India and China: An Advanced Technology Race and How the United States Should Respond (Significant Issues Series)

This book analyzes the rapid development of export-oriented advanced technology industry in India and China and projects the course ahead. Specific issues examined include education, research and development (R&D), foreign direct investment, trade, and technological innovation. Over the coming two to five years, the author s net assessment is that India is likely to continue its 8 to 10 percent annual growth, while China is likely to experience a structural shift from export-led to domestically oriented growth, including lower growth of perhaps 5 to 7 percent per year. The book also provides a comprehensive U.S. policy response to the rise of China and India as "advanced technology superstates." Specific policy recommendations are made in the areas of international finance, trade, and investment. These include a more forceful response to currency manipulation by China and other Asian trading partners, additional free trade agreements across the Pacific and with India as building blocks toward multilateral free trade for nonagricultural merchandise, and negotiated disciplines, starting with transparency, for rapidly growing sovereign investment funds. A corresponding domestic policy agenda includes education, publicly supported R&D for basic research, tax reform, and tort reform.