Washington ? China may win the sprint, but India will win the marathon, Kamal Nath says with a confident chuckle. This will become the Asian century, India’s minister of commerce and industry adds, but not in the ways many in America and Europe now assume. Or fear.

To which you are entitled to respond in unison: Well, he would say that, wouldn’t he? It’s his job. And right you would be. But right he may be as well.

The arguments Nath advances help illuminate blind spots in the growing strategic debate about how the world should react to the abrupt rise of China as a world power. Part of the answer to that question is: with greater calm.

The real subject of the debate should be the rise of Asia, not just China. The Middle Kingdom serves as a platform to bring together capital, cheap labor and industrial technology from throughout the region and ultimately the world. Hidden in plain sight is an innovative dispersed manufacturing system in Asia that underpins China’s rise to heights it has not known for centuries.

China may be in the process of building a great 20th century manufacturing empire that will gradually be weakened by internal change and conflict, as most empires are. The forces that will be decisive in the 21st century may eventually favor India, as Nath’s epigram suggests.

The two nuclear-armed Asian giants – who a few years ago were candidates to again go to war against each other – have become friendly economic rivals for energy supplies and foreign investment instead.

While China becomes the world’s manufacturing hub, India has set out to become “a global knowledge hub, with a central place in the transnational movement of knowledge and services,” Nath continues. India’s comparative advantage lies in its large and relatively young educated population. (About half of India’s 1.1 billion people are under 30.)

This is one reason Nath’s argument attracts me: It takes into account global demographic trends often ignored or glossed over because of the social and political dilemmas they create. Prime among these is the galloping aging of the population of advanced industrial societies that will not accept greater immigration flows to renew their labor forces.

“The answer is to move information and services, rather than people, across borders,” according to Nath. Shifting low-wage or knowledge-intensive jobs through new communications or other technology to areas where there are surpluses of educated and willing workers has been controversial, he acknowledges, but if such “outsourcing” decisions make economic sense, the savings they create will provide new jobs at home.

Such an approach might also avoid the staggering trade deficits that currently roil U.S.-Chinese relations in ways that, over time, will affect Beijing’s freedom to flood the world with cheap consumer goods.

While President Bush works to construct a wide-ranging strategic partnership with democratic India – Nath’s official visit here last week was part of a quickening stream of contacts between Washington and New Delhi – the administration hammers Beijing to revalue its currency on the theory that such a move will make Chinese goods more expensive and thus reduce the trade deficit.

But that ambition is likely to lead to new U.S. frustration. It misses the point of Asia’s “dispersed manufacturing” system, a term that comes from a talk given by a Chinese businessman to a recent Trilateral Commission meeting here. Only a revaluing of the Chinese currency of 25 percent or more – a huge, unlikely step – would raises prices enough to deter consumers abroad.

“The yarn for a shirt you think comes from China was perhaps shipped from Thailand to South Korea for processing while buttons came from the Philippines. Everything was stitched together in China and shipped from there,” the businessman said. “Revaluing, at any politically acceptable level, will not seriously change the final price.”

Or, as Nath puts it: “China sells what it can produce” at prices the communist government essentially controls. “India produces what it can sell” as a market economy, with a retail sector that grew 22 percent last year.

The straight-line projections that show China becoming a domineering Asian colossus have consistently overlooked not only India, but also Japan, another powerful Asian democracy and American partner. Both will have much to say in the shaping of an Asian century.