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The Elephant & The Dragon

"And, therefore, that after Ind and after Cathay the Emperor of Persia is the greatest lord"

-Sir John Mandeville, in the Travels of Sir John Mandeville

Cathay is the Anglicised version of "CATAI" an alternative name for China, which was the original moniker given to northern China by Marco Polo, who described Cathay as an enormous empire, ruled over by a divine Emperor.

Travels in the LAND OF KUBILAI KHAN by Marco Polo has a story called: 'The Road to Cathay'. In English, the word Cathay was sometimes used for China, albeit only in a poetic sense, until the 19th century when it was completely replaced by "China." A person from Cathay (i.e. a Chinese) was also written in English as a Cathayan.

IND is an abbreviation for India. This is derived from the river Indus, which was so named by the Greeks. The Indus River (Urdu: Sindh; Sanskrit and Hindi Sindhu: Persian: Hindu: Tibetan: Sengge Chu "Lion River"; Chinese: Yindu is the longest and one of the most important rivers on the Indian subcontinent. The Indus Valley Civilisation (c 1330 - 1700 BC) was spawned in this region. This was an ancient riverine civilization that flourished in the Indus and Ghaggar-Hakra river valleys in what is now Pakistan and north western India.


The average world population density is 117 people per square mile, that of the United States 76 and that of Macao is 69,000. Australia's is only 6. Post World War 11 - From 1945 through 1996, nearly 5.5 million immigrants settled in Australia. Four out of 10 Australians are migrants or first-generation children of migrants. The following is an ethnic demographics of Australia's population:

  • 92% Caucasian descent
  • 7% Asian descent
  • 1% Aboriginal descent

Since every seventh person in the world is an Indian and every sixth is Chinese, it is only logical that a lion's share of the future intake of migrants to Australia will come from these two ancient civilizations. The middle class in India is larger than the entire population of the USA. China on the other hand has a burgeoning middle class which is escalating by leaps and bounds.

Furthermore, the one-child policy has created a demographic time bomb. Chinese call it the 1:2:4 problem: China's soon-to-be retirees tend to have one working-age person supporting two parents and four grandparent. In the meanwhile, China's population is beginning to age even as India's explodes with youth.

Demographers forecast that by 2030, India will become the most populous nation in the world, surpassing China around the point when both reach 1.45 billion people. Significantly, in 2030, economists predict, India will overtake Japan to become the world's third-largest economy after the United States and China. Thus, India will need far more jobs than currently exist to keep living standards from declining. Therefore, creating vast numbers of jobs for India's poor is crucial: literally a matter of life and death.

Just as China is renowned for becoming the factory to the world, India is fast becoming the world's back office. Of the world's 500 largest companies, 400 send middle-class work to India.

For a little while, India had overtaken China as a source of migrants to Australia. Almost 12,500 Indians settled permanently in Australia in 2006 and thousands more have been arriving until recently to study or take up short-term jobs.

In 2006 alone, the number of Indian migrants grew by 26%, and in the past five years it has more than doubled, with the growing emphasis on attracting fluent English speakers with the skill to find work.

Melbourne is a prime magnet for them. In the three years to June 2006, 11,021 of the Indians settling in Australia chose to live in Victoria. Since 2003, they have consistently been the biggest source of migrants to the state and comprise more than 1% of Victorians.

Australian Bureau of Statistics figures show India has now become the third largest source of Australia's new settlers after Britain (23,320) and New Zealand (20,250). Almost 10% of migrants coming to Australia are Indians.

Almost half of Australia's new settlers in 2006 came from Asia and the Middle East. The number of Asian migrants jumped by more than 5,000 to 54,200, with another 10,730 coming from the Middle East and North Africa.

The migration figures, however, understate the true number of Indians and other foreigners making their home in Australia, since a growing number arrive as students or on short-term employment contracts, and become permanent settlers later.

As per the figures, the entire growth in short-term visitors to Australia in recent years was in people taking up temporary employment contracts, such as the controversial subclass 457 visas, of coming for business or education reasons

Visitors on short-term job contracts alone swelled by 45% to 155,400, five times as many as a decade ago. By contrast, those arriving for a holiday shrank by 2% to 2.9 million, just 15% more than a decade ago.

Since the end of 2011, for the first time in its history, China had supplanted the UK as the chief source of migrants to Australia, followed by India and the Philippines.

During the 2011-12 permanent migration program, Indian applicants made up 15.7 per cent of the total places on the scheme, followed by China and the United Kingdom. In total, seven of the top ten most represented nations in 2012 were Asian countries.

In July 2012, then Immigration Minister Chris Bowen revealed that for the first time, India had become the largest source of permanent migrants to Australia.

The rise of India and China and what it means for us all is the question posed by the near simultaneous emergence of these two Asian behemoths onto the world stage, representing a "tectonic economic shift" that promises to alter the way global business and geopolitics are conducted for years to come.

It has been said that India & China form complementary links, rather than competing links, in many companies' disassembly lines. Using the two developing nations together is a powerful, almost irresistible tool for Western companies trying to ratchet down their costs and speed up production cycles.

Despite the alarm that China and India have often caused in the West- particularly in America, and to some extent Australia,- because of lost manufacturing jobs and off shored white-collared jobs, it is actually American, Australian and European companies that have been the prime beneficiaries from the rise of both countries.

India and China are not just changing the face of manufacturing, they are also redefining consumer marketing by multi-national companies, which has always targeted the top 20% of income earners. However, it has been predicted that both India and China are about to change that.

The vast majority of the money in the Indian market is at the bottom of the income pyramid; because each is growing about three times as fast as the United States and Japan and far faster than Europe; India and China represent the unavoidable future for companies around the world.

As far back as 1834, Lord Macaulay had averred that: "If every Indian wore his shirt half an inch longer, the mills of Manchester would thrive forever"

Much has been made of Australia's supposed need to choose between its US ally and top trading partner, China, in a contested Asian future. The emergence of India makes Asia's power dynamics more complicated, but potentially more beneficial for Australia. Canberra and New Delhi are discovering a great convergence of their security and economic interests. Both are concerned about the strategic impact of a powerful China. They cherish their shared democratic values and defy the jihadist enemies of the open society.

Their endowments are a perfect match: Australia has huge mineral deposits and a developed, stable economy, while India has exceptional human capital and massive demand for energy and resources. Australian exports to India are growing at 20% a year. Yet, despite the efforts of some talented diplomats, Australia-India relations keep falling short of their vast potential. Controversies about student welfare and until recently, Australia's refusal of uranium exports to India point to deep problems of misperception in what should be a natural partnership.

The critical question is whether the two nations can now build trust, relevance and mutual understanding needed for a truly strategic relationship, the kind where each reinforces the other's interests in a changing world. This basic question would drive a major dialogue where the two countries could talk candidly through challenges in the relationship and look for ideas to shift it to a new plane.

For India, energy security is central. India will need to increase its total energy use many times over to keep developing and lifting hundreds of millions to lives of opportunity and dignity. Nuclear energy is only part of this picture. A much bigger practical contribution will be Australian exports of coal and gas, as well as mining and infrastructure investments in both directions.

Nevertheless, Australia needs to get serious about lifting its ban on selling uranium to India for electricity generation. Australia is now the world's only big nuclear supplier that refuses even to consider exports to India, even though it helped the US change the global rules to let any such sales proceed legally. Canberra recognises New Delhi's record of not spreading nuclear weapons technology, something that cannot be said about Beijing, an Australian uranium customer.

India many not need Australian uranium for many years, but the ban was read in New Delhi as a signal of distrust. It is not in New Delhi's interests to hold back on engagement with Australia, notably in defence, security, and intelligence. It is time for both powers to steam ahead with serious maritime security co-operation. They should strengthen and raise the level of naval engagement in the Indian Ocean region and in their Southeast Asian neighbourhood.

As China's interests and naval reach continue to expand, and as transnational seaborne challenges like piracy and people- smuggling persist, it makes sense for the Australian and Indian navies to work together. The two are well-placed to lead in building a rules-based maritime order in the Indian Ocean as well as to support one in the South China Sea. This will be especially necessary if disturbing incidents of Chinese assertiveness continue.

On the wide canvas of Indo-Pacific Asia, Australia and India need to work together to use emerging multilateral forums such as the East Asia Summit to mutual advantage. But first they will need the pillars of strong institutions of bilateral diplomacy. It is time to drop old habits of misperception and build a partnership for the Asian century.