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China and India - A Tale of Two Trade Integration Approaches

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  • Przemyslaw Kowalski

    (Indian Council for Research on International Economic Relations)

Abstract

The comparison of the key features of trade integration processes and the economic outcomes in China and India reveals that while much has already been achieved in both these economies, the Chinese reforms, especially with respect to manufacturing trade, have gone further and that this is likely one of the key determinants of better economic performance of China. Still, Chinas integration process so far remains characterized by a certain duality. On the one hand the opening up of trade and FDI in manufactured goods has spurred the emergence of a largely private sector. On the other hand the high level of public ownership and important regulatory barriers continue to dominate the services sectors. India has gone a long way in reducing its tariffs on non-agricultural products as well as selected non-tariff barriers but moderate protection still persists which likely adds to the hurdles faced by the Indian manufacturing sector. India has revealed a comparative advantage in certain segments of the services sector but its services trade policy is still very restrictive, even as compared to China. More generally the extent of liberalisation achieved so far in India and the outcomes it brought about suggest that the remaining goods and services trade barriers are just but one item on the list of reforms that India needs to tackle in order to promote trade-led expansion of more labour-intensive activities.

Suggested Citation

  • Przemyslaw Kowalski, 2008. "China and India - A Tale of Two Trade Integration Approaches," Trade Working Papers 22170, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:tradew:22170
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    File URL: http://www.eaber.org/node/22170
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    References listed on IDEAS

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    1. Michael Engman & Osamu Onodera & Enrico Pinali, 2007. "Export Processing Zones: Past and Future Role in Trade and Development," OECD Trade Policy Papers 53, OECD Publishing.
    2. Matthieu Bussière & Arnaud Mehl, 2008. "China's and India's roles in global trade and finance - twin titans for the new millennium?," Occasional Paper Series 80, European Central Bank.
    3. Takeshi Koyama & Stephen S. Golub, 2006. "OECD's FDI Regulatory Restrictiveness Index: Revision and Extension to more Economies," OECD Working Papers on International Investment 2006/4, OECD Publishing.
    4. Mehl, Arnaud & Bussière, Matthieu, 2008. "China's and India's roles in global trade and finance: twin titans for the new millennium?," Occasional Paper Series 80, European Central Bank.
    5. Malory Greene & Nora Dihel & Przemyslaw Kowalski & Douglas C. Lippoldt, 2006. "China's Trade and Growth: Impact on Selected OECD Countries," OECD Trade Policy Papers 44, OECD Publishing.
    6. Przemyslaw Kowalski & Nora Dihel, 2009. "India's Trade Integration, Realising the Potential," OECD Trade Policy Papers 88, OECD Publishing.
    7. Betina Dimaranan & Elena Ianchovichina & Will Martin, 2009. "How will growth in China and India affect the world economy?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 551-571, October.
    8. L. Alan Winters & Shahid Yusuf, 2007. "Dancing with the Giants: China, India, and the Global Economy," World Bank Publications, The World Bank, number 6632.
    9. Hildegunn Kyvik Nordås & Sébastien Miroudot & Przemyslaw Kowalski, 2006. "Dynamic Gains from Trade," OECD Trade Policy Papers 43, OECD Publishing.
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    Cited by:

    1. Bagaria, Nidhi & Santra, Swarup & Kumar, Rajesh, 2014. "A study on variation in comparative advantage in trade between China and India," MPRA Paper 53287, University Library of Munich, Germany.

    More about this item

    Keywords

    China; India; manufacturing; Services; trade barriers; trade policy;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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