The political regimes in China and India are similar in the way that both currently operate as a market economy, but they also have very many differences. We will examine a number of factors that contribute to the economic and political climates of both countries in comparison with each other. These factors include growth and other economic indicators, foreign direct investment and labour laws. This paper seeks to prove that the Chinese economy provides a more advantageous environment than that of its Indian counterparts for a foreign investor looking to do business and that involvement in the private sector is most beneficial.
Before the aforementioned factors are examined, we will briefly discuss the political regimes of China and India
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Firstly, Inamdar’s 2013 article comparing China and India will be scrutinised. It demonstrates that China fared considerably better than India on a number of fronts including - but not limited to - GDP forecasts, purchasing managers indexes (PMIs), exports, consumer confidence, output growth and currency values for that particular year. Bosworth and Collins (2008) further confirm this, stating that China’s rapid growth has now lasted more than a quarter century. The private sector grew particularly well according to Kumar and Worm (2011) accounting for around 70 percent of China’s GDP in 2005, hence why becoming involved in the Chinese private business sector would be far more preferable to that of the public. Growth has also been observed in China and India’s agricultural, industrial and services industries. As is the trend in information so far, China dwarfs India’s growth in the agriculture and industry sectors with the services sector being the one that comes closest to exceeding that of China. India is also behind China in areas such as education. India lags behind China in lowering the portion of the population with no education and in the literacy rate. Research also found that that India had low rates of return to primary education and a rising rate of return to higher …show more content…
During the last 15 years China has received between US $60-100 billion in FDI projects annually and represent over 4 percent of GDP compared to that of India whose inflows from FDI have been approximately US $5 billion and less than 1 percent of GDP (Bosworth & Collins, 2008). China’s inflows are incredibly extensive to agree that has not been attained by any other developing economy. Cheap labour and a potential huge domestic market have made china he preferred investment destination of foreign companies (Kumar & Worm, 2011). And with all of these FDI, access to global markets is promoted and bring the accumulation of technology and management skills (Bosworth & Collins, 2008). China’s success involving FDI is partly due to the policies surrounding it. Sweeney’s (2010) summarises the differences between Chinese and Indian policy in his article, stating that India’s governance of foreign direct investment more perplexing and more highly regulated than China’s, whose was primarily developed to encourage FDI and promote a sense of transparency for the comfort of foreign investors. India’s confusing policies are considered to be a detriment to their competiveness, with political stability ranked as one of the most serious factors impacting upon it. China, on the other hand is considered the most politically
In Shikha Dalmias “Long Live the American Dream” she goes on to portray the strengths of America compared to China and India (85). It is popularly believed that China and
Sitting close to the edge of being a “developing” and a “developed” country, China is a difficult country to define neatly. It is a country with an ancient and traditional culture trying to position itself higher within the international community. Plus it is also a communist country that has come to embrace its own form of capitalism to fuel its economy. China’s economic boon has been beneficial to many people within the country. But not to all people within China evenly.
Political parties in the China and the United States are exceptionally different. In a way that each country's political party system has their own way of controlling their government. At the end each country's main objective is to make sure their country would succeed. In China they have a Communist form of government and in the United States, we have a Democratic and Republican parties. Also events that happen in or out of China or the United States affects policy making.
I found this article "Foreign direct investment: Companies rush in with the cash" on the financial times website (www.FT.com) published December 11, 2002 written by John Thornhill. The reason for choosing this article is my personal interest in the Chinese economy and its attractiveness to the foreign investors. Apart from the foreign direct investment this topic has also helped me in understanding the impact of Chinese economy on the global market.
Throughout, 1900- 1950 there were a number of changes and continuities in China. From the fall of the dynasties to the rise of the Communist Party, these changes shaped China’s government and society. Although, many political changes were made multiple continuities were held constant such as, consistent rebellions and the lack of democracy.
Wadwha, Vivek. (2007). Seeing Through Preconceptions: A Deeper Look at China and India. Issues in science and technology online. Retrieved (2010, March 11) from http://www.issues.org/23.3/wadhwa.html
China’s rise will not be a threat to Asian stability. It seems that the peaceful rise of China is calculated by other Asian countries as a potential economic threat in the region. But on the contrary, China is not a threat as perceived. China, in reality is just another regular state making waves to restore its lost pride after being materially humiliated, defeated, and shammed by Imperial Japan –and the West- in pre-modern East Asia. Its peaceful rise to global importance is ironically a hybrid balance between capitalism and socialism, which some experts and scholars are still struggling to explain. In my counter argument I will briefly explain China’s peaceful rise and its threat perception in the Asia-Pacific region. China’s main objective is to build and project soft power diplomacy with more focus on developing countries to share its wealth and promote a harmonious and peaceful society. China has no intention of pursing an expansionist approach or becoming hegemony in the Asian region or globally for that matter.
In the year 2007, China and India ranked first and second respectively in the list of ideal foreign direct investment (FDI) destinations, according to A T Kearney, a global strategic management consulting firm (The Press Trust of India Limited, 2007a). The two nations, because of their similarities in geopolitical, economic and demographic aspects, are often compared with each other. To determine which one is more attractive for businesses to expand to, this essay will examine the business environment of both countries from the following perspectives: political/legal, economic, socio-cultural and technological.
Since its independence in 1947, political stability has been a key factor which has ensured that India is the largest democracy in the world today. In spite ...
By definition foreign direct investment is the acquisition of tangible assets such as machinery, land and factories; this type of investment are often between two companies- usually multinationals from different countries. FDI is one of the benefits of globalisation as it has a direct impact on aggregate demand having a follow on effect on technology, job opportunities and increased intellectual property owned by countries. In this essay I will discuss some of the factors that affect a country’s disposition to gaining foreign direct investment.
When the new Chinese Government was set up in 1949, the new government faced a lot of problems. First on their agenda was how to re-build the country. As Communist Party of China (CPC) is a socialist party, their policies at the time were similar to that of the Soviet Union’s. Consequently, the CPC used a centrally planned strategy as its economic strategy when it first began. For a long time, the Chinese economy was a centrally planned economy in which none other than the state owned all companies. In fact, there were absolutely no entrepreneurs. As time went on, the problems of a centrally planned economy started to appear, such as low productivity, which was the key reason for restricting the development of China. With the population growing, the limitations of the centrally planned economy were clear. In 1978 China started its economic reform whose goal was to generate sufficient surplus value to finance the modernization of the Chinese economy. In the beginning, in the late 1970s and early 19...
Finally, the United States political system has a strong structural structure but in China their people always work together to be the best and stand out in the world. It is predicted that China will one day be the largest economy-growing country in the world. They continually grow and rebalance their world to be the best. The growth of the economy will depend on the Chinese government's comprehensive economic reforms that more quickly accelerate China's transition to a free market economy. Consumer demand, rather than exporting, is the main engine of economic growth; boost productivity and innovation; address growing income disparities; and enhance environmental protection.
A country’s struggle to power is much like that of two rivalling siblings. They are locked in a constant competition as they attempt to one-up the other. Countries do the same as they race against each other to produce better exports, and to attract more money into their economy. They are constantly vying against each other for the center of attention so that they are the main focal point of the international world. This competition continues until one finally relents, or blatantly falls, and allows the other to shine; much like how China is slowly managing to overtake the U.S. in terms of international influence. The success of one individual cannot remain forever, and eventually they will begin to fall. This is the current situation where the U.S. and China stand today as China is beginning to overtake the U.S. in terms of economic capability. With a superior economy, it is possible for China to overcome the challenges it faces as it moves into position as the next world power. Though, just like the pair of siblings, despite China’s recent successes, the other won’t disappear completely. The U.S. will not disappear into the background and allow China to take complete control as hegemon, or world power, and establish something akin to a uni-mulipolar system. A system where there is one main power and many already established rising powers. This uni-multipolar system allows for other countries to continuously compete for the position at the top.
The Associated Chambers of Commerce and Industry of India. (2012). India’s Experience with fdI: Role of a Game Changer. Retrieved from http://www.assocham.org/arb/general/Indias_Experience_with_FDI_Role_of_a_Game_Changer.pdf
In the race to be the best, China is clearly outperforming the United States. China has strong economic fundamentals¬ such as “a high savings rate, huge labor pool, and powerful work ethic” (Rachman, Gideon. "Think Again: American Decline). Their economy has grown an astonishing 9-10% over the past thirty years; almost double of what it used to be decades ago. China is also the “world’s greatest manufacturer and its greatest market” (Rachman). The continuing growth of China's economy is a source of concern for not only the U.S. but surrounding nations as well. One could argue that the U.S. need not worry about China’s growth because of the spread of globalization and that western ideologies would influence China to turn to democracy. Yet China has still managed to “incorporate censorship and one party rule with continuing economic success” (Rachman) and remains a communist country. Hypothetically, even if China does resort to a democratic state, this does not gua...