China, India set to be leading powers by 2025: US intelligence

C hina and India are likely to emerge atop a multipolar international system as the US economic and political clout declines over the
next two decades, according to US intelligence agencies projections.

Not only will new players — Brazil, Russia, India and China — have a seat at the international high table, they will bring new stakes and rules of the game, said the National Intelligence Council analysis "Global Trends 2025- A Transformed World" released on Thursday.

The whole international system, as constructed following the Second World War, will be revolutionised, said the report based on a global survey of experts and trends by US intelligence analysts.

It was timed to be ready for the incoming administration of US President-elect Barack Obama, who takes office Jan 20.

Although the rise of no other state can equal the impact of the rise of such populous states as China and India, other countries with potentially high-performing economies could play increasingly important roles on the world stage, the report said.

For example Iran, Indonesia, and Turkey could do so especially for establishing new patterns in the Muslim world.

But for Russia, remaining in the top tier where it has been since its remarkable resurgence during the late 1990s and early part of the 21st century may be extremely difficult, it said.

Describing the current financial crisis on Wall Street as the beginning of a global economic rebalancing, it said the US dollar's role as the major world currency will weaken to the point where it becomes a "first among equals."

The world of the near future will be subject to an increased likelihood of conflict over scarce resources, including food and water, and will be haunted by the persistence of rogue states and terrorist groups with greater access to nuclear weapons, the report said.

"Although we believe chances are good that China and India will continue to rise, their ascent is not guaranteed and will require overcoming high economic and social hurdles."

"Because of this, both countries are likely to remain inwardly focused and per capita wealth will lag substantially behind Western economies throughout the period to 2025 and beyond," it added.

Individuals in these emerging economic powerhouses are likely to feel still poor in relation to Westerners even though their collective GDP increasingly will outdistance those of individual Western states, the report said.

Few countries are poised to have more impact on the world over the next 15-20 years than China, it said, it
said.

"If current trends persist, by 2025 China will have the world's second largest economy and will be a leading military power. It could also be the largest importer of natural resources and an even greater polluter than it is now."

Owing to the large populations and expansive landmasses of the new powers like India and China, another constellation of powerhouses is unlikely to erupt on the world scene over the next decade or two, the report said.

However, up-and coming developing states could account for an increasing proportion of the world's economic growth by 2025.

"The international system, will be almost unrecognizable by 2025, owing to the rise of emerging powers, a globalising economy, an historic transfer of wealth from West to East, and the growing influence of non-state actors," the report said.

"Although the United States is likely to remain the single most powerful actor, the United States' relative strength-even in the military realm, will decline and US leverage will become more strained," it said.

"Strategic rivalries are most likely to revolve around trade, investments and technological innovation and acquisition, but we cannot rule out a 19th century-like scenario of arms races, territorial expansion and military rivalries," the report said.