China is now the world’s second-largest economy, surpassing Japan. But while China sets its sights on the number one position, it might want to look behind itself, too: India is formidable competition. With one exchange traded fund (ETF), you can play both.

China’s ascendancy to the top position isn’t a foregone conclusion. Just two decades ago, Japan was seen as the main rival to the United States. But India’s growth is on track to outpace China’s growth in less than three years.

The Economist explains that in the short-term their other foreign relationships may matter more, even in Asia: there may, for instance, be a greater risk of conflict between rising China and an aging but still powerful Japan. Western powers still wield considerable influence, too. [How China And India ETFs Grapple With Ghosts.]

China and India may have the largest hurdle of all to come to a head: a serious effort to solve their own disagreements is a good place to start. [India ETFs Change Course.]

The Economist also points out that there are opportunities for greater cooperation between the two economies, given their economic strengths (manufacturing in China and services in India). Two-way trade is thriving – it will be more than $60 billion this year, up from $270 million just 20 years ago. [China’s Shift to Domestic Consumption.]

The main points to watch during the growth is China’s political reform against the economic change as well as India’s economic price for its democracy. China has the means and the money to pull through and help the rest of the world, however, India may not have any answers to the growing economic problem plaguing the globe.

The race is anyone’s to win right now. If you can’t decide on one economy, why not play both and let them sort out the rest?

  • First Trust ISE Chindia (NYSEArca: FNI): FNI tracks an index of 50 ADRs of companies domiciled in China or India. Information technology is 29.4% of the fund; financials are 22.7%. Other sectors include telecommunications, energy and industrials. The fund has an expense ratio of 0.60%.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.