Asian Drivers
Complementary
and Competitive Effects
The impact of China and India on other economies may involve a
combination of complementary and competitive effects.
Complementary effects
Complementary effects lead to win-win outcomes. Gains reaped by Asian
Driver actors are also felt by local actors, although these may be
different in nature.
For example, focusing on the trade channel and Africa:
- Consumers in Africa may gain from the low prices of
manufactures imported from China
- African garment exporters to the US gain from using cheap
and high quality fabrics imported from India
- African commodity exporters may gain from the high prices
realised on the back of enhanced demand from China and India
- African agricultural producers may gain from the future
demand for food imports by the Asian Drivers.
Competitive effects
In other cases, the rise of the Asian Drivers may be at the cost of
other economies, a win-lose outcome. For example:
- Producers of manufactures (workers and owners) may lose out
to competition from low cost imports from China; they may also lose out
when trying to compete in foreign markets
- Local and Western construction firms may be squeezed out by
competitive Chinese construction firms
- Persecuted minorities and human rights activists may lose a
source of protection when China’s conditionality-free aid allows
majorities or despotic governments to ignore external pressures for
good governance.