MELBOURNE: Australia should not be mesmerized by China’s growth and focus on India, “a sleeping giant”, former Prime Minister John Howard has said.
Howard said with the European Union crumbling down, it was affecting China and a focus on China would affect the Australian economy.
According to ‘Brisbane Times’ report on Thursday, Howard said that Australia should not be mesmerized by China’s growth and insisted that demographics pointed to “India as a sleeping giant”.
“China is growing very rapidly, but it does have two elephants in the room. The first elephant in the room that China has is demography; China will grow old before she grows rich.”
Howard, who was Australia’s prime minister from 1996-2007, said India’s population was younger and the stark contrast with China was “astonishing”.
“India’s population between the ages of 15 and 24 is the largest of that age cohort of any nation in the world,” he said, adding that age bracket included 230 million people, almost the population of Indonesia.
“It gives you an indication of the contrast between India and China as far as the age and therefore the potential vitality of the population,” he said.
Howard said China was the second largest economy in the world by virtue of its size, not by its capital wealth.
He said China’s ageing population would come at a cost.
“It will have to invest more and more in looking after her ageing population,” he said, insisting that Australia should focus on India.
He said China’s economy was in “better shape”, education levels were better and while its layers of bureaucracy were at times “bewildering”, the country remained an extremely valuable trade partner for Australia.
“The point I leave you with however is that if India can get her act together, because of the relative youthfulness of the population, it can make a big difference,” he further added.
China’s second “elephant in the room” was the difference was the communist nation’s attitude to “political liberation”, he added.
“My simple view is – and some people call it simple, but I think it is fundamentally correct – my theory is that the generation newly enriched by China’s extraordinary economic growth, will accept being told what to do politically,” he said.
“But the children of that generation will not. The children of that generation will take economic empowerment for granted and they will want a say in their own future,” he said.
He said he was optimistic about economic recovery in the United States, but less favorable about the euro-economy nations.
“I am not very optimistic about Europe. I thought that the Euro was a colossal mistake. It was sold to a group of European politicians, by what I call the European or Brussels elite, who are obsessed with implementing the ideal of some kind of supra-European state,” he said.
Howard said his doubts were founded on the fact that the region did not have a unifying fiscal system. Howard said without a central taxation system, he had doubts it would last into the future. -PTI
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