Rivals: how the power struggle between China, India and Japan will shape our next decade

"Asia is going to carry on getting richer and stronger, probably for a long time to come," says Bill Emmott, a former editor of The Economist. Both India and China may treble their economic output by 2025. Indeed, by the late 2020s, China could overtake America as the world's largest economy, while India, contrary to popular belief, is no longer simply "the world's back office".

These days, India's economic structure is beginning to resemble earlier developers, such as Japan, South Korea and China. Private investment has soared across the board and manufacturing is now growing faster than services, as the emergence of the Tata Nano, the world's cheapest car, highlights. Japan is beset by an ageing population and political paralysis, but this is "unlikely to be permanent". Huge public debts and competition from China are liable to engender further reforms and higher productivity. Japan's next ten years will not be as dismal as the last.

But Asia's gathering strength is not merely going to cause tension between East and West, says Emmott. This is the first time that there have been three powerful states China, India and Japan in Asia at the same time. The situation resembles the balance-of-power politics of nineteenth-century Europe. That "might not matter if they liked each other, or were somehow naturally compatible. But they do not and are not. Far from it, in fact".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Indeed, their interests increasingly clash, with China expanding its presence across the Indian Ocean as it seeks resources and India looking eastwards for allies and markets. A conversation Emmott had with a senior Indian official hints at the forthcoming rivalry: "The thing you have to understand is that both of us [China and India] think that the future belongs to us. We can't both be right".

Japan feels especially threatened by China's ascendancy. Tensions are mounting in Taiwan, the Korean peninsula, and Tibet, which are all potential flashpoints that could lead to conflict. Managing this new Asian rivalry is one of this century's "most important tasks". In his final chapter, Emmott outlines nine ways governments and world authorities should approach the issue.

Rivals is "remarkable for the clarity of its economic and historical analysis and the cogency of its arguments", says the FT's Victor Mallett, while, according to Publishers Weekly, this "stimulating" book, "will be indispensable to anyone interested in where these countries are headed and where they might take us".

Rivals: How the Power Struggle Between China, India and Japan Will Shape Our Next Decade is published by Allen Lane.