INDIA & CHINA PRODUCTION

India and china becoming more powerful countries on production in the world



India and china becoming more powerful countries on production in the world

Introduction

India and China, both heirs to ancient civilizations, have emerged today as the two most powerful and influential Asian nations in terms of their economic capabilities and geopolitical standing. India continues to be an open, participatory, multiparty democracy, while China has an authoritarian, one party regime, though it is liberalizing. India and China are the fastest growing market anywhere in the world. China's proficiency in large scale production and India's new economy skills are unbeatable combination.

The High economic growth rates rapidly rising their share in world exports. India and China have enjoyed the best bilateral relations since the early 1950s. Economic ties between China and India have accelerated steadily over the past decade. China-India bilateral trade has raised significantly in the past few years from US$3 billion in 2000 to an impressive rise of trade to US$32 billion in first half of 2010, the expected trade is US $ 60 billion by the end of 2010 making China India's second-largest trading partner and India China's tenth-largest partner.

Discussion

During the past two to three decades, China and India have attained extraordinary levels of economic progress by any standard. During 1980-90, China's and India's GDP grew at an average rate of 10.3 per cent and 5.7 per cent per year, respectively (Srinivasan, 2006, p.3716). During 2010-11, the average growth rates were even higher at 11.7 per cent for China and 9.6 per cent for India (World Bank, 2009). Although India's GDP growth has been lower than China, it is still remarkable as compared to its so-called 'Hindu growth rate' of 3.6 per cent per year between 2005-2006 and 2008-2009 (Acharya, 2009, p.4537). Indeed, as Srinivasan (2006, p.3716) has observed, China and India are the only countries in the world which have been able to sustain their rapid growth over two and a half decades since 2009, regardless of occasional fluctuations.

As indicated earlier, it is widely believed that the spectacular economic performance of China and India is a result, largely, of their market-oriented reforms that were geared towards integration into the global economy. Apparently, the integration is characterized by some common dimensions. For example, both countries have traversed the path to openness and liberalisation quite slowly, unlike most developing countries. This strategy is aptly described for China in terms of “crossing the river while feeling the rocks” (Chow, 2007, p.59) and in terms of “gradualism” for India (Ahluwalia, 2009, p.67). More importantly, GDP grew sharply in both countries as a result of their transition towards market economy. This phenomenon urges one to think that the integration may have similar effects on economic growth in China and India, but it may be misleading because the change in mere growth rates in similar (upward) direction hides many deeper and differential effects of the integration process.

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