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Comparative Economic Performance in China and India

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  • Weede Erich

    (University of Bonn, Germany)

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    Abstract

    Together, China and India account for almost two fifths of mankind. In purchase power parity terms the Chinese economy is the second largest in the world ahead of Japan, and the Indian economy is the fourth largest ahead of Germany. In less than two decades these two big Asian economies together might account for a quarter of the global product. Currently, however, both countries are still poor.Both countries might outgrow poverty, because potential advantages of backwardness as well as fairly strong domestic investment favor growth. Concerning human capital formation China and India differ. China is much better than India in primary school education. Eradication of analphabetism is in sight in China, but far in the future in India. India, however, is much stronger in tertiary education than China. Another major difference between China and India is their degree of integration in the global economy. China benefits much more from the global division of labor than India does. China attracts much more foreign direct investment, too.In the past fifty years, Chinese economic performance was superior to the Indian performance. Nevertheless I reject the interpretation that either China’s autocracy or China’s communist ideology is responsible for China’s better performance. China started to grow faster than the global economy only after Deng Xiaoping liberalized and opened up the economy. Under Mao Zedong and during the great leap forward more than 30 million Chinese starved to death. Similar disasters did not happen in poorer India. If China and India teach a lesson about the impact of regime characteristics on growth, it is the following: Democracy promotes performance quite similar to the global average, autocracy as a constitution of arbitrariness permits much better performance or much worse performance.In the long run, the growth prospects of both China and India depend not only on their own economic policies, but also on Western readiness to take their exports. Open Western markets together with sensible policies in China and India may promote global prosperity and peace.A eux deux, la Chine et l’Inde représentent deux cinquièmes de l’humanité. En termes de capacité de pouvoir d’achat comparé, l’économie chinoise est la deuxième plus grande au monde, devant le Japon, et l’économie indienne est la quatrième plus grande, devançant l’Allemagne. Dans moins de deux décennies, ces deux gigantesques économies asiatiques pourraient représenter conjointement un quart du produit global. Aujourd’hui cependant, ces deux pays sont toujours pauvres.Les deux pays pourraient surmonter la pauvreté car les potentialités que recèle un retard économiq- ue ajoutées à un investissement intérieur relativement soutenu favorisent la croissance. En ce qui concerne la formation du capital humain, des différences existent entre la Chine et l’Inde. La Chine est meilleure que l’Inde dans le domaine de l’éducation primaire. L’éradication de l’analphabétisme semble être en vue en Chine mais est loin d’être une partie gagnée en Inde. A l’inverse, l’Inde devance la Chine dans le domaine de l’éducation tertiaire. Une autre différence majeure entre la Chine et l’Inde concerne leur degré d’intégration dans l’économie globale. La Chine bénéficie davantage de la division globale du travail que l’Inde. De plus, la Chine attire plus d’investissements directs de l’étranger. Durant les cinquante dernières années, la performance de l’économie chinoise a été supérieure à celle de l’Inde. Néanmoins, l’auteur rejette l’interprétation suivant laquelle ce serait ou l’autocratie chinoise ou l’idéologie communiste qui serait à l’origine de cette supériorité. La Chine commença à croître plus rapidement que l’économie globale seulement après que Deng Xiao Ping a libéralisé l’économie chinoise et ouvert ses frontières. Sous le règne de Mao Tsé Tung, et durant le “grand bond en avant”, plus de 30 millions de chinois sont morts de famine. De tels désastres n’ont pas été observés en Inde qui est relativement plus pauvre. Si une leçon peut être tirée des expériences chinoise et indienne à propos de l’impact des caractéristiques des régimes sur la croissance économique, c’est la suivante : la démocratie promeut des performances assez identiques à la moyenne globale, et l’autocratie en tant que constitution de l’arbitraire donne lieu à des performances bien meilleures ou bien pires. A long terme, les perspectives de croissance de la Chine et de l’Inde dépendent non seulement de leurs propres politiques, mais aussi de la volonté des pays occidentaux de digérer leurs exportations. Des marchés occidentaux ouverts et des politiques intelligentes en Chine et en Inde peuvent promouvoir la prospérité et la paix au niveau global.

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    Bibliographic Info

    Article provided by De Gruyter in its journal Journal des Economistes et des Etudes Humaines.

    Volume (Year): 11 (2001)
    Issue (Month): 1 (March)
    Pages: 1-17

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    Handle: RePEc:bpj:jeehcn:v:11:y:2001:i:1:n:13

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    Cited by:
    1. Felipe, Jesus & Laviña, Editha & Fan, Emma Xiaoqin, 2008. "The Diverging Patterns of Profitability, Investment and Growth of China and India During 1980-2003," World Development, Elsevier, vol. 36(5), pages 741-774, May.

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