Question

Compare the growth successes and potentials of India and China. List the advantages and disadvantages of each. Which factors will be problems for India? For China? Search current information about these two countries and provide comprehensive responses that reflect insight into both countries. Make sure that the factors that you are using for comparative purposes can be applied to both countries.

Answer 1

Comparing the two south asian countries.i.e. India and China, lets begin with their geographic and demographic attributes. China as we know is the third largest country after Russia and Canada whereas India is one third of China's size. Population in China is greater than that of India but it is growing at a much faster pace in the latter which implies that it will overtake China by 2020.

In terms of political scenario, China is a communist country where market reforms are governed by free trade but a capitalist business model is practised wheres India is the world's largest democracy which had followed soviet union norms till 1980s but after libralisation, it is moving towards free trade and a capitalist model.

China is the third largest manufacturer after US and Japan whereas India still has a long way to go at 12th position according to Global Insight. India' s tax regime is more efficient compared to China. It is better off in terms of financial transparency ,better management practises unlike China which prefers its manufacturing sector over services sector.

Comparing their economic growths which is sustained by both in the past few years in the range of 8-10%; growth rate can be consumption driven or investment driven. India's investment share is higher than the industrialized world's share but for China, it is huge still there has been a gradual and slow paced growth beacuse of social and demographic changes.

In terms of market expansion, India has grown to be inclined towards expanding its service sector but avoiding other sectors has led to anarchaic vertical integration which leads to corruption. Comparatively, China is more efficient in its production practises at cheap labor and more efficient output is produced. It has realised that technology is the most important factor in manufacturing sector expansion.

A pivotal point of difference is the demographic transformation with China's population more inclined to the old age group, India's adult and working population seems to be on a rise in the current time period which means higher per capita growth . In the long run, India will continue as a potential market for consumer goods and technical services wheres China will remain an attractive manufacturing hub.

Overall, both will have a sustained and high growth rate in the long run.