Daily Balajisms – China is 10x Germany and India is 10x Israel

China plays the best home game, while India plays the best away game.

Balaji Srinivasan recently said that he sees China as 10x Germany and India as 10x Israel. China is the industrial powerhouse of our era which became quite militaristic in the last ten years, breaking away from the “harmonious rise” vibes of Hu Jintao.

This in turn creates a reverse bandwagon effect, where the US and China’s neighbors are becoming more antagonistic and zero-sum towards China. This negatively effects the Chinese diaspora, like Chinese students and researchers at the US universities, who have harder time to get visas.

While Chinese diaspora is in retreat, this represents the opportunity for Indian diaspora – to negotiate better visa deals with various countries and better integrate into global tech ecosystems.    

India has relatively small diaspora of 7 million highly skilled people living in the West, who emigrated to escape dysfunctional socialist policies of India prior to 1991. Balaji sees them as the advance scouts. Many Indians abroad did very well as doctors, journalists, CEOs of large companies and even politicians.

Balaji has a conservative estimate that in the next twenty years the Indian diaspora will grow 10x to 70 million and this will have profound implications to the West. India will become a media superpower – creating globally competitive feature movies with AI.

This doesn’t mean that Bollywood will become more popular, but rather AI will enable Indians to produce globally competitive media content and disrupt Hollywood. In the same way as a chair produced in China is a globally accepted and competitive chair – not a chair with Chinese characteristics. Even in today’s Hollywood, Indians do lots of work behind the scenes, like animation and graphics.

Like Israel, India is heavy on software and a startup nation, with the third highest number of tech unicorns behind China and the US. India also faces similar security challenges as Israel and is also somewhat close politically, as both countries are democracies and perceived to be center-right.

Balaji explains how the political axes from the Cold War era got reversed – a part of his thesis that history is running in reverse. In the last century the Reagan’s America was perceived to be center-right, while the USSR was the most economically leftist power. Now the US is the farthest culturally leftist power – so even the EU is to the right of US on cultural issues.

India is the biggest democracy, and in the case of a profound economic crisis or a collapse in the US, that might be coming in few months or years, we might see India as the next torch-bearer of the free world.

Balaji thinks that China plays the best home game, while India plays the best away game – having a successful and culturally influential diaspora. Both countries are part of the ascending world after a chaotic last century. If the last century was about the US vs USSR, this century will be about Internet & India vs China. Decentralization versus centralization.