China & India Economic Development Essay

3716 words - 15 pages

I. AbstractThe 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 pageNo: Subject Page1.0 Introduction 31.1 Research Problem 31.2 Research Objective 41.3 Research Question 42.0 Research Methodology 43.0 Finding 43.1 China's economic prospects 53.1.1 The phenomenal growth 53.1.2 The challenges 63.2 India's economic prospects 93.2.1 The pace of growth 93.2.2 The challenges 114.0 Analysis 124.1 The world trading system 124.2 The world monetary system 134.3 Foreign direct investment 145.0 Conclusion 156.0 Learning outcome/recommendation 16References 171.0 IntroductionIn 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 tariff barriers and have allowed foreign direct investment. This process of opening up has been accompanied by domestic economic liberalisation, resulting in an accelerated economic growth.1.1 Research problemChina and India with their large population, economic strength, and a huge trading sector are moving towards becoming important players in the global economy. Nevertheless, their quest of being global economic players will be hindered if they do not effectively address the huge development challenges currently being faced.1.2 Research objectiveThe outcome of the ongoing economic transformation in China and India has a profound impact on the world trading system, world monetary system and the foreign direct investments (FDI).1.3 Research questionAmerica has long been the primary engine of the global economy. Would China and India be capable candidates in becoming the second important engine of growth of the global economy?2.0 Research methodologyThe data for this assignment is obtained from various secondary sources i.e. textbooks, economic articles and reviews from economic and business magazines and also from the World Bank and International Monetary...

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