- Mohammed Saqib
As digitalization and financial inclusion gain momentum in emerging economies, India and China are attracting more attention as two of the largest and fastest-growing economies in the world. This is because they have made remarkable strides in technology and financial services, which render them well-placed to drive change across the Global South. They could transform emerging markets by bridging the digital divide due to a lack of access to finance through cooperation.
Digital Infrastructure
Collaboration between India and China can make a difference in many things, including technological infrastructures, as far as this one aspect is concerned. The Belt and Road Initiative (BRI) has seen large amounts of money being pumped into Asia’s digital infrastructure; similarly, Digital India has shown how nationwide digital strategies can change entire countries. Working together, these two countries could foster quicker access to high-speed broadband networks, 5G systems, etc., for use within the Global South. Consequently, more areas may be linked, breaking down contemporary barriers that impede economic growth from happening faster than it should while ensuring social upliftment. Similarly, other developing countries could emulate such projects if supported by joint ventures between India and China.
Financial Inclusion
India and China developed innovative approaches that can be replicated elsewhere among other developing nations when addressing concerns about financial inclusion. One example is the Unified Payments Interface (UPI) developed by India or Alipay/ WeChat Pay (APWP), two Chinese payment giants that facilitate digital cashless transactions.Also available are Alipay or WeChat Pay-like mobile payments through UPI, allowing over 3 billion monthly bank transfers and a billion users each for Alipay’s and WeChat Pay’s mobile payment platforms.
By creating digital payment systems like India’s UPI or China’s Alipay and WeChat Pay and sharing their fintech innovations and financial education programs, India and China can help third-world countries bypass the usual banking infrastructure process. In such a system, millions of people without bank accounts could participate in the economy. Strong fintech ecosystems like those in India and China can enhance access to finance among developing countries. For instance, with the Jan Dhan Yojana in India, 430 million bank accounts have been opened for poor people who cannot reach banks. Similarly, financial inclusion has improved significantly in Kenya due to the M-Pesa mobile money platform, which serves up to 40 million users. Ant Group of China has developed relevant microcredit solutions, amongst other things, with conditions similar to those in other emerging economies. Therefore, initiatives such as these, supported by collaboration between India and China, should also be adopted by other developing nations.
Digital and Financial Literacy
To make effective use of fintech, digital and financial literacy is important. To develop digital technology and finance skills in the developing economy, India and China could join forces in establishing training programs and educational initiatives. Financial literacy programs launched by the Reserve Bank of India (RBI) and the People’s Bank of China (PBOC) are an experience many countries can learn from. For example, RBI’s centres for financial literacy teach banking services, savings, and credit facilities, among other things. At the same time, India might share her experience with the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), which aims to provide skill training to millions of young persons and engage them in such activities. Furthermore, in China, vocational training programs for different technical specialities exist. An excellent case here is Luban Workshops across Africa.
The cooperation between India and China offers broad opportunities to reshape technological and financial landscapes in many countries across the Global South as the world gets more digitalised daily. Pooling resources in technology and finance will facilitate digital transformation and promote inclusive growth in Global South nations.. Already, China has made huge strides towards setting up new digital infrastructures across Asia & Africa with –the expansive Belt-Road Initiative. On the other hand, the Digital India campaign spearheaded by UPI-based revolutionary financial inclusion initiatives suggests how potent nationwide broad-based digitisation campaigns can be.
This cooperation will bring many advantages through improved digital connectivity, enhancing access to education, healthcare services, and government services, and bridging urban-rural divides. Digital channels for expanding financial inclusion empower unbanked individuals to participate fully in the formal economy while accessing important financial services.
However, despite infrastructure gaps, differences in regulatory environments, and cultural obstacles to technology adoption, fruitful cooperation between India and China in the digital realm could bring huge rewards. This collaboration can be a successful model of south-south cooperation for the 21st century. It exemplifies how emerging economies can use their unique experiences and innovations to aid development in other parts of the Global South, thus possibly redefining typical paradigms on traditional international development assistance.
This partnership may also reshape the geopolitical landscape by fostering greater understanding and collaboration between India and China. Despite having had uneasy relations over the years, productive cooperation within this area is a foundation for future joint initiatives across diverse sectors that promote regional stability and prosperity.
The success of this initiative could set a new standard for international cooperation, showcasing the power of shared expertise and resources in addressing global development challenges. Also, through collaborative efforts between India and China, there is still hope to usher in an era characterised by sustainability, equality and inclusiveness.
[ Mohammed Saqib is convenor, COGGS and Secretary General of India China Economic & Cultural Council ]
References.
African Union (2020). Digital Transformation Strategy for Africa (2020-2030).
ADB (2021). Asian Development Bank Annual Report.
China Daily (2021). Luban Workshops in Africa.
Government of India (2021). Pradhan Mantri Jan Dhan Yojana.
GSMA (2021). State of the Industry Report on Mobile Money.
Hillman, J. E. (2020). The Emperor’s New Road: China and the Project of the Century.
India, MEA (2020). India-Kenya Joint Statement.
NPCI (2021). Unified Payments Interface (UPI) Statistics.
RBI (2021). Financial Literacy Initiatives.
Reuters (2020). Ant Financials’ Microcredit Solutions.
TechNode (2021). Alipay and WeChat Pay User Statistics.
UIDAI (2021). Aadhaar Overview.
World Bank (2018). Global Findex Database 2017.
Xinhua (2020). China’s Health Code System During COVID-19 Pandemic.
