Overview
The Asian Economy has assumed a seemingly unstoppable upward trajectory over the past years. The continental economy owes its growth to the individual economic growth of its constituent countries; among them, China and India. Arguably, these two contemporary global economic giants have transcended the continental boundaries to join the global economic battle ground. David and Harris-White (2014), alluding to recent IMF reports, notes that China is the second largest economy in the world in terms of GDP, but number one by parity of purchasing power. The duo also realize that India’s economy is the seventh-largest in the universe by nominal GDP and third-largest with respect to its parity of purchasing power. Over the past 30 years, China topped the ranks as the fastest-growing major economy, with and average growth rate of 10% (Tsui, Wong, Chi & Tiejun, 2017). In the same period, India’s economy had retained the top position in the category of newly industrialized countries and economies, with an average growth rate of 7% (Sharma & Wardhan, 2017). From the late 1970s, the people’s republic of China has transitioned to a more market-oriented system from its previously valued centrally planned framework. The latter has been found to play a major global role and facilitate the growth of the country’s economy in the global scale. Economic reforms in the country commenced through abolishment of collectivized agriculture which gave way for expansions including fiscal decentralization, creation of a dynamic banking system, ratification of the policies concerning the private sector, and gradual price liberalizations. Other foundations of economic reforms included stock market development, increased state enterprises autonomy, and increased foreign investment and trade. China has slowly but surely implemented its reforms, rising above the ranks and judiciously dealing with the oncoming economic challenges.
On the other hand, India is gradually abandoning its autarkic economic policies for an open-market economy which has been determined to favor global competition. Economic liberalization measures have since taken center stage. Some of the prominent measures include privatization of state-owned enterprises, minimal restrictions on foreign investments and trade, as well as industrial deregulation. Some experts note that these reforms, began at the dawn of the 1990s, marked the beginning of accelerated India’s economic growth, and laid a strong foundation to the country’s contemporary economic prosperity. While much of the labor is in agriculture, services are projected to be the major source of India’s economic growth. The services sector account for approximately two-thirds of the total output while having less than a third of the labor force. Fundamentally, the country has maximized the importance of its large pool of English-speaking population to export business outsourcing service, and information technology throughout the world. In General, both China and India are rapidly growing their economies, and besides the prospects of a brighter future for both, it is challenging to determine whether China will remain ahead of India in the foreseeable future.
Comparison: Political Economy, Infrastructure, Education, and Population Growth