From Deseret News archives:

Growth in China, India is topic at BYU

Published: Friday, Aug. 3, 2007 12:41 a.m. MDT
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China and India are experiencing explosive economic growth that will offer both challenges and opportunities for the United States, U.S. vice consul to India Brian Reynolds said Wednesday.

Reynolds spoke at Brigham Young University's David M. Kennedy Center for International Studies. He stressed his comments were his opinions and not those of the State Department.

Reynolds also served for two years in China with the U.S. ambassador and stressed that both countries are emerging as economic strongholds.

Last year, the U.S. gross domestic product was $13 trillion, China's was $10 trillion and India's $4 trillion, showing the economic progress both countries had, Reynolds said.

"When business leaders arrive in China, they're amazed at the opportunities and bewildered by the bureaucratic morass," he said.

India's bureaucratic controls are "virtually unnavigable" because of the extreme corruption within the country. "They don't know how to handle (corruption) because it's at every level of government," Reynolds said. "It's not a big issue to them."

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More Chinese people have started resisting the government's control of business. Thousands of acts of social unrest occur every year in China, with people wanting to break the law in order to get the government's attention and fight for their business rights, Reynolds said. Most of those who fight are executed; others are forced into slavery.

The Chinese government sees democracy as a problem, as its people look to the West for political influence, he said.

"Those people know their system is flawed," he said. "They want to vote, but they won't tell the government that."

More than 130 million people live below the poverty level in China, working low-paid jobs, and the cost of labor in China rises every day, Reynolds said.

China's one-child policy will affect the country's future wealth, he said. With the Chinese population aging at a faster rate than anywhere else in the world, in the future one person could be caring for six. Some Chinese companies already outsource to other countries, such as Indonesia and Vietnam, because of their growing businesses and diminishing work force.

However, Reynolds said the main concern the U.S. should have is the lack of American goods found in Chinese stores — a lack that creates a huge trade deficit.

But despite its problems, China's economy could change its politics.

"Economic liberalization goes hand-in-hand with political liberalization," he said. "Information is going to change China."

India, on the other hand, has a "glut of resources that (are) untapped," Reynolds said.

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