The Chinese and Indian Economies: Comparing the Comparables

Abstract

Both China and India were noted for their prowess and prosperity in the remote past, but in the recent past they went into a precipitous decline and became marginal economies, known for large impoverished masses and economic stagnation. Early in the 21st century, China and India are once again being seen as two emerging economic powers of the global economy. The closing decades of the 20th century were remarkable for both the economies. China in particular turned in a stellar economic performance. In the beginning of the 21st century, it was even being seen as the economic super power of the future. It has emerged as a low-cost manufacturing juggernaut invading global markets in a sizeable array of products, with a high and rapidly rising level merchandise exports and imports. In comparison, India's post-1991 growth performance has shown improvement. Although its success in the services sector exports is noteworthy, its economic performance did not match that of China. The economic weight of China and its integration into the global economy is going to continue to increase, and India could follow suit. This article compares and contrasts the two emerging-market economies of Asia, their soaring global significance and global integration and draws policy related lessons from it.