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Development Path of China and India and the Challenges for their Sustainable Growth

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  • Li, Yuefen
  • Zhang, Bin

Abstract

The segmentation of global manufacturing and services provided China and subsequently India with a golden opportunity to make full use of their absolute advantage?low cost yet educated labour?to integrate into the world economy within a comparatively shorter period of time than some earlier industrialisers. Though international trade functioned as a vent of surplus in view of the narrowness of their domestic markets at the beginning of their economic catch-up, the label of export-led model may not reflect the real picture as imports underwent dramatic increases during their respective growth periods, in particular for China. Foreign direct investment has played a pivotal role in their economic growth and has major presence in international trade and investment in leading sectors of both countries, giving rise to certain special features and weak links for their economic expansion and sustainability of fast economic growth. To maintain more broad-based, fast and balanced growth, it seems that both countries have to redress sectoral imbalances, encourage technology upgrading and cope with future changes in demographic profiles which constituted a trigger to fast economic growth at the time of their respective economic reform.

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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2008/37.

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Length: 14 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:unu:wpaper:rp2008-37

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Keywords: China; India; development;

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  1. Andrew Mason, 2001. "Population Change and Economic Development: What Have we Learned from the East Asia Experience?," Working Papers 200103, University of Hawaii at Manoa, Department of Economics.
  2. Cooper, Richard, 2005. "A Half-Century of Development," Scholarly Articles 3677048, Harvard University Department of Economics.
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