India and China in the New Era

I am conscious of the unique place that this School holds in the governance system of contemporary China and its contribution to the remarkable transformation of Chinese society. Many of you will play a decisive role in shaping China's future development, which will be of great significance for Asia and the world. I can think of no better place than this School to speak about India and China in the new era.Relations between India and China are unique in the world. We are two continuous ancient civilizations. We are neighbours with a long history of cultural, spiritual and economic ties. We both embarked on a new phase of our political histories around the same time. Today, we are the world's two most populous nations, engaged in a process of socio-economic transformation of our people on a scale and at a pace unprecedented in human history.Both our countries have achieved considerable success in this endeavour. Indeed, China's early economic reforms and impressive achievements are a source of inspiration across the developing world. After China, India has been the fastest growing major economy in the world, averaging a growth rate of 7 percent per year over the past two decades and around 8 percent per year during the past ten years. As a result, both our economies have expanded several times. We have achieved a high degree of economic modernization and have lifted hundreds of millions of our people out of the clutches of poverty.In our own ways, we have also had an impact in shaping the global economy - China in the manufacturing sector and India in the services sector.Over the past two decades, the process of economic reforms in India has gone through the rigour of democratic debate, and met the test of political consensus and public support. India's policies have focused not only on accelerating growth, but also on making it sustainable and regionally balanced. We have emphasized not only modernization, but also addressing the challenges of opportunities, capacity and equity for our vast and diverse population. This is the path on which we will continue to move forward.In structural terms, India's growth is propelled by domestic demand and financed largely by our own resources. But we are also increasingly integrated into the global economy. The prolonged global economic crisis has affected us, as it has many other emerging economies. I believe, however, that this is a temporary disruption. In recent months, we have taken measures to enhance foreign investment flows, speed up implementation of major projects, boost infrastructure development, strengthen our financial markets, reform our tax system and make our business environment more attractive.Our effort is to return the Indian economy to a sustained growth rate of 7-8 percent per annum. We believe that the underlying fundamentals of our economy, particularly investment and savings rates, are strong and consistent with this projection.India's critical challenges in the days ahead are precisely in areas where I see opportunities for cooperation between India and China and I would like to highlight eight specific areas in this regard.One: We need to pay much greater attention to the expansion and modernization of our infrastructure. India plans to invest one trillion U.S. dollars in infrastructure in the next five years and we would welcome China's expertise and investment in this sector.Two: We need to increase our agricultural productivity in order to reduce rural-urban disparities in income and manage efficiently the process of mass urbanization, which is a phenomenon common to both our countries. This will mean paying particular attention to the issues of water and waste management.China has significant experience of urbanization and our national planners, city administrators and entrepreneurs should share experiences and seek solutions in dealing with the physical, social, environmental and human challenges of mobility and urbanization. …