A top Obama Administration nominee in the Department of Commerce has told American lawmakers that the US has no other option but to work in close association with India and China because of their growing economic clout.
"We are obliged to deal with India because of the resources that the Indian economy is putting behind, because they want a certain level of economic excellence and economic primacy as well," Dennis Hightower, the Obama nominee for Deputy Secretary of Commerce, told the Senate's Commerce, Science and Transportation Committee in his confirmation hearing.
"So unless we begin to understand how those two countries (India and China) function, how they think about global economic development, we are going to have an issue that is not going to have the outcome that we want," he said.
"I would say one of my early priorities certainly, upon confirmation, would be to look at, one, the trade issues, and two, how do we then use the leverage of the classic innovation and some of the new technology that we have and can bring to bear to change the dynamic that currently exists with those countries?" Hightower said in response to a question.
Referring to his recent experience and travel to India, Hightower said most of the projections that he has read and have been a part of providing data for, in the next 25 years over 60 per cent of all consumer spending is going to occur between China and India.
"So to the extent that we understand that China, with roughly 25 to 26 per cent of our current debt, has to be more of a spender as opposed to an investor, I think this will go a long way," he argued.
"I think the emphasis and the effort directed in that regard will have handsome payoff to the extent that we have a focused strategy. India likewise, because of their commitment to the technology and the excellence -- because, as I have been in India and you look at what is happening there in Bangalore, as I mentioned, these young people are not coming to the United States anymore to study, as their fathers might have done at MIT, Caltech, Rensselaer and some of the other premier science and engineering schools," Hightower said.
"They're being educated by the Indian Institutes of Technology. So they are reinvesting in their own people in those countries. So they have -- when you look at the sale of Jaguar and Land Rover to Tata, Tata now will become one of the largest automotive manufacturers in the world. So we are obliged to deal not only with Tata," Hightower said.
In his opening remarks, Hightower said countries such as Brazil, Russia, India and China -- often referred to as the BRIC countries -- are now employing aggressive industrial policies reminiscent of Japan's strategic commitment to the electronics industry in the 1960s.
