During the past decade, much attention has been paid to the growing influence of China and India in the global economy. These fast-developing economies attract investments from all over the world and are believed to occupy a prominent place in contemporary business and production (Palit, 2013). However, despite the similarities between these emerging economies, they seem to move different paths. China is more integrated and outward-looking, while India demonstrates more independent and liberalized approach to its economic growth. In this essay, I try to compare and contrast these two economies to understand their similarities and differences and their possible influence on the global economy in the following decades.
Let me begin with characterizing the economy of China. Since 1978, the country has moved from heavily-regulated to market-based economy, which allowed it to enjoy the rapid economic, social, and cultural development (The World Bank, 2017). Due to intensive reforms, China has demonstrated the impressive GDP growth for several consecutive decades and contributed much to the global economic development (Scutt, 2017). As a result, any significant crises or policy changes in China affect other countries, just like the U.S. economic policies shape the world economy.
Compared to China, India’ influence on the global scale is much more moderate. As noted by Ghosh (2016), India’s GDP accounts for only 2% of the world’s share, which means that it has not yet achieved the level of development needed for such a large country. Similar to China, India has initiated fundamental policy changes directed at attracting investment and developing its major industries. However, unlike China’s economy that is heavily regulated by the government, Indian authorities introduced liberalization measures to let the economy develop freely (Ghosh, 2016). This decision has resulted in many international corporations entering the Indian market and bringing large investments. Similar to China, India is not satisfied with its status of the cheap labor market and invests in the development of technological capabilities.
India and China also have similar problems associated with the fast development of their economies. These include high social inequality, fast urbanization, and environmental issues (The World Bank, 2017). Economic growth spurred consumption among the middle and upper classes, which naturally contributed to higher GDP; yet, it made the social gap even more apparent and intensified the tensions within these states (Ghosh, 2016). Building of the plants and increased fossil fuels use, in turn, have resulted in increased environmental pollution, which has not been adequately addressed yet, neither on the legislative nor on the companies’ levels. It is still not clear how both countries will adjust to their new roles in the global economy, as they need to combine comprehensive state policies with innovative business solutions to achieve sustainable growth.
To conclude, China and India have both demonstrated impressive growth during the past decades. Although these countries have somewhat different approaches to economic development and certainly different scopes of influence, they share some common characteristics, such as the need to move from the cheap workforce status and the necessity of developing innovative technologies and business approaches. China and India are the most densely-populated countries in the world, so their success or failure to address the remaining challenges in the following years will undoubtedly affect the global economy.
This essay titled Economical giants: China and India essay explores similarities and differences between the countries in terms of economic development. Please note that this is a compare and contrast essay sample, so it may be used for reference only. If you want to order the similar paper, use our academic writing services. Our writers will do their best to meet your demanding requirements and create excellent papers.
Ghosh, J. (2016). India’s impact on the world economy is still tiny. The New York Times. Retrieved from https://www.nytimes.com/roomfordebate/2012/05/11/have-the-bric-nations-lost-their-momentum/indias-impact-on-the-world-economy-is-still-tiny
Palit, A. (2013). China-India economics: Challenges, competition and collaboration. London: Routledge.
Scutt, D. (2017). The Chinese economy is growing faster than all expectations. Business Insider. Retrieved from http://www.businessinsider.com/china-gdp-growth-june-2017-7
The World Bank. (2017). Overview. Retrieved from http://www.worldbank.org/en/country/china/overview