China & India economic development

Essay by nelpilay December 2004

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I. Abstract

The driving forces in the world economy are shifting towards Asia. This paper highlights the development strategies which have been adopted by India and China over the last 20 years. Both the countries have adopted policies aimed at opening up their economies in their quest to transform themselves into developed nations. It is not an easy passage as each of these countries is faced with serious economical challenges. Yet, despite the challenges they have registered spectacular economic growth in the last two decades which are effecting a profound impact on the rest of the world.

II. Content page

No: Subject Page

1.0 Introduction 3

1.1 Research Problem 3

1.2 Research Objective 4

1.3 Research Question 4

2.0 Research Methodology 4

3.0 Finding 4

3.1 China's economic prospects 5

3.1.1 The phenomenal growth 5

3.1.2 The challenges 6

3.2 India's economic prospects 9

3.2.1 The pace of growth 9

3.2.2 The challenges 11

4.0 Analysis 12

4.1 The world trading system 12

4.2 The world monetary system 13

4.3 Foreign direct investment 14

5.0 Conclusion 15

6.0 Learning outcome/recommendation 16

References 17

1.0 Introduction

In 1980, India was the fifth largest economy in the world, while China was eight largest (in terms of Gross Domestic Product (GDP) compared at purchasing power parity exchange rates. By 2001, China has leapt to second place, behind the United States, and India had moved up into fourth place (IMF Survey 2003). Today, these demographic giants account for nearly 40% of the world's population and nearly 20% of the world output. Having vast domestic markets, the two countries have followed inward-looking development strategies for a long period before deciding on opening up. For the last twenty years China and India have pursued opening up economic policies: they have lowered their custom duties, their non...