the United States and Soviet Union in the Cold War.^[27] Examples include candidate nations, EFTA members outside of the Union, and former colonies, especially in Africa. The EU plays the role of a normative hegemon [7]. It reverses the traditional balance of power, in the sense that states are not trying to counter-balance it but join it. It is argued by commentators that full political integration is not required for the European Union to wield international influence: that its apparent weaknesses constitute its real strengths (as of its low profile diplomacy and the opsetion of the rule of law^[28]) and that the EU represents a new and potentially more successful type of international actor than traditional ones [8]; however, it is uncertain if the effectiveness of such an influence would be equal to that of a politically integrated superpower. (e.g. United States)

Much of the debate seems to stem from the EU being a sui generis entity.

Structure

On December 16, 2004, The World Factbook, a publication of the United States' Central Intelligence Agency (CIA) added an entry for the European Union.^[29] According to the CIA, the European Union was added because the EU "continues to accrue more nation-like characteristics for itself". Their reasoning was explained in this small statement in the introduction:

The evolution of the European Union (EU) from a regional economic agreement among six neighboring states in 1951 to today's supranational organization of 27 countries across the European continent stands as an unprecedented phenomenon in the annals of history. Dynastic unions for territorial consolidation were long the norm in Europe... Although the EU is not a federation in the strict sense, it is far more than a free-trade association such as ASEAN, NAFTA, or Mercosur, and it has many of the attributes associated with independent nations: its own flag, anthem, founding date, and currency, as well as an incipient common foreign and security policy in its dealings with other nations. In the future, many of these nation-like characteristics are likely to be expanded. Thus, inclusion of basic intelligence on the EU has been deemed appropriate as a new, separate entity in The World Factbook. However... this description is placed after the regular country entries. — CIA factbook^[29]

India

Republic of India

Newsweek, and the International Herald Tribune join several academics in discussing India's potential of becoming a superpower.^[30][31][32] With 9.4% GDP growth in 2007^[33], Goldman Sachs predicts that as 700 million Indians are expected to move to cities by 2050, the Indian economy may surpass the United States's (in US$) by 2043.^[34]

"India has moved onto a much faster growth trajectory than the bank had previously expected, fueled by strong and steady productivity gains in its legions of new factories, which are producing everything from brassieres to cars." ^[34]

India's strength lies in its demographics; More than 50% of India's population is under 25.^[34] Dr Narendra Jadhav, a principal advisor to the RBI and a former advisor to the executive director at the IMF, says "India has a great potential to become an economic super power because of its growing young population."^[35] A young population coupled with the second largest English-speaking population in the world could give India an advantage over China.^[36]

Founder and President of the Economic Strategy Institute and former counselor to the Secretary of Commerce in the Reagan Administration Clyde V. Prestowitz Jr. has embraced the notion being put forth that

"It is going to be India's century. India is going to be the biggest economy in the world. It is going to be the biggest superpower of the 21st century".^[37]

China and India rising to superpower status is not inevitable, according to scholars such as Professor Pranab Bardhan, Chief Editor of the Journal of Development Economics, who suggest that millions mired in poverty and ineffective government prevent China or India from rivaling the U.S. or the E.U. any time soon.^[38]

Facts in favour

Geography

India, the 7th largest nation by area, lies at the north-central region of Indian Ocean - a zone with unprecedented potential for growth in the scale of transoceanic commerce, with many Eurasian and increasingly Afro-Asian sea-trade routes passing through or close to Indian territorial waters. The subcontinent's land and water resources, though strained, is yet sustaining its massive population.

According to Lord Curzon of the British Empire:

The central position of India, its magnificent resources, its teeming multitude of men, its great trading harbors, its reserve of military strength, supplying an army always in a high state of efficiency and capable of being hurled at a moment's notice upon any point either of Asia or Africa--all these are assets of precious value. On the West, India must exercise a predominant influence over the destinies of Persia and Afghanistan; on the north, it can veto any rival in Tibet; on the north-east . . . it can exert great pressure upon China, and it is one of the guardians of the autonomous existence of Siam. Possession of India gave the British Empire its global reach.^[39]

In the future, the world is expected to enter from the "fossil fuel age", and perhaps "nuclear energy age", into the "renewable-energy age" or even further into the "fusion power age", if and whenever these technologies become economically sustainable. ^[40][41][42] Being a region in the sunny tropical belt, the Indian Subcontinent could greatly benefit from a renewable energy trend, as it has the ideal combination of both - high solar insolation^[43] and a big consumer base density.^[44][45][46] For example, considering the costs of energy consumed for temperature control (a major factor influencing a regions energy intensity) and the fact that - cooling load requirements, unlike heating, are roughly in phase with the sun's intensity, cooling from the excessive solar radiation could make great energetic (and hence economic) sense in the subcontinent, whenever the required technology becomes competitively cheaper.^{[47] [48] [49]} India also has 25% of the world's thorium resources.

Demographics

India has the world's second largest population.^[50] The government has attempted to control the population so as to avoid overpopulation. Some South Indian states have slowed down their population growth to below 1%.^[51] The PGR for the country is 1.38. Due to its high birth rate India has a young population compared to most aging nations. It has approximately 60% of its population below the age of 30. In addition, declining fertility is beginning to reduce the youth dependency rate which may produce a demographic dividend.^{[52] [53] [54]} In the coming decades, while some of the powerful nations witness a decrease in workforce, India is expected to have an increase. For example while Europe is well past its demographic window, the U.S. entered its in 1970 (lasting until 2015), China entered its in 1990 (will last until 2025), India won't enter its window until 2010 (lasting until 2050).^[55] Regionally South Asia is supposed to maintain the youngest demographic profile after Africa and Middle East, with the window extending up to 2070s. ^[56] More than 35 million Indians live across the globe.^[57] Under fair opportunities, they have become socio-economically successful.^[58]

The importance of English in the 21st century is a topic of debate,^[59][60][61] nonetheless the growing pool of non-native English speakers makes it the best contender for "Global language" status.^[62][63] Incidentally, India has the world's largest English speaking/understanding population.^[64] It claims one of the largest workforce of engineers, doctors and other key professionals, all comfortable with English.^[65] It has the 2nd largest population of "fluent English" speakers, second only to the U.S., with estimates ranging from 150 to 250 million, and is expected to have the largest in coming decades.

Politics

India is the world's largest democratic republic, more than three times bigger than the next largest (U.S.). It has so far been successful, at least politically, especially considering its functionality in difficult ethnic composition.^[66][67] The fact that India is a democracy has improved its relations with other democratic nations and significantly improved its ties with the majority of the nations in the developed world. ^[68] India has been pressing for permanent membership of the United Nations Security Council (as part of the G4 nations^[69]) but without veto ability.^[70] It has received backing from the UK,^[71] France^[72] and Russia^[73]. However, China^[74] and the U.S^[75] have not been supportive of the bid. With improved Indo-US relations, the US is expected by some to reconsider its stand.^[76]

Foreign relations

India has developed relationships with the world powers like the EU,^[77] the U.S.,^[78] Japan and Russia. It also developed relationships with the African Union (esp. South Africa), the Arab World, Southeast Asia, Israel and South American nations (esp. Brazil). In order to make the environment propitious for economic growth, India is investing on its relations with China.^[79] It has significantly boosted its image among western nations and signed a civilian nuclear deal with the United States in March 2006. It is also working for better relationships with Pakistan and Iran.^[80] Historically, India was one of the founding members of Non-Aligned Movement, and had good relationships with Soviet Union and other parts of western world. It played regional roles in South Asian affairs, e.g. its use of the Indian Peace Keeping Force in the Bangladesh Liberation War and in Sri Lanka. It took a leading initiative to improve relations between African and Asian countries. India is an active member of the Commonwealth and the WTO. The evolving economic integration politics in the West and in Asia is influencing the Indian mood to slowly swing in favour of integration with global economy.^[81] Currently, India's political moves are being influenced by economic imperatives. New Delhi is also being observed to slowly, cautiously, and often hesitantly, step into the unchartered role of becoming one of the two major seats of political power in Asia,^[82] the other being at Beijing. Some enlightened thinkers from the subcontinent have also envisioned, over the long run, of a South Asian version of free trade zone and even a Union, where the South Asian nations relinquish all past animosities and move to make economic growth a pan subcontinental phenomenon. ^{[83] [84]}

A new and highly controversial geopolitical strategy, being debated in the West, is whether India should be trusted/helped to become an economically strong democratic citizen of the world and be used to balance the powerful but non-democratic forces, to insure a more stable world.^[85] Generally speaking it is discussed in the context of adopting a policy of offshore balancing on the part of the United States. A new American strategy towards India has been indicated in George W. Bush's recent visit to the subcontinent.^[86] India's current economic growth (as the world's second-fastest growing major economy) has improved its standing on the world's political stage, even though it is still a developing country, but one that is showing strong development. Many nations are moving to forge better relationships with India.^[87][88]

Economy

The economy of India is currently the world's fourth largest in terms of real GDP (PPP) after the USA, the People's Republic of China and Japan, and the second fastest growing major economy in the world, averaging at an annual growth rate of above 8%.^{[90] [91][92]}. Its record growth was in the third quarter of 2003, when it grew higher than any other emerging economy at 10.4% ^{[93] [94]}. Interestingly, estimates by the IMF shows that by 2007 (see List of countries by future GDP estimates (PPP)), India will be the third largest economy in the world, overtaking the Japanese economy. The current growth rate is at 9.2%^[95]. India, growing at 8% per year, is the world's second largest producer of food next to China. Food processing accounts for USD 69.4 billion as gross income.^[96] India is still relatively a small player in manufacturing when compared to many world leaders. Some new trends suggest an improvement in future, since the manufacturing sector is growing at 11-12%.^{[97][98][99][100][101][102]} India currently has an expanding IT industry which is considered one of the best in the world. Some have begun to describe India as a technology superpower. ^[103][104] It is considered the World's Office and is leading in the Services Industry. This is mainly due to the availability of a large pool of highly skilled, low cost, English speaking workforce.^{[105] [106]}

India is trying to develop more high skilled, English speaking people to fit in the future knowledge economy. ^{[107] [108]} India is becoming one of the world's leading producers of computer software and with mushrooming R&D centres it is experiencing a steady revolution in science and technology.^{[109] [110] [111]} A typical example of India's rising scientific endeavours is that it was the 3rd nation to found a National Space Agency called ISRO, after the USSR and the U.S. It was the third Asian nation to send satellites into space after China and Japan in 1970, starting with Aryabhata in 1975.^{[112] [113]} In January 2007, India became the fourth nation to complete atmospheric reentry^[114] By 2008 it plans to send an unmanned mission to the Moon. ^{[115] [116] [117]}. India and the United States have increased mutual cooperation in space-travel related technologies, such as increasing the interoperability between Indian and US systems, and prospects for a commercial space launch agreement with India that would allow US satellites to be launched on Indian vehicles^[118].India is among the world leaders in remote sensing,^[119] a technology coming to great use, among others, to Indian fishermen & farmers.^[120] India is also trying to join international R&D projects - e.g. it has recently joined the European Galileo GPS Project^[121] and the ITER for fusion energy club.^[122] Some Indian educational and research institutions like IIT,^[123] NIT, IIM, IISc, TIFR and AIIMS are among the world's best.

To reduce the energy crisis, India is presently constructing ~ 9 civilian nuclear power reactors and several hydro-power stations. Recently on 25/01/2007, Russian president, Vladimir Putin on a visit to India offered to build 4 more reactors and India is expected to clinch this deal of strategical importance.^[124] Recently it also made a civilian nuclear energy deal with the US^[125] and EU.^[126] In recent years, India joined China to launch a vigorous campaign to acquire oil fields around the world and now has stake in several oil fields (in the Middle East and Russia).^{[127] [128] [129] [130]}

India is in the process of developing modern mass rapid transit systems to replace its existing system which is seen as inadequate to cater to present and future urban requirements. A modern metro rail system is already in place in the cities of Delhi, Mumbai, Chennai and Kolkata. Work is in progress or would be commencing shortly for developing similar mass transit system in cities of NOIDA, Hyderabad, Bangalore, Indore, Ahmedabad and Kochi.^[131] Indore is leading the track by implementing world class GPS enabled, low floor buses in a Rapid Transport System. With growth in economy and technology, India is welcoming modernisation. The Indian rail network traverses the length and breadth of the country, covering a total length of 63,140 km (39,200 miles). It is one of the largest and busiest rail networks in the world, transporting over 5 billion passengers and over 350 million tonnes of freight annually.^[132] Its operations covers twenty-seven states and three Union territories and also links the neighbouring countries of Nepal, Bangladesh and Pakistan. However, other public transport systems, such as buses are often not up to the standards followed in developed countries.^[133]

Culture

India, with its diverse and fascinating history, arts, music, culture, spiritual & social models has witnessed the growth of a booming tourism industry.^[134] India is a historic place with a diverse history of over five millennia. About 3.9 million tourists travelled to India in 2005, each spending approximately $1,470 per person, higher than that of France (the leading tourist destination in the world).^[134] Foreign visitors in 2005 spent more than US $15.4 billion annually in India ^{[135] [136] [137]}. Many travellers find the cultural diversity an enriching experience, despite the hassles inefficiency, pollution and overcrowding. ^[138][139] Monuments like the Taj Mahal are among the many attractions of this land.^{[140] [141]} As of 2006, Conde Nast Traveller ranked India the 4th most preferred travel destination.^[134] The Planning Commission expects 5.8 million tourists travelling to India by 2010. The World Travel and Tourism Council believes India's tourism industry will grow at 10% per annum in the next decade, making it lead the world in terms of growth.^[134] Tourism contributes 6% of India's GDP and employed 40 million people, making it an important factor in India's economic growth.^[134]

"First World medical services at Third World prices" - Indian Metros have emerged as the leading destination of medical tourism. Last year, an estimated 150,000 foreigners visited India for medical procedures, and the number is increasing at the rate of about 15 percent a year.^[142]

India is one of two ancient civilizations, dating back to at least 5000 years, which have stood the test of time and survived against all odds. Indians invented the numbering system (introduced into the West by Arabic mathematicians, Arabic numerals), the concept of zero, basic algebra, etc.^{[143] [144][145]} India has a long history of cultural intercourse with many regions of the world, especially within Asia, where its cultural influence has spread through the philosophy of religions like Buddhism, Hinduism, Sikhism, etc - particularly in East and Southeast Asia. Many religions with origins outside the Indian continent - Islam, Christianity, Judaism, Zoroastrianism, Bahá'í Faith - have found followers in India. Indian culture has spread to foreign lands through wandering traders, philosophers, migration and less through conquest.

The Maurya, Gupta, Mughal, Vijayanagara and Chola empires provide the necessary confidence that a powerful state can be established despite having diversity. India's film industry produces more feature films than any other. ^[146] In a year, it sold 3.6 billion tickets, more than any other film industry in the world (In comparison, Hollywood sold 2.6 billion tickets) ^[147]. The cinemas play a major role in spreading Indian culture worldwide. Indian cinema trancended its boundaries from the days of film Awara, a great hit in Russia. Bollywood films are seen in central and west Asia.^{[148] [149] [150] [151]} Indian films have also found audience in eastern societies.^[152] India's film industry is now becoming increasingly popular in Western society, with Bollywood festivals occurring numerous cities^[153][154] and Bollywood dance groups performing in New Years Eve celebrations, treatment which other non-English film industries generally do not receive.^[155]

Military

The Indian Armed Forces, India's main defence organisation, consists of two main branches: the core Military of India and the Indian Paramilitary Forces. The Military of India maintains the third largest active duty force in the world after the People's Republic of China and the United States^[156], while the Indian Paramilitary Forces, over a million strong, is the second largest paramilitary force in the world. Combined, the total armed forces of India are 2,414,700 strong, the world's third largest defence force.^[157] The Army of India, as the Indian army was called under British rule before 1947, played a crucial role in checking the advance of Imperial Japan into South Asia during World War II. It also played a leading role in the liberation of Bangladesh in 1971. Today, the Indian Army is the world's second largest army after China's People's Liberation Army. The Indian Air Force is the fourth largest air force in the world ^[158][159]. India recently flew its first indigenously manufactured combat aircraft.

The Indian Navy is the world's fifth largest navy ^[160]. It is considered to have blue-water capabilities with sophisticated missile-capable warships, aircraft carrier, minesweepers, advanced submarines and the latest aircraft in its inventory, along with a significant use of state of the art technology that is indigenously manufactured. ^[161] It operates one of only two Asian aircraft carriers. It also plans to induct the INS Vikramaditya by 2008. The first successful use of missiles in history against a modern army, was by Indians against the British Army in the Mysore wars.^[162] India started the IGMDP to be a self reliant nation in missile development. The IGMDP program includes five missiles ^[163] - the ballistic missiles like the Prithvi and Agni, surface to air missiles Trishul and Akash and also the anti tank Nag missile. Prithvi and Agni missiles are inducted into the armed forces and form the basis of Indian nuclear second strike capability. Trishul missile is declared a technology demonstrator. The Akash and Nag missiles are undergoing user trials. Recently, a new weapons system, the air-to-air Astra missile was added into the project. Astra is a BVR capable missile. The expertise in developing these missiles has helped Indian scientists to contribute to joint weapon development programs like the Brahmos and Barak-II. There are reports of India developing an Intercontinental ballistic missile named Surya (Sun). This missile is said to have a range of twelve thousand kilometers.^[164] India possesses nuclear weapons since 1974, when it did the Pokharan I nuclear tests, and the means to deliver them over long distances. However, India is not a signatory to the Nuclear Non-Proliferation Treaty (on grounds of security concerns and that India condemns the NPT as discriminatory).^{[165] [166]}

India is currently one of the world's largest arms importers, spending an estimated US$16.97 billion in 2004. India has made military technology deals with the Russian Federation, the U.S., Israel and the EU. ^[167] The Indian Armed Forces plays a crucial role in anti-terrorist activities and maintaining law and order in the disputed Kashmir region. India has also participated in several United Nations peace-keeping missions, currently being the largest contributor to UN peace keeping force and is the largest contributor to the United Nations Democratic Fund, to which the USA, the world's only current superpower, contributes nothing.^[168]

Facts against

Democratic republicanism has its value,^[169] more so in a multi-ethnic country like India ^[170]. However, the applicability of the "theoretical" virtues of republicanism on a country like India is sometimes questioned.^{[171] [172] [173]} Some thinkers consider India's diverse democracy to levy a huge tax on its economy.^[174] The Indian government has to consider many interest groups before decision making. However, it should be noted that India is relatively a much younger republic when compared to other major democracies. Moreover, it is predicted that in the long run, India being a democracy will provide it an edge over non-democratic competitors like China.^[175] India has had significant successes with quelling many insurgencies, most prominently the Sikh terrorism (Khalistan) and the surrender of large sections of insurgent outfits like the United Liberation Front of Asom in 1992 and National Liberation Front of Tripura in 2000-2001. However the Indian government has acknowledged that there has been a dramatic increase in support for the Maoists (Naxalite) insurgency in the last decade.^[176] Maoist rebels have increased their influence over the last 10 years, especially in regions near Nepal, particularly by targeting and gaining support from poor villages in India. The boom in support appears to have been also boosted by the successes of the nearly 10-year-old Maoist rebellion in Nepal. India's government has recently taken a new stance on the Maoist insurgency, pulling the affected states together to coordinate their response. It says it will combine improved policing with socio-economic measures to defuse grievances that fuel the Maoist cause^[177].

India's growth is impeded by disputes with its neighboring People's Republic of China and Pakistan (over historical border and ideological issues) and disputes with Bangladesh (over water availability and the Farakka Dam). Hence, India's neighbors such as China and Pakistan remain distrustful towards India. It is also occasionally burdened with instability issues within some localised-regions of the subcontinent. In an effort to reduce political tension and increase economic cooperation, in recent years, India has improved its relations with its neighbors ^[178]. India is not a member of the UNSC, although currently it is one of the four-nations group actively seeking a permanent seat in the council. Thus India lacks the ability to extend its influence or ideas on international events in the way superpowers do. ^[179] As of 2005, approximately 22-26% of India's population lived below poverty line.^{[180] [181] [182]} Poverty also begets child labour. ^[183] Various reforms, including mass employment schemes have been undertaken by the government to tackle this problem, ^{[184] [185]} and India has been quite successful in reducing its share of poverty. The number of people living on $1 a day is expected to fall in South Asia from 41.5 per cent in 1990 to 16.4 per cent until 2015. ^[186] However, the issue of poverty in India is not fully resolved. There is consensus among economists that overall poverty in India has declined, the extent of poverty reduction is often debated ^[187]. The economic reforms of the early 1990s were followed by rates of high economic growth. Its effect on poverty remain controversial, and the official numbers published by the Government of India, showing a reduction of poverty from 36% (1993–94) to 26% (1999 – 00), to 22% (2004 - 05), have been challenged both for allegedly showing too little and too much poverty reduction^[188]. While there is a consensus on the fact that liberalization has led to a reduction of income poverty, the picture is not so clear if one considers other non-pecuniary dimensions (such as health, education, crime and access to infrastructure). With the rapid economic growth that India is experiencing, it is likely that a significant fraction of the rural population will continue to migrate toward cities, making the issue of urban poverty more significant in the long run ^[189]. Economist Pravin Visaria has defended the validity of many of the statistics that demonstrated the reduction in overall poverty in India. He insisted that the 1999-2000 survey was well designed and supervised, and he further defended that just because the numbers did not appear to fit preconceived notions about poverty in India, they should not be dismissed outright^[190]. Nicholas Stern, vice president of the World Bank, has published defenses of the poverty reduction statistics. He argues that increasing globalization and investment opportunities have contributed significantly to the reduction of poverty in the country. India, has shown one of the clearest co-relation trends of globalization with the accelerated rise in per-capita income. ^{[191] [192]}

The social infrastructure in India ^[193] such as roads, power grid, water, communications infrastructure, housing and education are often below standards, and not catching up with the tune of its economic progress. ^[194] Continued poor infrastructure might serve as a bottleneck to further economic development. The government is, however, improving the infrastructure, such as expanding the freeway and highway system and bringing it up to global standards. As of 2005, India only had 4,885 km of central-divided expressways^[195], while the U.S. and China have 90,000 km and 41,000 km of expressways, respectively. ^[196] India's continual economic prosperity is also hindered by bad governance and ubiquitous red tape^[197] (‘Bureaucratic Raj'^[198]). Retrogressive government regulations affect many areas. For example, in some states, black outs and power rationing are common due to underinvestment, differing state and local regulations, etc.

Despite India's growth spurt of 8% p.a. in recent years, its sustainable pace is still much lower than China's, which puts its economy more at risk of overheating and rising inflation.^[199] The Reserve Bank of India (RBI) has acknowledged the risk of overheating and has been tightening monetary policy steadily. It is debatable whether this alone will be sufficient to ease inflationary pressures. The economy is running near or above capacity, and the RBI has noted that production must rise at a pace sufficient to match overall GDP growth if further inflationary pressures are to be avoided. The Indian government has said that much of the rise in inflation recently can be attributed to short-term supply constraints, such as a shortage of key foodstuffs thanks to an erratic summer monsoon. ^[200]

India heavily depends on foreign oil and oil imports will increase until non-fossil or renewable energy technology becomes economically viable in the country.^[201] To avert an energy crisis, India is desperately seeking alternate means of energy. India can sustain its growth to higher trajectories only by the co-operation of other countries. As for now, India is energetically expensive since India has to import over 70% of its energy,^[202] thus making costs of comforts - like personal car or even air conditioning - extremely high. It is however, steadily combating its energy issues. Unless India finds a quick way to generate jobs, its population of unemployed youths could be a reason of unstability.^[203] India's growth in the services sector and Information Technology sector has not been matched by growth in manufacturing which can provide more jobs.^[204] Some claim that this sector may lose importance in the future. ^[205] India is leveraging on new sectors like the KPO (Knowledge Process Outsourcing)^{[206] [207]}.

India's health scenario is dismal with diseases and malnutrition constantly affecting the poorest quarter of the populace.^{[208] [209] [210]} Mortality is still relatively high and the bane of AIDS is spreading quickly.^[211] According to a report of United Nations Development Program, India has the third highest population living with AIDS/HIV^[212] and its economy might suffer a setback if it does not check the problem of the virus' spread. To improve the situation, a number of projects such as the building of hospital chains (like the Apollo Hospitals, amongst others) has laid the foundation for a health system that matches global standards. The program has had positive impact.^[213][214] The number of AIDS patients in India declined from 5.7 million in 2002 to 2.5 million in 2007.^[215] India's AIDS prevalence percentage now stands below that of several developed economies including Portugal, Spain and the United States.

As per the 2001 India census, India's national literacy is only 65.2 percent.^{[216] [217]} Literacy drive is spreading slowly to other states.^[218] India's youth (age 15 to 24) literacy rate was 76.4% between 2000 and 2004.^[219] At current rates India will take no less than 20 years for a literacy of 95%.^[220]. Literacy in India is not homogeneous, some states in India have more impressive literacy rates than others. Kerala, a south-indian state widely recognized as the most well-educated state in India, recorded an impressive 90.92% literacy rate in 2001. ^[221] On the other hand the north-indian state of Bihar lags behind with 47.53%.^[222] India's adult literacy rates (61.3% in 2002), is just a little better compared to other nations in South Asia except Sri Lanka's 92%, ^[223] with Nepal next at 44%, Pakistan at 41.5% and Bangladesh the lowest at 41.1%.

The majority of India lies in the tropical climate zone, which may have a negative impact on its agricultural and overall economic development. The climate thesis of economic development was first argued by Adam Smith and recently by David Landes in his The Wealth and Poverty of Nations. Tropical areas generally average enough rainfall, but the timing is often irregular and unpredictable. The rain drops are large and the rate of fall often torrential. One answer to irregular moisture is storage and irrigation, but this is countered in these regions by incredibly high rates of evaporation. In the Agra region of India, for example, rainfall exceeds the needs of local agriculture for only two months in the year, and the excess held in the soil in those wet months dries up in only three weeks.^[224] Tropical zones are also more prone to endemic water-borne and parasitic diseases such as cholera and malaria.^[225] As a result of climate change, the Gangotri Glacier, among others, is receding.^{[226] [227]} Also, of the 3 million premature deaths in the world that occur each year due to outdoor and indoor air pollution, the highest number are assessed to occur in India.^[228]

India has a diverse mix of various religions and races. The majority are Hindus by religion, followed by Muslims, Sikhs, Christians, Jains, Buddhists, Bahaii and many more. Though most religions in India have been practising religious tolerance in their histories, the partition and subsequent terrorism had created some degree of uneasiness among some. The uneducated masses of these various groups sometimes get at odds with one another.^{[229] [230] [231]} However in recent years, relations between the different religious groups have considerably changed for better. For instance, a real chunk of India's celebrities - sporting legends, film stars, industrialists, artists, politicians, scientists, head-of-state, etc - have come from various non-majority roots, representing the emerging face of new diverse India.^[232]

The problem of India's social divide is often linked to its millennial-old caste system.^[233] In an attempt to eliminate the caste system, the Indian government has introduced special quotas for low-caste Indians in educational institutions and jobs. The measure is with the motive of helping lower-caste Indians to pursue higher education and thereby elevate their standard of life. However, the system is often criticised about its effectiveness as so called creamy layer (rich among the lower caste) get non-needed advantage & leave other lower caste groups poor only.^{[234] [235]} There also have been cases of reverse-discrimination and persecution of upper castes by lower castes ^[236][237].

People's Republic of China

People's Republic of China

The People's Republic of China receives continual coverage in the popular press of its potential superpower status,^[238][239] and has been identified as a rising or emerging economic and military superpower by academics and other experts.^{[240][241][242][243]} Professor Shujie Yao of Nottingham University has said "China will overtake the United States to become the world's largest economy by 2038 if current growth rates continue," and that China's GDP will overtake that of Japan by 2017 or 2018, and Germany's by 2008. Professor Yao thinks that "under an optimistic scenario," "China could become a real superpower in 30 years time."^[244] Though in late 2007, China's economic power 'shrank' when the World Bank reported that they had overestimated China's economy by about 40%. Although the finding was based on a PPP estimation of the Chinese GDP, which the above estimations do not depend on.^[245]

Geoffrey Murphay's China: The Next Superpower argues that while the potential for China is high, this is fairly perceived only by looking at the risks and obstacles China faces in managing its population and resources. The political situation in China is too fragile to survive into superpower status according to Susan Shirk in China: Fragile Superpower.^[246] Other factors that could constrain China's ability to become a superpower in the future include: limited supplies of energy and raw materials, questions over its innovation capability, inequality and corruption, and risks to social stability and the environment.^[247]

Factors

The People's Republic of China covers a total area of approximately 9.6 millions km² ^[248][249] which is the third or fourth largest in the world. ^[250] China's land possesses vast wealths of valuable natural resources such as coal, oil, and minerals ^{[251] [252]}. In view of PRC's extensive river network and mountainous terrain, there is ample potential for the production of hydroelectric power ^{[253] [254]}. Most areas of China enjoy a temperate climate and China has one of the world's largest land masses within the temperate zone. According to a report by Jeffrey Sachs, nations in temperate climate zones generally have higher agricultural productivity and face lower rates of infectious diseases than tropical regions (particularly endemic water-borne and parasitic diseases). Moderate advantages in geography can lead to big differences in long-term economic performance through the development of innovation from excess labor productivity. Sachs believes this climate makes most economies in this region high-income, but categorizes China, Russia and much of Eastern Europe as middle-income economies because of their socialist past.^[255] "Geography as destiny" and the benefits of a temperate climate toward economic development were first proposed by Adam Smith and recently by David Landes in his The Wealth and Poverty of Nations. ^[256]

China's population is the world's largest, with about 1.3 billion citizens ^[257]. With the global human population currently estimated at about 6.5 billion, China is home to approximately 20%. China's controversial One-Child Policy has enabled families to devote more resources to their offspring and has been beneficial in terms of curbing population growth, aiding economic growth, and improving the health and welfare of women and children. ^[258] The adult (ages 15+) literacy rate in China in 2005 was at 90.9% with near gender parity.^[259] However, some believe population control may eventually have a detrimental effect on mainland China's aging demographics (see factors against section).

The 2.25-million-strong People's Liberation Army makes it the largest military in the world, in terms of sheer number of troops (13.25 million if the People's Armed Police and the Militia are included ^[260][261]). However, the PLA is behind advanced Western militaries in many areas. Recognizing this fact, the PRC is undergoing a massive effort to improve and modernize its military technology, equipment, and power projection capabilities. As part of its overall program of naval modernization, the Chinese People's Liberation Army Navy has a long-term plan of developing a blue water navy. ^[262] - all fueled by a rapidly growing defense budget. ^[263]

As one of the five permanent members of the United Nations Security Council with veto power, the PRC possesses influence in world politics. The PRC is gradually increasing its influence in areas which are traditionally dominated by the influence of Western countries. This is in part due to the PRC's non-ideological approach to foreign affairs and offer of no-strings-attached assistance, which thus presents an alternative for seeking foreign aid and potential allies. Its ties with these countries have become closer driven by strengthening economic bond through trade and strategic investment, and to a much lesser extent, military cooperation ^[264][265].

Mainland China is Japan's, South Korea's and Taiwan's largest trading partner.^{[266][267][268]} Growing trade and investment have given the PRC a greater politico-economic leverage over Mongolia.^[269] The PRC also has a considerable influence in the military, economy, and politics of North Korea.^[270] As the Chinese economy grows, a major priority is securing natural resources to keep pace with demand. China has made energy trading deals with Central Asian nations. In addition to trade ties, the PRC has contributed aid and funding to the region's countries.^[271] The Shanghai Cooperation Organization, of which the PRC is a founding member, is also becoming increasingly important in Central Asian security and politics. Some observers believe the PRC is primarily concerned with securing its borders as it emerges as a world power.^[272] The Middle East is a strategically important region as it not only possesses vast oil reserves, but large portions of its population are opposed to the United States, the world's only superpower. China has sought out these oil reserves and has also provided security deals to Middle Eastern nations in the face of global condemnation of Middle Eastern terrorism. China's fast economic growth also means that China is consuming more energy. China is now the second largest consumer of petroleum products in the world after the United States. The PRC has recently been trying to secure and diversify sources of its energy (oil and gas) supplies from around the world. The Middle Eastern region, which contains the world's largest proven oil reserve, has been the focus of that policy. Roughly half of China's imported oil comes from the Middle East. At the same time, these energy-producing Middle Eastern nations are keen to diversify their customer base away from overdependence on the Western market (Europe and North America) as a demand source and so they have begun to look at other rapidly growing markets such as China. In addition to the deepening bilateral relationship in the trade and energy sectors, the PRC has an expanding body of other strategic interests in the greater Middle East region. This is manifested in its security relationships with Saudi Arabia, Pakistan, and Iran, which entail WMD and ballistic missile cooperation. These include contentious arms deals which included providing Saudi Arabia and Iran with weapons which could not only harass oil tankers and American aircraft carriers, but also carry nuclear warheads. There are concerns that nothing is being done to stop these arms from falling into terrorist hands. ^[273] In fact, some of the weapons being used in Iraq by the growing insurgency there are based on Chinese designs.^[274].As one of the only sources of such technology to the region, China has placed itself in a strong position to further exert influence on Middle Eastern nations.^[275] Saudi Arabia, Iran, and Pakistan are pivotal states in the region. They are somewhat likely to view the PRC in coming years as an alternate source of security and as a counterbalance to American power ^{[276] [277] [278]}. While China runs a trade deficit with India, it has trade surpluses with other South Asian economies (including Bangladesh, Nepal, Sri Lanka and Pakistan). It has conducted large arms deals with Pakistan. After the United States's nuclear deal with India, the PRC controversially offered Pakistan and Bangladesh nuclear power plants. To maintain relations with India, the PRC has decided to lay down its claims to the Indian state of Sikkim, although this political stance of appeasement is detrimental to China's power. The PRC has also contributed to the improvement of the development sector of all South Asian economies apart from India ^[279]. China's investment in the said economies has gained a strategic foothold and build a" diplomatic profile in the region, having transformed the region from India's purported "near abroad" into China's own backyard ^[279]. Some of the PRC's geopolitical ambitions focus on Southeast Asia, where the PRC is intent upon establishing a preeminent sphere of influence. The PRC has pursued this ambition with a diplomatic campaign designed to increase its influence politically and economically. In November 2006, the PRC conducted several agreements with Southeast Asian countries to increase free trade, cultural ties, military and security cooperations, and solutions to settle the disputes regarding the ownership of the Spratley Isles. The talks also discussed a possibility to form a political, economic, and security bloc between the PRC and the ASEAN in the near future. ^{[280] [281] [282]} Since the 1960s and 70s the PRC has set out to improve relations with Africa. The PRC's interest centered on building ideological sol­idarity with other underdeveloped nations to advance communism and on repelling so called, Western "imperialism". Following the Cold War, the PRC's interests evolved into more pragmatic pursuits such as trade, investment, and energy ^[283]. In November 2006, China hosted the heads of states of 48 African countries in Beijing's Forum on China-Africa Cooperation Summit to strengthen its economic and political influence in the continent. ^[284] African leaders now regularly cite China as the ideal development model for their countries.^[285] Recent years have seen the PRC's growing economic and political influence in South America and the Caribbean. During a visit to Brazil, Argentina, Chile, and Cuba in November 2004, PRC President Hu Jintao announced US$100 billion worth of investment over the next decade ^{[286] [287] [288]}. For instance, Cuba is turning to Chinese companies rather than Western ones to modernize its crippled transportation system at a cost of more than US$1 billion, continuing a trend of favoring the fellow communist country that has made China Cuba's second-largest trading partner after Venezuela in 2005 ^[289]. In addition, The PRC is expanding its military-to-military contacts in the region. The PRC is training increasing numbers of Latin American military personnel, taking advantage of a three-year old U.S. law that has led to a sharp decline in U.S.-run training programs for the region ^[290].

China's GDP has grown at a rate of at least 10% per year for more than 25 years (although recently the government has sought to slow this growth to curtail overheating and waste), one of the fastest growth rates for a major economy in recorded history ^[291]. In 2005, China became the fourth largest economy in the world in terms of market exchange value ^[292] and the second largest when measured by purchasing power parity, with a GDP (PPP) of US$8.8 trillion in 2006. In the same period of time, it has moved 300 million people out of poverty and raised the average Chinese person's income by a factor of 8. ^{[293] [294]}. China’s population is so large and its economy growing so quickly that the Chinese are set to take over second place in the league table of the world’s wealthy people in the next decade, second only to the United States.^[295]

China has many cities with large populations; 170 cities have a population of over one million people.^[296] Most of them are encircled with expressways (for example, the Ring Roads of Beijing).^[297] These metropolises are national or regional centers of industrial, financial, and cultural activities. Shanghai, China's largest city, is an important financial center in Asia and has the world's busiest port.^[298] China's international trade grew at an annual average rate of 29.5% in the last four years ^[299]. China’s export share is 7.3% and import share is 6.3% in world trade in 2005 ^{[300] [301]}. China is currently the world's third largest trading power (after the United States and Germany) ^{[302] [303]}. The PRC government also put great efforts to push for exporting medical supplies and software. China's foreign exchange reserves reached $1 trillion (October 2006), becoming the largest in the world ^[304]. China's infrastructure has radically improved in last two decades. The total expressway length was about 41,000 kilometers at the end of 2005, the world's second longest only after the United States. ^{[305] [306]} Several thousands of kilometers of new expressways are added to form the nationwide expressway network every year ^[307]. China has the world's first commercially operational maglev train and also has plans to build several other high speed train railways, including the 1300-kilometer Beijing-Shanghai Express Railway and the Shanghai-Hangzhou Maglev Train. China is home of many of the world's busiest ports. Communication infrastructure in China has also rapidly risen in the last decade, and today China has more main telephone lines and mobile cellular telephones than any other economy ^{[308] [309]}. As of 2005, there are more than 459 million cellphone subscribers in China and China is currently second only to the United States in number of internet users. Currently, China's infrastructure leads significantly when compared to that of India, which is also considered as a potential superpower.^{[310] [311] [312]}. China is the world's second biggest spender on research and development, and is expected to invest over $136 billion in 2006 after growing more than 20% in 2005.^[313] China currently has an estimated 926,000 researchers, second in number only to the 1.3 million in the United States.^[314] R&D spending by the PRC government has more than tripled since 1998. Moreover, the numbers of the scientific research paper doubled in the same period. According to experts, China might produce more engineering doctorates than the U.S. in 2010. Many foreign companies are setting up R&D centres in China due to official government support and to tap lower-cost Chinese talents. ^[315].

Space technology The PRC launched its first satellite Dong Fang Hong I to Earth orbit on its own Long March rocket in 1970, becoming the fifth nation to achieve independent launch capability. The PRC also became the third country (after the former Soviet Union and the USA) to send humans into space on its own in 2003. The PRC has said that it plans to launch its own space station and to send a manned mission to the moon by 2020. ^[316]

China has an extensive historical culture and philosophy. Chinese novelist Gao Xingjian won Chinese first Nobel Prize for Literature in 2000, and the Chinese-language film Crouching Tiger, Hidden Dragon became the highest grossing non-English film. Many Chinese actors such as Jackie Chan and Jet Li have gained international recognition. Jackie Chan in particular has come in the spotlight for his performance in English language films such as Rush Hour, The Tuxedo and Shanghai Noon. Yao Ming, who plays in the U.S. National Basketball Association's Houston Rockets, has rapidly advanced in fame, and the PRC is set to host the 2008 Summer Olympics. The enrollment of foreign students in mainland China has tripled to 110,000 from 36,000 over the past decade ^[317], and the number of foreign tourists has also increased to 41.8 million in 2004 ^{[318] [319]}. The PRC has created 26 Confucius Institutes around the world to teach its language and culture, and while the Voice of America was cutting its Chinese broadcasts to 14 from 19 hours a day, China Radio International was increasing its broadcasts in English to 24 hours a day ^[320].

China has a long history spanning many thousands of years and stood as a leading civilization in Asia. Many Asian countries were a part of the century-old Chinese tributary system. China strongly influenced its neighbors in politics, arts, philosophy, religion, and culture until the rise of the Western powers and Imperial Japan.^{[321] [322] [323]}. The PRC government has always put strong emphasis on developing a strong primary educational system. China has over a 90% literacy rate according to 2002 statistics.^[324] China's youth (age 15 to 24) literacy rate is 98.9% (99.2% for males and 98.5% for females) in 2000.^[325] The PRC has also put science and technology as priorities in its education.^[326] Such emphasis may explain the performance of mainland Chinese high school students in the mathematics, physics, chemistry, and biology areas of the International science olympiad.^{[327] [328] [329] [330]}

Another important factor is the strong and economically influential Overseas Chinese around the world, especially in Southeast Asian countries like Malaysia, Singapore, Indonesia, Thailand, and throughout the United States and the Western world ^{[331] [332]}. There are more than 60 million overseas Chinese spread throughout the world. The overseas Chinese have a GDP equivalent to about US$1.1 trillion, or one of the top 10 world economies if combined and are a large economic contributor to China's growing economy. ^[333] Some of these overseas Chinese (particularly older emmigrants from China) preserve their cultural identity and form communities in the host nations known as "Chinatowns", which help to raise awareness of Chinese culture in those foreign countries. Chinese culture also strongly influences and forms the basis of the regional cultures of East Asia. East Asian countries adopted much of the Chinese essence in philosophy, language, and ancient technology. An example is Confucianism - a philosophical thought originated from China - which holds a great influence on not only the Chinese but also the Japanese, Koreans, Vietnamese, and other East Asians.^[334]

Problems

PRC's military capabilities (technology and power projection) are still small compared to that of the United States (and the European Union as a unit). The PRC has little confirmed force projection capabilities and lacks vital components of a blue water navy and a long range air force. For example, in terms of operational land-based ICBM systems, the USA possesses the second most lethal strategic capability after Russia, which includes a more reliable arsenal and a massive numerical edge in ICBMs over the PRC. In space technology, the PRC is currently lagging behind the level of development of the United States and Russia, though that in part can be attributed to a late start.

Two major factors contribute to PRC's late remodernization campaign. For one, PRC's previous long-term dependence on Soviet-era military technology has produced a significant lag of indigenously produced hardware. It was not up until the 1960s Sino-Soviet split that the PRC was forced to rely on their own scientists, rather than Soviet engineers to help modernize PRC's military technology. Furthermore, the surge of violence and bloodshed against intellectuals during the Cultural Revolution during this time period, resulted in a shortage of trained and skilled engineers and military leaders to tackle the task of rebuilding PRC's military. These two factors combined help explain why PRC military hardware is currently not up to par with Western armies.^[335]

Malaysian strategic thinker Bunn Nagara has claimed that "The Chinese armed forces are technologically backward, compared even to the Russians -- which in turn are backward compared to NATO", while Sakanaka Tomohisa calls the "so-called Chinese military threat more psychological than real-world". ^[336]

The PRC has had difficult relationships with many world powers. A major ongoing dispute is the issue of Taiwan. The PRC has threatened to use force to impose reunification with the Republic of China (ROC) and to thwart any declaration of Taiwanese independence. Most countries in the world maintain diplomatic relations with the PRC and are obligated to follow its One China policy, but the United States is obliged by the Taiwan Relations Act to help defend Taiwan should there be any invasion from the mainland. Therefore, a military conflict in the Taiwan Strait could lead to a confrontation between the People’s Republic and the United States, which could be devastating to both sides. Additionally, the United States is still suspicious of China's international ambition. ^[337] PRC's relations with India, its large southern neighbour sharing a long and contentious border, are far from friendly. Apart from border disputes, the erstwhile ruler of Tibet was granted asylum in India, increasing tensions between these nations that led to the Sino-Indian War in 1962. The PRC's nuclear capabilities and its close military ties with India's main enemy, the Islamic Republic of Pakistan, forced India to seek its own nuclear umbrella, although both India and the PRC have declared a 'No first use' policy.

Access to information is believed by some to be the key to the development of science and technological ideas^[338] and PRC control over information may therefore hamper its growth in these areas. The PRC already places less strict control over the media in mainland China - an example being the growth of the Internet and the spread of increasingly commercially-driven media.^[339] However, there are certain limits to such liberalization.^[340] For instance, censors are still blocking access to certain websites deemed "inappropriate" (e.g. politically sensitive, pornographic sites, etc.), including Wikipedia. ^[341]

Some of PRC's allies, particularly African and Latin American nations, are politically and/or economically unstable, which could lead to unexpected twists in foreign relations.The idea that the PRC supplied the technology for additional nuclear power to Pakistan could make its relationships with nations like India, the United States and the United Kingdom more difficult. ^{[279] [342] [343]} PRC's "neutral" foreign policy acknowledges the right of every state to its own political system, with economic investment being beneficial to any foreign state regardless of internal affairs. Other countries have continually asserted the need for certain universal values and ideals, such as democracy and human rights. PRC's disregard for these considerations has led to criticism that its actions have the effect of sheltering repressive states such as Zimbabwe and blocking effective action on genocide in Sudan.^[344][285].This has contributed to a growing backlash and simmering grassroots resentment against China in African countries^[285].

There has been a national debate about judicial independence in mainland China's closed political system. In mainland China, the government, not a court, is the final arbiter of law. Mainland China's court system is far from an independent entity that can curb government power. Instead, the courts often remain a pliable tool to reinforce that power (for instance, court rulings that favor state interests). Many judges are poorly educated in the law and are corrupt. Judges often must answer to government officials as much as to the law. Political pressure is common, and private trial committees often dictate rulings. Although there are signs of change, such as the emerging civic belief that ordinary people have "legal rights", such changes continue to meet enormous resistance within the system ^{[345] [346]}.

Western governments, human rights organizations, and groups within China have often criticized the PRC on its human rights record in mainland China and often use this issue to shape policies towards the PRC. For example, the US justifies continued resistance to lift its arms embargo against China, as well as that of the EU, based upon the issue of human rights. One prominent case of accusations of human rights violations comes from the Falun Gong movement, which claims that the PRC government persecutes its members in mainland China and campaigns outside of mainland China for an end to this. The government of the People's Republic sees Falun Gong an anti-national cult. These claims are not supported by the United States congress, who passed a resolution^[347] declaring Falun Gong to be a peaceful religion, and that the Ziang regime has created a notorious government, with '610' offices throughout the People's Republic of China with the special task of overseeing the persecution of Falun Gong members through organized brainwashing, torture, and murder. The CPC is engaging in suppressing information on the sect ^{[348] [349]}, including suppression of wikipedia (see History of Wikipedia). On the other side, several Falun Gong sympathetic media have criticized the CPC ^[350], and rejected their authority, suggesting that some prospect for political civil disobedience. There has also been unrest in the Tibetan Plateau in the past, with calls for Tibetan independence still a controversial issue.^{[351] [352] [353]}

There have been other cases of oppression of religion in the country ^{[354] [355]} China's record on religious freedom remains poor, despite some improvements over the past 25 years^[356]. United States Secretary Condoleezza Rice has designated China as a “country of particular concern” under the International Religious Freedom Act, which carries specific sanctions, such as barring China from consideration for certain types of aid^[356]. These issues are relevant to China's Emergence as an Economic Superpower and Its Implications for U.S. Business^[356].

Mainland China still faces great difficulty in solving the mass unemployment problem in the urban and rural areas ^{[357] [358] [359]}. Furthermore, although the eastern seaboard areas of mainland China have experienced a tremendous (often double-digit) economic growth rate and are major recipients of FDI into the country, similar breakneck growth rate has been lacking in the relatively undeveloped western areas. To close the gap and to catch up with mainland China's wealthier eastern provinces, the government has initiated the China Western Development strategy ^[360], the Revitalize Northeast China initiative ^[361], and the Rise of Central China policy ^[362].

On a more micro-scale, there's also a big gap over urban-rural population wealth ^[363]. This great disparity in urban-rural income (on average, urban residents earned three times more income than their rural counterparts) ^[364] has caused concerns such as social discontent. 42 million mainland Chinese lived below the official poverty line in 1998 and 100 million lived on less than US$1 per day, a standard which is classified by the World Bank as extreme poverty ^[365]. However, the number of people living under the poverty line in the country had dropped from 250 million in 1978 to 29 million by the end of 2003 ^[366]. The incidence of poverty in mainland China also dropped from 30.7 percent to 3.1 percent in the period ^[367]. In response to the rural poverty, the government has taken steps such as abolishing the 2,000-year-old agricultural tax ^[368], exempting personal income tax for those receiving monthly income below 1,600 yuan ^[369], and increasing investments in rural infrastructure, education, and health services to boost consumption and development in rural areas ^[370].

The mainland Chinese economy has a great dependence on foreign trade and investments. Investment and export sectors collectively account for about 80% of mainland Chinese GDP and are still growing at close to a 30% annual rate. This is an unsustainable outcome for China (and the US on the consumption side of the global economy). Further sharp increases in investment are a recipe for capacity overhangs and deflation, which could cause an abundance of goods to sell with no countries to sell them to. A scenario such as this is very similar to what caused worldwide recession in the 1930s. Continued sharp gains in exports are a recipe for trade frictions and possibly protectionism in other countries. China is now proposing to tackle its excess saving and subpar consumption story with the same fervor evident when it went after other aspects of its growth and reform story during the past 28 years. Pilot projects already have been established in setting up a safety net, especially in the social security area; moreover, under the terms of China’s WTO accession, the opening of domestic services is likely to accelerate over the next 3-5 years, thereby relieving some of China's external dependency. ^[371].

In response to mainland China's ballooning trade surplus with the West, Western governments assert that its currency (see Renminbi) is currently greatly undervalued ^[372]. Some also assert that the PRC government has unfairly manipulated the yuan exchange rate ^{[373] [374]}. When the currency is thoroughly revalued, it is possible that the outsourcing of jobs to mainland China would lessen somewhat. While a stronger currency is a concern for mainland China's manufacturing industry, a positive effect could see the reduction of mainland China's over-reliance on foreign trade and investments as the current main engine for its economic growth. It will thus cause domestic consumption to increase its role in fuelling the economic growth. This type of growth would be more stable towards external economic conditions and sustainable for longer periods of time. In 2005, the share of domestic consumption in mainland China's overall GDP has fallen to slightly less than 50%, significantly below the U.S. share of 71% (most other industrialized nations such as the U.K., Japan, and Australia have shares of around 60-70%) ^{[375] [376]}.

Mainland China's overall trade surplus has increased dramatically in recent years creating an imbalance in the world economy. For example, mainland China keeps a trade surplus of US$200 billion with the United States ^[377]. However, products that are labelled Made in China are not necessarily developed or designed in mainland China. In fact, 60% of mainland Chinese goods that are exported come from overseas-invested factories, according to PRC customs data (note though, Hong Kong, Macau and Taiwan, which make up the majority portion of investments in China, are considered overseas and separate from mainland China in PRC economic data) ^{[378] [379]}. Mainland China has become a focal point for assemblies, where final products are assembled and/or tested, but not necessarily manufactured there. The main components are often imported from other countries. Thus, despite mainland China's huge trade surplus with the West, it has a trade deficit of US$137 billion with Asian countries (Taiwan: US$58 billion, South Korea US$42 billion, Japan: US$16.5 billion) ^{[380] [381]}.

The "epidemic" of piracy in mainland China is spreading. For instance, U.S., European and Japanese companies had reported combined losses to mainland Chinese piracy of at least US$60 billion in 2003 ^[382]. Piracy in mainland China is rampant and negatively affects everything from computer software and pharmaceuticals to clothing, auto parts and chewing gum. It affects both mainland Chinese and foreign IPR holders, and is a growing concern for major trading partners such as the United States and the European Union. Such IPR violation may reduce mainland China's creative power potential and hold back mainland China's own innovators and entrepreneurs ^[383].

As a result of previous and current growth-at-all-costs strategy, mainland China's environment is in a state of serious degradation. Soil erosion, desertification, air pollution, loss of arable lands, and steady falling of water table especially in the north are serious problems and are estimated to cost the mainland Chinese economy billions of dollars per year. Water is already a scarce commodity in mainland China (especially in northern arid regions) where per capita water supplies are less than a quarter of the world's average. Pollution from coal causes over 250,000 deaths annually. By 2020, it is predicted that mainland China will account for up to 19 per cent of global carbon dioxide emissions. ^[384] Currently, water in China contains dangerously high level of radiation, which has led to radiation-related death and sickness, particuarly within its Fujian Province.^[385] To respond to these problems, the PRC government has embarked upon a number of projects such as Great Green Wall project (planting billions of trees to hold back desertification) and building canals to divert water from water-abundant southern regions to arid northern regions.

Due to the lack of openness of the mainland Chinese society in general, economic crimes such as corruption and collusion have become rampant among party and government officials, and this may hinder mainland China's economic growth and hurt the confidence of investors. ^[386] Combined with worsening social problems in mainland China (due to wide urban-rural income gap), there have been growing social discontent and about 87,000 big and small-scale demonstrations occurred throughout mainland China in 2005.^[387] Most of these discontents are not political; rather they are due to economic reasons. Peasants for example, are being forced to leave their land and are compensated poorly. Their confiscated lands are then sold at a much higher price with the local officials keeping much of the profits.^{[388] [389]}

In some technology fields, mainland China is still behind its counterparts such as the United States, Russia and the European Union, and lacks in the number of leading world-class research scientists.^{[390] [391]} Furthermore, despite the large number of university graduates produced in mainland China every year, only a relatively small fraction has sufficient quality or professional experience to work in multinational companies (MNCs).^{[392] [393]} The Chinese government is trying to address the problem by giving massive injections of governmental funding into mainland Chinese universities and hopes to transform them into world-class institutions. These funds are intended for attracting top foreign-educated and overseas-born Chinese, building cutting-edge research centers, partnering with the world's best educational institutions, and developing new programs taught in English.^[394] However, despite this, China's weak High-Tech export industry lacks economic competitiveness and a capacity for independent innovation.^[395] In PC exports, China's real export is less than $10 billion and the sales profability of high-tech industries from China has decreased, indicating that other nations around the world are reaping rewards of strong high-tech economies.^[396]

A side effect of the One-child policy is mainland China's rapidly aging population.^[397] It is predicted that by 2020, 25% of mainland China's population will be considered retirees, so they cannot contribute to the work force. It is expected that by the 2040s, 430 million Chinese will be above the age of sixty.^[397]

This could disadvantage its economy, but on the other hand many feel uncontrolled population growth is not a feasible option either. Although officially banned by the central government, local authorities - under the pressure of job promotion - sometimes committed forced abortions in order to enforce the One-child policy. Cultural preference over sons has also encouraged gender-based abortion including female infanticide, despite it being illegal in mainland China. If trends continue, there will be 30-40 million more men of marriageable age in 2020 than there are women.^[397]

^[398]

Recent findings have also shown that despite the One-Child policy, China is still growing at an uncontrollable rate.^[397] The total population of China is set to reach 1.5 billion in 2033.^[397] By this point, it is expected that the Chinese people will be strained for water and food resources.^[397] The continued overpopulation also means there will be increased demand for jobs, leading to rampant unemployment damaging the economy.^[397].

The Cultural Revolution which China experienced in the 1960s-70s had devastated a significant part of China's historical and cultural relics. In the modern times, the government has tried to revive traditional Confucian values (political catch-phrase: "harmonious society") and embarked on public initiatives to protect and preserve Chinese cultural heritage as well as historical artifacts. However, more often than not, such initiative comes head-to-head against China's desire to modernize itself rapidly. For instance, traditional hutong^[399] (in Beijing) and shikumen^[400] (in Shanghai) homes are being demolished at an alarming rate to make way for modern developments such as high-rises and wide boulevards. Even when buildings are designated as protected or historic sites, they can be knocked down in the frenzy of development. Local officials often collude with private developers or accept bribes. The encroachment of globalization (especially Western culture) has also resulted in the fading of Chinese traditions.^[401] The impact of such loss on the society is debatable although the pursuit for raw materialism over the past few decades have left a spiritual void among the Chinese. As a result, many Chinese today are interested in rediscovering their connection with the past.^[402]

Some traditional Chinese users, especially for Taiwanese, often critise the formal use of simplified Chinese in China and Southeast Asian countries such as Singapore and Malaysia because the communist attempt to simplify traditional characters is believed to be negating China's cultural past because as more and more young Chinese people read only simplified text and forget traditional Chinese, there will be few who will be able to translate and read ancient Chinese artifacts and scrolls.^[403][404]

Russia

Russian Federation

The Russian Federation is a suggested potential candidate for achieving superpower status in the twenty-first century due to its fast-growing economy, energy superpower status and the size of its military. According to Steven Rosefielde of the University of North Carolina, Chapel Hill, Russia intends to "reemerge as a full-fledged superpower," and "contrary to conventional wisdom, this goal is easily within the Kremlin’s grasp, but the cost to the Russian people and global security would be immense" (Rosefielde 2005:1). Rosefielde further argues that "Russia has an intact military-industrial complex...and the mineral wealth to reactivate its dormant structurally militarized potential," and that "supply-side constraints don’t preclude a return to prodigal superpowerdom" (Rosefielde 2005:9).

In May 2007, the U.S. Commission on Security and Cooperation held special hearings devoted to Russia. They came to the conclusion that Russia is returning to the international arena as an influential political and economic power. U.S. Assistant Secretary of State Daniel Fried, said: "Russia has restored its position of a large political and economic force recently", also adding that "Russia’s strengthening has been accompanied by a cool down in its relations with the U.S." Russian Prime Minister Vladimir Putin said that the West "has few instruments of influence on Russia left." ^[405]

Alexander Golts of the St. Petersburg Times argues that Putin's confrontations with the US on nuclear issues are in pursuit of regaining superpower status for Russia.^[406]

In a more recent report by ABC News, a senior U.S. official asserted that "Russia is once again indisputably the number two military power in the world, second only to the United States".^[407] Russia's military strength has risen substantially under former President Putin, having recently produced the world's most powerful conventional bomb^[408] and the worlds most advanced anti-ballistic missile system ^[409] to date. Additionally, its forces are currently in the midst of a $189 billion ($302 billion PPP) modernization plan. Russia's defence minister, Sergei Ivanov, said that he wanted to exceed the Soviet army in combat readiness.^[410]

Mike Ritchie of industry analysts Energy Intelligence says "Russia was always a superpower that used its energy to win friends and influence among its former Soviet satellites. Nothing has really changed much. They are back in the same game, winning friends and influencing people and using their power to do so."^[411]

Russia is often considered to be an energy superpower and a nuclear superpower due to its vast amounts of natural resources and large nuclear arsenal mostly leftover from the former Soviet Union.^{[412][413][414]}

Historical superpower

Though not a superpower, the Russian Empire was indeed an imperial superpower in both size and European affairs. Under the Romanov dynasty and Peter the Great, the Russian Empire was officially founded. Russia entered World War I in the aid of its ally Serbia and fought a war across three fronts while isolated from its allies. Although the army was far from defeated in 1916, the already existing public distrust of the regime was deepened by the rising costs of war, casualties (Russia suffered the highest amount of both military and civilian deaths of the Entente Powers), and tales of corruption and even treason in high places, leading to the outbreak of the Russian Revolution of 1917. A series of uprisings were organized by workers and peasants throughout the country, as well as by soldiers in the Russian army, who were mainly of peasant origin. Many of the uprisings were organized and led by democratically elected councils called Soviets. The February Revolution overthrew the Russian monarchy, which was replaced by a shaky coalition of political parties that declared itself the Provisional Government. The second revolution, the October Revolution, led by Vladimir Lenin, overthrew the Provisional Government and created the world’s first Communist state.

Following the October Revolution, a civil war broke out between the new regime and the Socialist Revolutionaries, Mensheviks, and the White movement. Following victory in the Civil War, the Russian SFSR together with three other Soviet republics formed the Soviet Union on December 30, 1922. The Russian Soviet Federative Socialist Republic dominated the Soviet Union for its entire 74-year history; the USSR was often referred to as "Russia" and its people as "Russians." The largest of the republics, Russia contributed over half the population of the Soviet Union. The Bolsheviks introduced free universal health care, education and social-security benefits, as well as the right to work and housing. Women's rights were greatly increased through new laws aimed to wipe away centuries-old inequalities.^[415] Notably, Russia became the first country in the world with full freedom of divorce and legalized abortion. After Lenin's death in 1924 Joseph Stalin consolidated power and became dictator. Stalin launched a command economy, rapid industrialization of the largely rural country and collectivization of its agriculture and the Soviet Union transformed from an agrarian economy to a major industrial powerhouse in a short span of time.

After World War II and such incidents as the 1956 Suez Crisis made it clear that the British Empire, economically ravaged by two world wars, could no longer compete on an equal footing with the United States and Soviet Union without sacrificing its reconstruction efforts, even while acting in concert with France and Israel. As the majority of World War II was fought far from its national boundaries, the United States did not suffer the industrial destruction or massive civilian casualties that marked the wartime situation of the countries in Europe or Asia. During the war, the United States had built up a strong industrial and technological infrastructure that had greatly advanced its military strength into a primary position on the global stage.

Following the war, most of Europe had aligned either with the United States or the Soviet Union. Despite attempts to create multinational coalitions or legislative bodies (such as the United Nations), it became increasingly clear that the United States and the Soviet Union were the dominant powers of the newly emerging Cold War, and had very different visions about what the post-war world ought to look like. The two countries opposed each other ideologically, politically, militarily, and economically. The Soviet Union represented the ideology of communism, whilst the United States represented the ideologies of capitalism and democracy. This was reflected in the Warsaw Pact and NATO military alliances, respectively. These alliances implied that these two nations were part of an emerging bipolar world, in contrast with a previously multipolar world.

From 1985 onwards, Mikhail Gorbachev introduced the policies of glasnost (openness) and perestroika (restructuring) in an attempt to modernize the country. The USSR economy was the second largest in the world prior to the Soviet collapse.^[416] During its last years, the economy was afflicted by shortages of goods in grocery stores, huge budget deficits and explosive growth in money supply leading to inflation.^[417] In August 1991, an unsuccessful military coup against Gorbachev aimed at preserving the Soviet Union instead led to its collapse. In Russia, Boris Yeltsin came to power and declared the end of Communist rule. The USSR splintered into fifteen independent republics and was officially dissolved in December 1991. Boris Yeltsin was elected the President of Russia in June 1991, in the first direct presidential election in Russian history.

Economics

Russia has the world's largest natural gas reserves, the second largest coal reserves and the eighth largest oil reserves. It is the world's leading natural gas exporter and the second leading oil exporter. Oil, natural gas, metals, and timber account for more than 80% of Russian exports abroad. The EIA stated that the Russian economy is very depenent on oil and gas exports^[418] Since 2003, however, exports of natural resources started decreasing in economic importance as the internal market strengthened considerably. In 2005 the IMF and World Bank suggested that the oil and gas sector represented around 20% of the GDP, generated over 60% of its export revenues (64% in 2007)^[419]. Russia is also considered well ahead of most other resource-rich countries in its economic development, with a long tradition of education, science, and industry.^[420] The country has more higher education graduates than any other country in Europe.^[421]

Over the last five years, fixed capital investments have averaged real gains greater than 10% per year and personal incomes have achieved real gains more than 12% per year. During this time, poverty has declined steadily and the middle class has continued to expand. Russia has also improved its international financial position since the 1998 financial crisis. A principal factor in Russia's growth has been the combination of strong growth in productivity, real wages, and consumption.^[422] Despite the country's strong economic performance since 1999, however, the World Bank lists several challenges facing the Russian economy including diversifying the economy, encouraging the growth of small and medium enterprises, building human capital and improving corporate governance.^[423] High inflation continues to plague the country along with many of its Eastern European neighbors, having grown to about 12% by the end of 2007 up from 9% in 2006. The upward trend continued in the first quarter of 2008, driven largely by rising food costs.^[424][425]

Military

Russia assumed control of Soviet assets abroad and most of the Soviet Union's production facilities and defense industries are located in the country.^[426] The Russian military is divided into the Ground Forces, Navy, and Air Force. There are also three independent arms of service: Strategic Rocket Forces, Military Space Forces, and the Airborne Troops. In 2006, the military had 1.037 million personnel on active duty.^[427] Russia has the largest stockpile of nuclear weapons in the world.^[428] It has the second largest fleet of ballistic missile submarines and is the only country apart from the U.S. with a modern strategic bomber force.^[428] The country has a large and fully indigenous arms industry, producing all of its own military equipment. Russia is the world's top supplier of weapons, a spot it has held since 2001, accounting for around 30% of worldwide weapons sales^[429] and exporting weapons to about 80 countries.^[430] Following the Soviet practice, it is mandatory for all male citizens aged 18–27 to be drafted for two years' Armed Forces service, though various problems associated with this is why the armed forces are from 2008 reducing the conscription term from 18 months to 12, and plan to increase contract servicemen to compose 70% of the armed forces by 2010.^[425] Defense expenditure has quadrupled over the past six years.^[431] Official government military spending for 2008 is $40 billion,^[432] though various sources, including US intelligence,^[433] and the International Institute for Strategic Studies,^[427] have estimated Russia’s military expenditures to be considerably higher.^[434] Currently, the military is undergoing a major equipment upgrade with about $200 billion (what equals to about $400 billion in PPP dollars) on procurement of military equipment between 2006 and 2015.^[435]

See also

• Superpower
• Great Power
• Potential great powers

References