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China Economic Development - Essay Example

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Chinese economy Name: Instructor: Task: Date: Chinese economy China has witnessed a progressive climb into its boom. In this sense, it is vital to compare the same with another country for illumination of its economic progress. The country of choice would be India…
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Chinese economy Task: Chinese economy China has witnessed a progressive climb into its boom. In this sense, it is vital to compare the same with another country for illumination of its economic progress. The country of choice would be India. Both India and china are front runners in the global economy. In turn, the differences between the two systems need in-depth analysis. Both of the countries emanate from ancient civilizations whereby various economic, political and social factors affect the same. As regards basic facts, China’s economy is more developed than that of China. While China is the second largest economy, in terms of GDP, India is the seventh largest economy. China has a GDP of 15094 billion/USD while India has a GDP of 1848 billion/USD. This means that China has a GDP of $4.9 trillion while India has a GDP of 1.3 trillion. It is vital to note of the GDP growth that has occurred in China. This growth has led to its economic dominance and eventual boom. China’s economic boom has matured for thirty years. China’s rise to the second largest economic status has matured for thirty years since it accepted free market principles (Wearden, 2010). Chinese economy has been growing at an average rate of 10 percent. This is equivalent to three times that of the world average. On the other hand, India has had a GDP growth rate of 8 percent. The China’s GDP success emanated from reforms that Deng Xiaoping initiated. In dollar terms, its GDP has risen from $147.3 billion, in 1978, to $4.9 trillion in 2009 (Wearden, 2010). China eased on its strict economic policies after the detriment caused by Great Leap Forward. This was an attempt by Mao to modernize China that derailed its economy for several years. This triggered the first wave of foreign investment thereby prompting the Chinese authorities in intervening to control inflation and economic growth. There are fundamental differences that drive India and China’s economic articulation. To begin with, India was under colonial rule for 190 years. This led to its stagnation in terms of economic growth since there was no local government to steer its growth. This also led to its slow progress in picking up economically. Colonial rule also drained India’s resources. On the other hand, there is limited history of colonization to China. This gave the country a space of initiating its economic initiatives and having a planned economic model. Another fundamental difference regards liberalization of markets. It is notable that China liberalized its markets earlier than India. This enhanced its economy to a great extent because of significant entrepreneurship. This led to welcome of private investment and foreign direct investment. On the other hand, India was slow in embracing open market economies and globalization. In addition, there is a difference between the two countries in terms of agriculture. It is vital to note that it forms a significant part of both economies. However, India’s agriculture is less developed. In this case, it has a substantial part of the same carried out for subsistence. In addition, growth of agriculture, in India, depends on individuals’ personal initiatives (Chatterjee, Heuer & Davis, 2006). In this sense, farmers still use old farming methods. Unlike India, China’s agriculture is more developed and technologically advanced. In addition, there are substantial government initiatives that prop the same. In terms of IT, India has more advanced systems than those of China. This stem down to the fact that India has a more liberalized system that allows substantial experimentation with IT (Maluste, 2011). On the other hand, China is more restrictive in terms of its information technology and internet use. China has a method of restricting information to its citizens by censorship methods. India has 840 million mobile users while China has 680 million users. Additionally, India has 120 million internet users while China has 81 million users of internet. In 2010, India had $49.7 billion earnings in the BPO sector while India had $35.76 billion earnings in its BPO sector. Additionally, India has better tax incentives than China. India rules in the court in terms of exchange transparency and predictability in the capital exchange markets. On the other hand, there is significant restriction on the Chinese capital market by the government. It is vital to note that China has a more advanced infrastructure system than that of India. This is evident in various forms. This includes roads and other transport services, housing, water management, civic amenities and communication (Chatterjee, Heuer & Davis, 2006). These aspects converge to give the same an economic edge over India. Unlike China, India still lags in terms of manpower development, civic amenities and sanitation services. In summary, China has witnessed a progressive articulation towards its economic boom. This emanated from market liberalization and early globalization. China has fundamental differences, with India, in terms of market liberalization and aspects of colonization. In this sense, China possesses a better GDP and its growth than India. This leads to a better manufacturing and infrastructure sector. However, India has a better IT and tax incentives than India. References Chatterjee, S., Heuer, M., & Davis, H. (2006). Management in India: trends and transition. Thousand Oaks, CA: SAGE. Maluste, R. (2011). Endogenous origins of economic reforms in India and China: the role of attitudinal changes. Boca Raton, FL: Universal-Publishers. Wearden, Graeme. (2010, August 16). Chinese economic boom has been 30 years in the making. The Guardian. Retrieved from http://www.guardian.co.uk/business/2010/aug/16/chinese-economic-boom. Read More
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