examination of Chinese and Indian

India and China are emerging as major world powers and boast being among the most populous nations in the world. The two worlds powers promise to test established global order in the coming decade. The countries are bound to change the current international system conversely, a close examination of Chinese and Indian perspectives on the fundamentals of the emerging international order. The research reveals that the sino-drama differences on many issues of both bilateral and global significance are stark. Despite their developmental similarities, China and India’s mutual strategic rivalry means that they have competing priorities on the most significant global issues.


Chinese and Indian industrial sectors, which consist of manufacturing, construction, public utilities, and mining, differ vastly. According to Bosworth and Collins (2008), the research article established that the industrial sector in China accounted for half of the Gross Domestic Product (GDP), while in India, it results in less than 30% percent margin. China has experienced a much faster rate of total factor productivity improvement. Since 1933 china has achieved significant growth rates in industrial worker output. The research established employment rates in China have declined only by a mere 1% per year, while production per worker has averaged by almost 10%. The study based on the alternative price deflator of the industrial sector depicts the trends.

Conversely, India has experienced a much smaller magnitude in industrial output, and its attribution is increasing employment. The rate of gain in India’s labor productivity is only a third of China. The contribution of increased capital per worker is much smaller in India, and benefits in total factor productivity in the industrial sector averaged a modest 1% annually.

Regulatory environment

From a historical perspective, India’s regulatory environment support to enterprise activity is at its minimum. According to recent studies, a broad base of Indian firms, as well as foreign investors, face numerous restrictions that deter economic activity. Kumar and Worm (2004) established that during the 1960s and 1970s in India’s before the economic reforms, they faced a financial crisis that translated to a 3-3.5% abysmal commercial growth rate. While China upto the 18th century was a leading economic powerhouse accounting to approximately 33% of the global GDP. China is committed to economic liberation, and operations and implementations of enterprise laws are different from India’s. The local authorities determine the formulation of impending statutes and how their application occurs. China is changing the incentives to induce them to foster active economic growth. Unlike China, the Indian judicial system determines the business operation policies and bureaucratic decisions.

Education Systems

The education system in China is superior to that of India in some perspective, as found out by recent studies. According to Arnove (1984), dating back from independence, India continues displaying capitalist methods. Although the state’s investments and capital formation exceed by far the western free-market economies, the parliamentary system is adopted. The political system is English in structure and compares to Federal governments. The strategy of human resource development that is incremental and accommodative, which attempts to expand, extend, self-governing education without radically threatening the advantages of already privileged sectors of the society. Chinas approach to accumulation and distribution of capital representation exists by a command economy. In such an economy, all resources, whether human or material, are allocated to non-economical mechanisms. India’s education system prioritizes personal knowledge, unlike China, where experience is specifically for the industrial purpose that translates to economic development. Although the education outcomes of India are improving approaching China’s.

Economic Growth(GDP)

According to economic analysis and compiled data, the dramatic shifts of 1980 made the economic growth of India and China sustainable. Dougherty and Vittorio(2009) explain that the significant difference comes in from Total Factor Productivity(TFP). Capital deepening, that is, an increase in capital intensity, usually evaluates capital stock per labor hour and which plays a significant role in China’s economic growth. The studies have elaborated that the turn-overs turns out as the primary explanatory factor indifference in per-capita annual growth in China and India. India averaged 4.8% between 2000 and 2005, about 8.1% yearly per capita GDP growth rate. The difference depicted in the expenditure differences also due to the implication. In India, it is less than 1%, while in China it is 1.4%. Chinese GDP is superior compared to India in all economic perspective. In Growth Domestic Product growth, china’s demographic dividend will tail off in the next ten years, while demographic rates in India will promote savings growth.

Exports and Imports

Critical measures of integration have made it more explicit on the output structures of the two nations. Siraj reports that China”s share of exports in GDP was 18% in 1990, which jumped to 34% in 2004. India’s share of exports in GDP rose to 19% from 4% during the same period, indicating India remains less export-oriented to China, according to recent studies. Conversely, India is less dependent on imports than China measured as a percentage of Gross Domestic Product. Similarly, the share in world exports of commercial services has increased from 1.6% to 2.9% between 1994 to 2004 for china.

Conversely, India, during the same period, experienced an abysmal increase from 0.6% to 1.9%. The increase in the share of exports hides many differences in the effects of comparative advantages that China possesses over India. The stocks on agricultural products, services, and merchandise in total exports steadily decreased whereas manufacturing exports increased between 1984 and 2004. In the research, India’s case was different as both the manufacturing and services shipping increased during the post-reform period. However, the manufacturers’ exports in India were half those of China.

External Debts

According to the World Bank’s International debt statistics (2014), India’s key debt indicators compare well with other indebted superpowers like China. The statistics indicate that India’s position was third in terms of free external debt stock, after China. The ratio of India’s foreign debt stock to Gross National Income(GNI) at 20.8% was fourth lowest, with China having the lowest proportion at 9.2%. In terms of the cover provided by foreign exchange reserves to external debt, India’s position was the seventh-highest with 71.4%. China’s debt measured 247 percent of the GDP, while India was 125 the Gross Domestic Product. In India, private debt in 2017 was 54.5% percent of the GDP, and in general cumulative terms, government debt was 70.4 percent of the GDP.

Case Study

Research has shown the industrial perspective of the labor markets in China and India contrasts in several ways. China was boasting over 50% of the GDP, while India’s compares with a 30% stake. The way forward is improving India’s manufacturing sector by increasing workforce and manufacturing-related exports. Consequently, India should increase the employment of the industrial workforce to increase productivity, which would result in increased economic growth and development and, in the long run, increased Gross Domestic Product.

Indications of the regulatory environment restrictions are the major causes of slow enterprise development, as stated by recent economic analysis. The Indian judiciary should lower limits to allow foreign investments and promote the business environment. Also, the Indian government should emulate China and offer incentives in a move to encourage investment, which in the long run, would translate to increased GDP. The productivity increase would stir even further enterprise development in the country.

India’s per capita GDP that translated to 8.1% annually was way less in comparison to China’s according to studies. The solution is India has to increase the expenditure capital, thereby increasing the capital stock markets. The Total Factor Productivity of India is minimal compared to China, and the solution is improvising capital deepening measures that increase capital intensity. The availability of capital would render more business operations and therefore increase productivity.

According to historical research, the education system in India’s foundation is on capitalistic methods. China’s policy is a command economy type that emphasizes on economic productivity. India should adopt new learning strategies that go a long way in improving the industrial sector rather than personal advancement. Also, the English and national policies in India should be dropped and replaced with non-economical education strategies.

Studies have shown China’s external debt insurance strategies are by the massive GDP and GNI reserves. The perfect way for India to reduce foreign debt stocks is by increasing productivity by venturing more into the manufacturing sector. The labor markets could diversify into construction and public utilities by which in the long run would lead to more productivity, increasing the Gross Domestic Product.

Bosworth, B., & Collins, S. M. (2008). Accounting for growth: comparing China and India. Journal of Economic Perspectives22(1), 45-66.

Kumar, R., & Worm, V. (2004). INSTITUTIONAL DYNAMICS AND THE NEGOTIATION PROCESS: COMPARING INDIA AND CHINA. International Journal of Conflict Management15(3).

Robert F. Arnove, “A Comparison of the Chinese and Indian Education Systems,” Comparative Education Review 28, no. 3 (Aug. 1984): 378-401.


Dougherty, Sean & Vittorio, Valli. (2009). Comparing China and India: an Introduction. The European Journal of Comparative Economics. 6.


Siraj, M. ( 2011) China and India: A comparative analysis of their integration into the global economy, Real-world economics  review, 60-67

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