China And India Case Study

1002 Words 4 Pages
India and China have both experienced a high growth of GDP since the 1940s, India averaging at 8% per year and China at 10%, propelling them onto the global stage as the foremost rising economies of the Global South. Yet, such economies gains do not necessarily translate into equal improvements of the human development factors. Rise in GDP more directly relates to an increase in government funds and while this certainly may help government improve public resources and quality of life for their citizens, it is not in itself a path towards development. In education, for example, India underinvests in primary schools, while overinvesting in tertiary education. As a consequence, the average years of schooling in India are a meager 4.4 years and …show more content…
While both greatly benefit from increased capital flows, FDI has been much more prominent in China than in India. Moreover, while China’s growth stems from heavy industrialization and manufacturing while India primarily relies on exportation via the service industry. In China’s case, rapid economic growth can be attributed to its export-led growth model that prioritizes industrialization, state planning, and direct foreign investment. Despite its isolationist and protectionist past, China has since pursued policies like the creation of special economic zones and export-processing zones that incentivize foreign direct investment by offering low regulation and financial incentives. Today, China accounts for one third of global economic growth. Despite the opening up to foreign companies, China’s key industries remain controlled by state-owned enterprises. In recent years, China exports more high tech products in addition to its low and medium tech products. Although China embraces a variety of capitalistic policies, it adheres to communist ideology and rules with an iron fist, resulting in oxymoronic combination, sometimes referred to as …show more content…
India’s exports, however, are primarily through the service industry. While India’s IT services account for 51% of GDP (2014 est.), it accounts for less than 30% of employment (India, CIA World Fact Book). India’s focus on the IT sector led to a neglect of the low wage manufacturing and unorganized sector jobs—which is where the majority of its citizens find employment. The agricultural sector is responsible for 51% of jobs in India. Yet as disinvestment made the industry outdated and ineffective, agriculture accounts for just 18% of GDP. Similarly, India’s manufacturing sector remains a low wage industry and thus failed to become a significant portion of GDP. Those who benefit from the IT sector—the middle class—experienced tremendous growth, yet there is little advancement for its poorest populations, often marginalized by their caste status. Lack of opportunity in the manufacturing sector coupled with agricultural disinvestment contributed to India’s inability to improve HDI and its deep inequality. Conversely, China has seen a remarkable transition from a primarily agrarian society to an industrialized urban population. This transformation, however, has not resulted in improvements for all Chinese citizens as rural-urban inequality persists. While China and India’s models of export-led growth have led to continually high annual GDP and are significant different in their approaches, both exclude certain social groups from the

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