THE EMERGENCE OF CHINA AND INDIA IN THE 21ST CENTURY

The emergence of China and India in the 21st century

The emergence of China and India in the 21st century

China and India as Emerging Market

China and India has quickly become two of the most vitally emerging countries as the global giants. Whatever happens in these countries, does eventually affects the entire world. They have influenced the world starting from political relations to environmental issues to global commerce. Yet, neither of the country has been well-understood by the Western world. (Alvin, 2005, 98-200)

The most obvious one is the degree to which the government is involved in the economy. In China, it is extremely extensive. In India, historically we have been quite interventionist, but post-1991, the government has begun to withdraw gradually, but steadily, from the economy. (Sheridan, Michael, 2009, 12)

In China also that is true to some extent. But if you compare the two countries, in China government intervention is very high. Only recently has China legally embraced private entrepreneurship. Until recently, private entrepreneurs were not a legitimate class of people. I think it's going to take a while for domestic private entrepreneurship to be significant.

The other difference is the extent to which the two countries have embraced foreign investment. The numbers are well known. China has a lot of foreign direct investment, most of which comes from overseas Chinese. India has very little foreign direct investment even after the current boom in investment.

Histories and government policies that have been introduced over the last three decades: India and China

Chinese civilization has originated in different regional centres along the Yangtze River and Yellow river in Neolithic period. The Yellow River is considered to be support of Chinese Civilization. Although there have been some evidence of the existence of Xia Dynasty before Shang Dynasty.(Wang, 2003, 107-109)

The economic reforms were initiated from 1978 brought steady growth to the country. Since 1978, numerous people have been lit out of the crisis of poverty; bring the poverty rate of China 51 percent down in 2005. During the revolution of 1949, the economic system of China was turned into a communist system. But many scholars say that from 1980's China is an example of State-capitalism. As the role of China in global trade has increased, it importance in international economy has also grown. The growth has been a result of both the infrastructure of heavy industries and the expansions of private sectors in light industry. By 2008, government announced the expansion of public sector. In 2010, there were approximately 10 million small businesses in China.

The democratic policies were governed by the India's economy from 1947-1991. It has been characterized by protectionism, pervasive corruption, slow growth, public ownership and extensive regulation. The economic liberalisation continued from 1991. There was a revival of economic policies and reforms in the early 21st century. From there, India's economy is continuously growing at a faster rate.

However, due to financial crisis in 2007 to 2010, GDP of India significantly dropped ...