This is taken from Bubbles and Wisdom: co-written by Michael Baxter editor and founder of Investment and Business News .

When people consider the question of China and India they often ask, why? Why are these countries doing so well? But that is the wrong question.

Until the Industrial Revolution, China and India had always been the two richest countries in the world – so, rather than ask why are these countries growing so rapidly, it might be more pertinent to ask why did they lose their number one and two spots? It seems that the partial answer to that has got a lot to do with failure, or to be precise, lack of failure.

It’s a curious thing, but when we talk about Egypt in the time of the Pharaohs, or the emergence of the Sumerians in the Fertile Crescent, we use the general description: Ancient History. In truth though, Tutankhamen and his chums lived comparatively recently. There are surely no more than, say, 300 generations separating us from that time in history when the pyramids with which we are so familiar were built. In evolutionary terms, that was hardly any time at all.

As far as we know, the first civilizations started quite independently of each other in India’s Indus Valley, the Fertile Crescent, Mesopotamia – or as it is called today, Iraq – Egypt, beside the Nile, and China.

Now consider the geography of those four locations. China and India are huge countries, but are ultimately cut off from the rest of the world – cut off by mountain ranges and vast expanses of relatively empty land, including desert. In fact, the Indus Valley is to the west of the majority of India, and sits in what we now call Pakistan. India itself was even more cut off from Europe and China.

When Alexander attempted his conquest of India, he barely moved past the borders of modern day Pakistan, and the land of India seemed somehow impassable and unreachable.

But it seems likely that Egypt and Iraq were close enough to be able to feed off each other. Look at a map of the region – it is surely no coincidence that the next major civilizations were in Turkey, with the Hittites kind of up a bit and in the middle of Egypt and Iraq, and Crete just a little to the north of Egypt.

Later we saw the emergence of the Assyrians, the Medes and then the Persians to the east; and to the west, Greece, the Phoenician lands, including Carthage, and then Rome.

That great, almost landlocked sea, the Mediterranean, promoted trade and the flow of ideas.

Civilization expanded in India and China also, and by the time of the Roman Empire, China too had its first empire, its first emperor, not to mention its Forbidden City and the Terracotta Army.

Time moved on, and technological progress continued unabated. In Ancient Greece and Persia, and later in Rome, technology and new ideas generated a golden age of learning, but then that happened in China and India too.

And while in Europe we suffered from the Dark Ages, and North Africa and the Middle East became the protector of Western learning, India and China enjoyed relative stability. China enjoyed gunpowder, paper, and even the printing press, long before the Europeans.

But it seems that around the time of the European Renaissance, China and India came to a relative halt. It was as if they had grown to their limits. China was invaded and conquered from time to time, the Manchu Dynasty, for example, or even earlier, Genghis Khan, but these invaders were absorbed. Instead of changing China, China changed them – they became Sinofied.

In many ways the Great Wall is a symbol of this. Until the Europeans found this wall, the Chinese didn’t give it much thought – it was only when they saw the look of wonder in their visitors’ eyes that they really considered the symbolism of this monument to industriousness.

The Great Wall: the only man made object you can see from space – well, actually, that is not true; the sprawling landmark Neil Armstrong thought was the Great Wall was in fact clouds.

The Great Wall itself was enormously expensive, and not at all effective. But it does symbolise an aspect of China – the fact that ideas didn’t flow in, and neither did they flow out.

By contrast, Europe found itself on the receiving end of wave upon wave of a kind of creative destruction. Spain and Portugal’s domination was followed by the growing power of France.

In some ways, Britain enjoyed the same advantages that had benefited the Hittites and the Greeks a few thousand years earlier. It was sufficiently isolated from the great powers of that day to be afforded relative safety, but sufficiently close to enjoy the benefits of trade.

Ultimately, the centre of power shifted to the United States, and this time it was waves of immigration – actually, Britain too had benefited from immigration – that led to new ideas, rapidly replaced by yet more new ideas – creative destruction on a scale never before seen.

It seems that the West’s success resided in failure – the successive failures of Sumer, Egypt, Babylon, Greece, Rome, North Africa, Spain, Portugal, France and Britain. Each failure occurred because a new force emerged, built on the ashes of the previous power.

Jared Diamond, author of, Guns Germs and Steel, once pointed out that, around 1500, the Chinese navy dwarfed the combined European navies. All it took, however, was for one decision by the emperor to reduce investment into its ships; China lost its naval might and, in the process, Europe expanded without rivalry. But in Europe, if one leader had chosen to disband the nation’s navy, it would have made no difference overall, as other European powers would surely have filled the gap. China was one, Europe was many. Individual European powers could fail, and did, but Europe became stronger as a result. China just did not evolve. There was only one system, one government, which only failed the once, and when it did it was a kind of super failure.

It was tragic, but it was inevitable.

The Chinese are proud of their history. They like to remind the major powers of the West how recent our civilization is. But they may be wrong. Western civilization is not new, it is perhaps even more ancient than Chinese civilization, and has its roots in Ancient Sumer. But Western civilization evolved thanks to regular bouts of creative destruction.

Today, India and China are growing because they have joined the rest of the world. They shed the shackles of tradition and learnt to welcome new ideas, rather than dismiss Western culture and technology as barbaric. And right now they are learning from the West, incorporating Western knowledge of technology and management in order to grow. But sooner, rather than later, we will see a new mix of old Chinese and Indian ideas stirred in with Western technology and the next stage will begin.

Does that mean that, in turn, complete Western failure is inevitable? Not necessarily. It depends on how much we are willing to fail in small ways, to adjust to the new order by replacing the old.

Only if we refuse to change, resist the force of creative destruction, will the US and Europe enter the history books as yesterday’s powers.

For the next China piece see Why China’s real opportunity gets overlooked: the parallel with Japan

For more:  see See: Truth or myth, free trading yuan is answer to our ills