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How America, Europe and India Fell Behind China in Manufacturing Technologies

A bit of history will show us what happens when a society or country falls behind. During the period 1600 onwards Britain was emerging as a maritime power after its defeat of the Spanish Armada in 1588. The British East India Company was formed in 1600 after a petition by merchants to Queen Elizabeth to form a joint stock company to trade with the East Indies. Very quickly this was followed in 1602 by the Dutch government pulling together different trading companies into one Dutch East India Company. By 1518 the Portuguese had already begun trade with India in silk cotton and other goods and acquired a base in Ceylon's coast. Trade was conducted by the Portuguese, Dutch and British under naval power using ships manned with 30-70 guns operating in squadrons. Here Sri Lanka or Ceylon offers a smaller example of what unfolded all across of Asia including first Indonesia, then India and then China in 1500-1900. 

In 1518 the Portuguese made a trading agreement with the king that allowed them to build a fort at Colombo, Sri Lanka, and won trading concessions. Eventually through the practice of offering protection to kingdoms within Sri Lanka the Portuguese acquired a monopoly of trade in cinnamon, pepper and other agricultural products that was to last till the Dutch acquired the monopoly in 1658 by simply pushing out the Portuguese from their forts on the coast. The Dutch monopoly on cinnamon and other agricultural products run on a commercial basis as part of the larger Batavian enterprise based in Java today's Indonesia continued till the British pushed out the Dutch and made Sri Lanka a crown colony in 1802. This was confirmed by the Treaty of Amiens with the French under Napoleon who controlled the Netherlands during the Revolutionary Wars. The British introduced coffee and after the coffee plantations failed due to disease, these were replaced with tea plantations. Tea, coconut and rubber were added to trade in cinnamon by the British.

It is not to be taken lightly. A determined country or people can gain a technological advantage over time even if it is starting from behind or way behind. Eventually to be so far ahead that it could by means of trade set its own rules and gain a major share of the benefits of trade to the exclusion of others. 

This brief digression serves to show how trade patterns and improvements in naval and other technology in one part of the world led to huge consequences for societies and countries in Asia that failed to take action and reorganize early and with determination their societies, administration, trade and naval power.  Falling behind is not a choice to be taken lightly, or allowed to happen carelessly or because of internal fragmentation of societies in the manner of the kingdoms that sought protection all across South and East Asia first from the Portuguese, then the Dutch and then the British. This meant the eventual loss of a society or country's economic, political and individual freedom to foreign powers.

Over four decades 1980-2020 the process that is unfolding today shows the U.S., most of Europe other than Germany, and India surrendering manufacturing power and with it trade and all the wealth and benefits it brings to China. The coronavirus could have damaged the economy in the U.S., in Europe and particularly  India to such an extent that it would have entrenched this loss of manufacturing without a necessary response of supply chain renewal to regain manufacturing, trade benefits and its wealth lost over three decades. 

Thus far we have used the island nation just south of India along trade routes because it serves as a microcosm of what happened afterwards, as early as 1505 when Lourenco de Almeida of Portugal  was pushed by strong winds to Ceylon. As Gandhi wrote in "Indian Home Rule" or "Hind Swaraj" on a steamship the Kildonan Castle, back to South Africa from London, 13-22 November 1909, in Gujarati- the Foreign Powers were invited to India. This happened in Ceylon as early as 1543 when the Portuguese in return or protection for the kingdom of Kotte under Buvanaika Bahu from neighboring kingdoms were granted privileges for trade and a tribute in cinnamon. By 1580 his son Dharmapala had deeded  his kingdom to the Portuguese. This pattern was to be repeated in India after 1700, and later with some variation in China after 1800. From 1500 to 1700 foreign powers entered India through Afghanistan. After 1700 the British using naval power under the British East India Company, with the objective of trade and wealth that it brought, pushed these foreign powers out in India by supporting different kingdoms in the country that invited them in for protection against their neighboring kingdoms. This brought wealth to Britain and the Netherlands. Britain was able to fight the long war with France after the French Revolution 1793-1815 and succeed because of its naval power and the financial support of the British East India Company, showing how important a part trade and the wealth it brought played in events in Europe and America. Admiral Nelson with his squadron chased the French fleet for months in 1795 in the Mediterranean till he found it near Aboukir Bay, and immediately prepared for battle to destroy it with the single objective of keeping France and Napoleon out of India. This objective survives in a page on which Nelson wrote down his idea that Napoleon's objective was India and had captains of his squadron sign if they agreed (Roger Knight shows this in his book "Victory").

Gandhi says in "Hind Swaraj" 1909-

The English have not taken India; we have given it to them. They are not in India because of their strength but because we keep them. They came to our country originally for purposes of trade. Recall the Company Bahadur. Who made it Bahadur? They had not the slightest intent at that time of establishing a kingdom. Who assisted the company's officers? Who was tempted at the sight of their silver? History testifies that we did all this. In order to become rich all at once we welcomed the company's officers with open arms. We assisted them.

When our princes fought among themselves, they sought the assistance of Company Bahadur. That corporation was vested alike in commerce and war. It was unhampered by questions of morality. Its object was to increase its commerce and to make money. It accepted our assistance and increased the number of its warehouses. To protect the latter it employed an army which was utilized by us also. Is it not then useless to blame the English for what we did at that time. The Hindus and the Mahomedans were at daggers drawn. This too gave the Company its opportunity and thus we created the circumstances that gave the Company its control over India. Hence it is truer to say that we gave India to the English than that India was lost.

It is on this sense of taking responsibility and changing behaviours, creating an atmosphere of new learning for development, and building up the knowledge and experience of administration and democratic self rule that Gandhi took charge of India's future. During the worst phase of the coronavirus crisis in March Indian prime minister Modi started a nationwide television address announcing a unprecedented complete lockdown of the country by saying it was a choice of going back 21 years or doing what was needed for the next 21 days. The loss of three decades  after the opening in 1990 for the Indian economy to build its manufacturing base could have resulted in a loss of another 2 decades putting India 50 years back of other countries that had developed their manufacturing and technological base. Japan's invasion of China was possible in the 1930's only because European bases such as Tsingtao were transferred to Japan in 1919 and China's awakening came about 50 years after Japan's awakening by the 1880's. China in the 1930's lacked any unified determination to build up the country, and lack of technological capabilities. 

As this was happening in India, in the rest of the world Britain, to some extent France, most of Europe and the U.S. had neglected their manufacturing base, with the loss of tens of millions of jobs and vast amounts of wealth sent overseas, depressing economic conditions in once  thriving manufacturing towns and in rural areas, destroying the social cohesion that had once existed and fragmenting the countries economically, socially and politically. 

Today in 2020 the question remains how does a nation protect and expand trade, based today on manufacturing, to increase its wealth and advance its technological capabilities. How does a nation maintain the unified approach with determination to prevent the kind of fragmentation that has happened in the past in Asia, and also in other parts of the world. For Europe, America and India it is learning from the lessons of the past to restore its manufacturing power base, to conduct a renewal of its supply chains, to advance its technological capabilities and manufacturing to a point of leadership.