subject: Chinas Economic Growth Compared To India [print this page] Chinas economy has grown massively in the last couple of decades. Although Indias economy has also grown in this period, in terns of numbers it cannot be compared to its Asian counterpart. The two countries have the two biggest populations on earth with 1.3 billion and 1.2 billion respectively. China has more than a billion more residence than the third biggest, the USA.
Chinas economy grew by 10% on average every year in the 1990s, and this growth has increased still further since. It currently has the third biggest economy, behind the US and Japan, and is expected to overtake both these in the next few years.
There are several reasons for Chinas growth. Its population alone gives it a significant advantage, and is the reason why such rapid growth has been possible. Government stimulation has certainly helped, with large amounts of cash flow put towards infrastructure and transport. There are also many investment opportunities for foreign investors. Another major reason is the cheap labour available for companies coming into the country. This has been utilised by a number of large clothing corporations, with a large proportion of the worlds clothes manufactured in the country. Manufacturing has been the most significant growth area. It means that foreign companies can manufacture their clothes significantly cheaper by going to China, rather than having them manufactured in their own country. Some companies have been criticised for providing poor working conditions for workers as there arent the same strict regulations as elsewhere. Living costs are lower in China, meaning its workers dont demand the same wages, and therefore lower costs for the businesses.
India has not grown in the way China has but there has been an increase due to the cheap labour it offers. Several call centres have moved to the country in the last ten years. Some companies have received criticism for this for several reasons. One of these is that it has resulted in people elsewhere loosing their jobs in the name of bigger profits. Another reason is that it means that customers are not talking to someone in their own country, meaning they dont speak to someone who can directly solve their query.
Call centres are the equivalent to clothing companies in China, when it comes to foreign businesses utilising the counties workforce. A major reason why Chinas economy has grown more than Indias is the huge technological advances that have taken place. There has been a vast difference between the two countries in this area. India hasnt had the same government investment either. It is also still relatively rural, with a large amount of urban migration having taken place in China. They are following the model of the west more and more, with large industrial cities such as Beijing and Shanghai. It has also been suggested that the stability of the Chinese government has been important, as the economic situation is not affected by political change. Does this mean that democracy is bad for the economy?
The recent worldwide recession has affected China though. Growth has been so rapid that it was bound to have an impact. However, it has recovered quicker than many other countries; partly due to government intervention and partly due to the fact that their economy had been growing so much.
Andrew Marshall
by: expo09
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