China, India, and the Future of the World Economy: Fierce Competition Or Shared Growth?


Book Description

Abstract: Although both China and India are labor-abundant and dependant on manufactures, their export mixes are very different. Only one product-refined petroleum-appears in the top 25 products for both countries, and services exports are roughly twice as important for India as for China, which is much better integrated into global production networks. Even assuming India also begins to integrate into global production chains and expands exports of manufactures, there seems to be opportunity for rapid growth in both countries. Accelerated growth through efficiency improvements in China and India, especially in their high-tech industries, will intensify competition in global markets leading to contraction of the manufacturing sectors in many countries. Improvement in the range and quality of exports from China and India has the potential to create substantial welfare benefits for the world, and for China and India, and to act as a powerful offset to the terms-of-trade losses otherwise associated with rapid export growth. However, without efforts to keep up with China and India, some countries may see further erosion of their export shares and high-tech manufacturing sectors.




Reintegrating India with the World Economy


Book Description

After nearly five decades of insulation from world markets, state controls, and slow growth, India embarked in 1991 on a process of liberalization of controls and progressive integration with the global economy in an effort to put its economy on a path of rapid and sustained growth. Despite major changes in the government since then, the thrust on reforms has been maintained. According to the World Bank, only 10 out of 145 countries had more rapid growth than India at over 6 percent per year in the 1990s and two had the same as India's. In this study, T.N. Srinivasan and Suresh D. Tendulkar analyze the economics and politics of India's recent and growing integration with the world economy. They argue that this process has to be nurtured and accelerated if India is to eradicate its poverty and take its rightful place in the global economic system.The study covers the historical roots and the political economy of India's late integration; domestic and external constraints on integration; external capital inflows including foreign direct investment; and India's emerging comparative advantage in the information technology industry and services, particularly computer software. The final chapter offers policy recommendations including proposals that India could make at the ongoing Doha Round of multilateral trade negotiations.




China's Economic Rise


Book Description

Prior to the initiation of economic reforms and trade liberalization 36 years ago, China maintained policies that kept the economy very poor, stagnant, centrally-controlled, vastly inefficient, and relatively isolated from the global economy. Since opening up to foreign trade and investment and implementing free market reforms in 1979, China has been among the world's fastest-growing economies, with real annual gross domestic product (GDP) growth averaging nearly 10% through 2016. In recent years, China has emerged as a major global economic power. It is now the world's largest economy (on a purchasing power parity basis), manufacturer, merchandise trader, and holder of foreign exchange reserves.The global economic crisis that began in 2008 greatly affected China's economy. China's exports, imports, and foreign direct investment (FDI) inflows declined, GDP growth slowed, and millions of Chinese workers reportedly lost their jobs. The Chinese government responded by implementing a $586 billion economic stimulus package and loosening monetary policies to increase bank lending. Such policies enabled China to effectively weather the effects of the sharp global fall in demand for Chinese products, but may have contributed to overcapacity in several industries and increased debt by Chinese firms and local government. China's economy has slowed in recent years. Real GDP growth has slowed in each of the past six years, dropping from 10.6% in 2010 to 6.7% in 2016, and is projected to slow to 5.7% by 2022.The Chinese government has attempted to steer the economy to a "new normal" of slower, but more stable and sustainable, economic growth. Yet, concerns have deepened in recent years over the health of the Chinese economy. On August 11, 2015, the Chinese government announced that the daily reference rate of the renminbi (RMB) would become more "market-oriented." Over the next three days, the RMB depreciated against the dollar and led to charges that China's goal was to boost exports to help stimulate the economy (which some suspect is in worse shape than indicated by official Chinese economic statistics). Concerns over the state of the Chinese economy appear to have often contributed to volatility in global stock indexes in recent years.The ability of China to maintain a rapidly growing economy in the long run will likely depend largely on the ability of the Chinese government to implement comprehensive economic reforms that more quickly hasten China's transition to a free market economy; rebalance the Chinese economy by making consumer demand, rather than exporting and fixed investment, the main engine of economic growth; boost productivity and innovation; address growing income disparities; and enhance environmental protection. The Chinese government has acknowledged that its current economic growth model needs to be altered and has announced several initiatives to address various economic challenges. In November 2013, the Communist Party of China held the Third Plenum of its 18th Party Congress, which outlined a number of broad policy reforms to boost competition and economic efficiency. For example, the communique stated that the market would now play a "decisive" role in allocating resources in the economy. At the same time, however, the communique emphasized the continued important role of the state sector in China's economy. In addition, many foreign firms have complained that the business climate in China has worsened in recent years. Thus, it remains unclear how committed the Chinese government is to implementing new comprehensive economic reforms.China's economic rise has significant implications for the United States and hence is of major interest to Congress. This report provides background on China's economic rise; describes its current economic structure; identifies the challenges China faces to maintain economic growth; and discusses the challenges, opportunities, and implications of China's economic rise.




The China-India Rivalry in the Globalization Era


Book Description

As the aspirations of the two rising Asian powers collide, the China-India rivalry is likely to shape twenty-first-century international politics in the region and far beyond. This volume by T.V. Paul and an international group of leading scholars examines whether the rivalry between the two countries that began in the 1950s will intensify or dissipate in the twenty-first century. The China-India relationship is important to analyze because past experience has shown that when two rising great powers share a border, the relationship is volatile and potentially dangerous. India and China’s relationship faces a number of challenges, including multiple border disputes that periodically flare up, division over the status of Tibet and the Dalai Lama, the strategic challenge to India posed by China's close relationship with Pakistan, the Chinese navy's greater presence in the Indian Ocean, and the two states’ competition for natural resources. Despite these irritants, however, both countries agree on issues such as global financial reforms and climate change and have much to gain from increasing trade and investment, so there are reasons for optimism as well as pessimism. The contributors to this volume answer the following questions: What explains the peculiar contours of this rivalry? What influence does accelerated globalization, especially increased trade and investment, have on this rivalry? What impact do US-China competition and China’s expanding navy have on this rivalry? Under what conditions will it escalate or end? The China-India Rivalry in the Globalization Era will be of great interest to students, scholars, and policymakers concerned with Indian and Chinese foreign policy and Asian security.




Fateful Triangle


Book Description

Taking a long view of the three-party relationship, and its future prospects In this Asian century, scholars, officials and journalists are increasingly focused on the fate of the rivalry between China and India. They see the U.S. relationships with the two Asian giants as now intertwined, after having followed separate paths during the Cold War. In Fateful Triangle, Tanvi Madan argues that China's influence on the U.S.-India relationship is neither a recent nor a momentary phenomenon. Drawing on documents from India and the United States, she shows that American and Indian perceptions of and policy toward China significantly shaped U.S.-India relations in three crucial decades, from 1949 to 1979. Fateful Triangle updates our understanding of the diplomatic history of U.S.-India relations, highlighting China's central role in it, reassesses the origins and practice of Indian foreign policy and nonalignment, and provides historical context for the interactions between the three countries. Madan's assessment of this formative period in the triangular relationship is of more than historic interest. A key question today is whether the United States and India can, or should develop ever-closer ties as a way of countering China's desire to be the dominant power in the broader Asian region. Fateful Triangle argues that history shows such a partnership is neither inevitable nor impossible. A desire to offset China brought the two countries closer together in the past, and could do so again. A look to history, however, also shows that shared perceptions of an external threat from China are necessary, but insufficient, to bring India and the United States into a close and sustained alignment: that requires agreement on the nature and urgency of the threat, as well as how to approach the threat strategically, economically, and ideologically. With its long view, Fateful Triangle offers insights for both present and future policymakers as they tackle a fateful, and evolving, triangle that has regional and global implications.




Global Trends 2040


Book Description

"The ongoing COVID-19 pandemic marks the most significant, singular global disruption since World War II, with health, economic, political, and security implications that will ripple for years to come." -Global Trends 2040 (2021) Global Trends 2040-A More Contested World (2021), released by the US National Intelligence Council, is the latest report in its series of reports starting in 1997 about megatrends and the world's future. This report, strongly influenced by the COVID-19 pandemic, paints a bleak picture of the future and describes a contested, fragmented and turbulent world. It specifically discusses the four main trends that will shape tomorrow's world: - Demographics-by 2040, 1.4 billion people will be added mostly in Africa and South Asia. - Economics-increased government debt and concentrated economic power will escalate problems for the poor and middleclass. - Climate-a hotter world will increase water, food, and health insecurity. - Technology-the emergence of new technologies could both solve and cause problems for human life. Students of trends, policymakers, entrepreneurs, academics, journalists and anyone eager for a glimpse into the next decades, will find this report, with colored graphs, essential reading.




Finance & Development, March 2012


Book Description

Young people, hardest hit by the global economic downturn, are speaking out and demanding change. F&D looks at the need to urgently address the challenges facing youth and create opportunities for them. Harvard professor David Bloom lays out the scope of the problem and emphasizes the importance of listening to young people in "Youth in the Balance." "Making the Grade" looks at how to teach today's young people what they need to get jobs. IMF Deputy Managing Director, Nemat Shafik shares her take on the social and economic consequences of youth unemployment in our "Straight Talk" column. "Scarred Generation" looks at the effects the global economic crisis had on young workers in advanced economies, and we hear directly from young people across the globe in "Voices of Youth." Renminbi's rise, financial system regulation, and boosting GDP by empowering women. Also in the magazine, we examine the rise of the Chinese currency, look at the role of the credit rating agencies, discuss how to boost the empowerment of women, and present our primer on macroprudential regulation, seen as increasingly important to financial stability. People in economics - C. Fred Bergsten, American Globalist. Back to basics - The multi-dimensional role of banks in our financial systems.




The Oxford Companion to the Economics of China


Book Description

99 entries written by leading China scholars. Topics include: The China Model, Future Prospects, Global Economy, Trade, Macroeconomics and Finance, Urbanization, Industry and Markets, Agriculture, Land, Infrastructure and Environment, Labour, Wellbeing and Inequality, Health and Education, Gender, Regional Divergence, and Provincial studies.




India and China: Markets - Competitors - Partners


Book Description

Academics, students, the media and the public have been increasingly drawn to China and India in recent years. Both countries were considered sleeping giants and are now turning into the motors of global economic growth. China and India are both ancient civilizations with a rich history and were among the largest economic powers until European colonization in the 19th century. After Indian independence in 1947 and the establishment of the Peoples Republic of China in 1949 both countries shared the view that economic development should be achieved through a self-sustaining economy led and controlled by the government. In the following decades the share of Chinese and Indian global trade decreased significantly. Economic reform in China and India in 1978 and 1991 respectively resulted in an increasing integration into global markets and triggered large economic growth. It is very important to note that although China and India are both rising at the same point of time, they are rising in a different pace. China outperforms India in almost every indicator of economic development. It is the key aim of this study to point out this asymmetry between China and India. Another question is, if India is capable of catching up with China in the future and its effects to Sino-Indian relations. Die Rolle von China und Indien in der Welt hat sich in den letzten Jahren sehr stark gewandelt. Aus Bittstellern wurden Gläubiger und Motoren für das globale Wirtschaftswachstum. Dieses Buch setzt sich mit den ökonomischen Asymmetrien die zwischen Indien und China existieren auseinander. Ein historischer Überblick über die mehr als 2000 Jahre zurückreichenden ökonomischen Beziehungen ist der Ausgangspunkt der Studie. Beide Volkswirtschaften werden anhand von ökonomischen Indikatoren wie Wirtschaftswachstum, Reduzierung von Armut, Integration in internationale Märkte, demographischer Wandel, institutionelle Herausforderungen usw. miteinander verglichen. In einem zweiten Schritt werden die bilateralen Handelsbeziehungen zwischen Indien und China genau analysiert. Mit Hilfe einfacher ökonomischer Methodik werden Gebiete für Kooperation und Konflikte herausgearbeitet und die gegenseitige Wahrnehmung als Handelspartner analysiert. In einem dritten Schritt werden China und Indien im globalen Handel betrachtet. Hierfür wird die Bedeutung von China und Indien als Import- und Exportpartner für die Welt beschrieben und die am häufigsten gehandelten Produkte systematisch aufgelistet. Dabei lässt sich erkennen in welchen geographischen Gebieten und bei welchen Gütern indisch-chinesische Kooperationen oder Konflikte zu erwarten sind. Eine dynamische Analyse untersucht, ob Indien seinen Rückstand auf China aufholen kann und liefert eine Prognose für zukünftige sino-indische Wirtschaftsbeziehungen.




Global China


Book Description

The global implications of China's rise as a global actor In 2005, a senior official in the George W. Bush administration expressed the hope that China would emerge as a “responsible stakeholder” on the world stage. A dozen years later, the Trump administration dramatically shifted course, instead calling China a “strategic competitor” whose actions routinely threaten U.S. interests. Both assessments reflected an underlying truth: China is no longer just a “rising” power. It has emerged as a truly global actor, both economically and militarily. Every day its actions affect nearly every region and every major issue, from climate change to trade, from conflict in troubled lands to competition over rules that will govern the uses of emerging technologies. To better address the implications of China's new status, both for American policy and for the broader international order, Brookings scholars conducted research over the past two years, culminating in a project: Global China: Assessing China's Growing Role in the World. The project is intended to furnish policy makers and the public with hard facts and deep insights for understanding China's regional and global ambitions. The initiative draws not only on Brookings's deep bench of China and East Asia experts, but also on the tremendous breadth of the institution's security, strategy, regional studies, technological, and economic development experts. Areas of focus include the evolution of China's domestic institutions; great power relations; the emergence of critical technologies; Asian security; China's influence in key regions beyond Asia; and China's impact on global governance and norms. Global China: Assessing China's Growing Role in the World provides the most current, broad-scope, and fact-based assessment of the implications of China's rise for the United States and the rest of the world.