China And India Are Rising Economic Powers, Say Several Economists


  • Subhash Vohra's Report (narrated by Steve Ember) 1.2 MB (Real)

  • Subhash Vohra's Report (narrated by Steve Ember) 3.4 MB (MP3)

Two point four billion people, or 40 % of the world’s population, live in China and India. Some economists believe that China and India, with two point four billion people, are moving toward becoming the world's largest economies. We look at the economic growth of the large Asian nations, their increasing trade relations and the change in U.S. policies toward India and China.

China is the world's most populous country with one point three billion people, just ahead of India, with one point one billion people. With economic growth between 8 and 10 % per year, economists say the two countries are moving toward becoming the world's largest economies as well. 

Currently the United States has the largest and most technologically advanced economy in the world, with a per capita GDP of $43,500. China’s per capita GDP is $7,600 and India’s is  $3,700

Pieter P. Bottelier, adjunct professor of Chinese Studies, says China and India may eventually surpass the United States economically, but it will be a long time before that happens: ”I think the prospect is that if these two giant countries continue to grow at the current rate, they will become world’s two largest economies, but that still is some decades away.” 

India and China have different political systems. India is the world’s largest democracy, but China is still under tight communist government control. 

Pranab Bardhan, professor of economics at the University of California - Berkeley, says foreign investors are willing to invest in countries with authoritarian regimes, if it suits their business interests: ”There is no doubt that India is much more of a vibrant democracy whereas China, although in some respect things have been relaxed, remains an authoritarian regime, says Prof. Bardhan. “But it is not the case that foreign investors are always attracted toward democracy. Foreign investors go where more money is to be made and they want a predictable regime, and sometimes authoritarian regimes provide more predictability than in democratic countries.”

According to Dr. Pami Dua, professor of economics at the Delhi School of Economics, University of Delhi, in India, China may owe some of its economic success to its location: “The east coast of China is situated in a highly dynamic and rich neighborhood. Neighbors like Japan, South Korea, Taiwan, Hong Kong, Thailand, and Singapore provide capital for investment, markets for Chinese exports, more advanced technology, and expertise. The neighborhood of India, in comparison, is less dynamic: Pakistan, Burma, Sri Lanka, Bangladesh, and Nepal, says Prof. Dua. “Very few such transfers take place between India and its neighbors to India’s advantage.”

Professor Bottellier argues that China and India face very different challenges: ”Both countries are now growing at an extraordinary high rate of between 9 and 10%. But the challenges facing the two countries are not the same. Generally, China has gone much further than India in trade liberalization and in opening to foreign investment. So, many people have expressed some doubts about the sustainability of the Indian high growth at this time unless the country proceeds more aggressively on the globalization bus.”

Professor Dua adds that India and China have both advantages and disadvantages, as well:  ”Issues facing India are much more broad-based such as improvement in infrastructural facilities, effective administration, labor reforms etc. One disadvantage that China has is lack of a good quality record in software. Another disadvantage is low percentage of Chinese population speaking English and a less mature and relatively new Business Process Outsourcing industry, BPO.  However, China has certain advantages compared to India that includes lower manpower cost as Chinese workers cost less than similarly qualified Indians.”

China and India have come a long way since they fought a brief border war in 1962.  Both countries are not only developing economically at rapid speed, but they are also making extraordinary efforts to increase mutual trade and to improve bilateral relations. Chinese President Hu Jintao's state visit to India last November reflects the progress of bilateral dialogue on a range of issues over the past few years. Rapid economic growth and the expansion of bilateral trade have fueled the development of closer relations.

Trade between India and China reached 18 point 4 billion dollars last year -- up from only 338 million dollars in 1992. Both countries pledged to double trade to 40 billion dollars a year during talks in New Delhi between Indian Prime Minister Manmohan Singh and Chinese President Hu Jintao.

Despite these developments, several analysts say India remains suspicious of China's relationship with its long-time rival, Pakistan. And China is concerned about New Delhi's growing ties with Washington, especially their landmark nuclear agreement allowing India access to civilian nuclear technology. Some expect the United States to deepen ties with India - a democracy it views as less threatening - as a counterbalance.

However, Prof. Bottellier says concerns that the Chinese are worried about India's relationship with the United States are overblown: “I am very pleased that the United States and India are developing good, constructive friendly relations. That is very important for both countries, says Prof. Bottellier. “I do not think that the proposed civilian nuclear agreement between the United States and India is resented or rejected by China. In fact, the Chinese government has been remarkably silent on that subject. One would have expected the Chinese to have protested, but they have not done so. Even during the visit of Chinese President Hu to India in the latter part of last year, this was not the subject of discussion.”

Although the vast majority of the rural population in both countries remains illiterate and impoverished -- and many structural and institutional problems lie ahead -- many analysts say there is no doubt about the enormous economic potential of China and India in the 21st century.

This report was written by Subhash Vohra.  For VOA News Now I’m Steve Ember.



This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Russia’s Syria Involvement Raising Concerns in Europei
Luis Ramirez
October 02, 2015 4:45 PM
European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video Russia’s Syria Involvement Raising Concerns in Europe

European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video First Self-Driving Truck Debuts on European Highways

The first automated semi-trailer truck started its maiden voyage Friday, Oct. 2, on a European highway. The Daimler truck called 'Actros' is the first potentially mass-produced truck whose driver will be required only to monitor the situation, similar to the role of an airline captain while the plane is in autopilot mode. VOA’s George Putic reports.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Migrant Influx Costs Europe, But Economy Could Benefit

The influx of hundreds of thousands of refugees and migrants is testing Europe’s ability to respond – especially in the poorer Balkan states. But some analysts argue that Europe will benefit by welcoming the huge numbers of young people – many of them well educated and willing to work. Henry Ridgwell reports from London.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

Video New Fabric Helps Fight Dust-Related Allergies

Many people around the world suffer from dust-related allergies, caused mainly by tiny mites that live in bed linen. Polish scientists report they have successfully tested a fabric that is impenetrable to the microscopic creatures. VOA’s George Putic has more.

Video Burkina Faso's Economy Deeply Affected by Political Turmoil

Political turmoil in Burkina Faso over the past year has taken a toll on the economy. The transitional government is reporting nearly $70 million in losses in the ten days that followed a short-lived coup by members of the presidential guard earlier this month. The crisis shut businesses and workers went on strike. With elections on the horizon, Emilie Iob reports on what a return to political stability can do for the country's economic recovery.

Video Fleeing Violence, Some Syrians Find Refuge in Irbil

As Syrians continue to flee their country’s unrest to seek new lives in safer places, VOA Persian Service reporter Shepol Abbassi visited Irbil, where a number Syrians have taken refuge. During the religious holidy of Eid al-Adha, the city largely shut down, as temperatures soared. Amy Katz narrates his report.

Video Nigeria’s Wecyclers Work for Reusable Future in Lagos

The streets and lagoons of Africa's largest city - Lagos, Nigeria - are often clogged with trash, almost none of which gets recycled. One company is trying to change that. Chris Stein reports for VOA from Lagos.

Video Sketch Artist Helps Catch Criminals, Gives a Face to Deceased

Police often face the problem of trying to find a crime suspect based on general descriptions that could fit hundreds of people in the vicinity of the crime. In these cases, an artist can use information from witnesses to sketch a likeness that police can show the public via newspapers and television. But, as VOA’s Greg Flakus reports from Houston, such sketches can also help bring back faces of the dead.

Video Thailand Set to Build China-like Internet Firewall

Thai authorities are planning to tighten control over the Internet, creating a single international access point so they can better monitor content. VOA Correspondent Steve Herman reports from Bangkok on what is being called Thailand’s own "Great Firewall."

Video Croatian Town’s War History Evokes Empathy for Migrants

As thousands of Afghanistan, Iraqi and Syrian migrants pass through Croatia, locals are reminded of their own experiences with war and refugees in the 1990s. VOA's Daniel Schearf reports from the town of Vukovar, where wartime scars still are visible today.

Video Long Drought Affecting California’s Sequoias

California is suffering under a historic four-year drought and scientists say even the state's famed sequoia trees are feeling the pain. The National Park Service has started detailed research to see how it can help the oldest living things on earth survive. VOA’s George Putic reports.

VOA Blogs