India and China

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India and China
Comparison of Global Trade and Finance

Rise of the Asian Tigers

Section S6 - Group 7: Akrati Bhargava (12DM-018) Anant Modwal (12FN-012) Pushpak Roy (12DM-105) Priyanka Jain (12DM-103) Shweta Bhalla (12FN-124) Soumya Roy (12FN-131)

INDEX
1. 2. 3. 4. 5. 6. ABSTRACT INTRODUCTION RELEVANCE OF INDIA AND CHINA IN GLOBAL ECONOMY CHINA’S AND INDIA’S ROLE IN GLOBAL TRADE CHINA’S AND INDIA’S ROLE IN GLOBAL FINANCE REFERENCES

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Abstract In today’s modern world India and China are forerunners for the multinationals who are out to exploit low cost highly skilled work forces in these countries or vie for products and services from these two fastest growing markets in the world. China holds more than $1 trillion in its treasuries which cash starved multinationals are trying to make use of finances for investment The rapid rise of these two Asian giants who have combined population of more than 2.4 billion comprising 40% of total and are now racing towards becoming economic super powers is catching attention everywhere. Over the last few decades there has been gradual shifting of economic power centre from the West towards the East. India and China are the world's future major powers. At a time when in a global economy, affected by the financial crisis, most advanced countries are going into recession, both India and China are marching ahead. Both these nations have an important role in the world economy, with China embracing private enterprise and India helping globalization within its economy. Since 1980 Both India and China have recorded strong economic growth and are opening up to international trade and capital. The Indian and Chinese economies have benefited from FDIs that have provided new goods and services leading to a surge in industrial growth. The Chinese and the Indian economies are regarded as the fastest growing economies in the world today Growth of the China's economy has been more impressive than India. China's per capita GDP growth has averaged 8% since 1980, which is twice that of India's per capita GDP growth rate. The Chinese economy is also much larger than the Indian economy. Labour-intensive manufacture exports contribute almost 40% to the Chinese GDP as compared to 16% in India.

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INTRODUCTION There are possibly few issues that academics, policy-makers and market participants alike regard as new chapters in history. The emergence of China and India is probably one of them. In a very short space of time, the body of literature analyzing these two economies has grown almost exponentially. The reasons underlying this rapidly increasing interest are twofold. From a domestic perspective, China and India constitute unprecedented stories of economic development. Owing to vibrant growth rates in the last decade, they have already reached heavyweight status in the global economy. Indeed, after adjusting for the price of non-tradable. India is already the fifth largest economy, just behind Japan, while China is the world’s second largest economy, still behind the US but ahead of the euro area (see Chart ).

CHART : PPP SHARE IN WORLD GDP IN 2012 (SOURCE WWW.NATIONMASTER.COM)

The determinants of rapid development – and whether it can be sustained in the longer run – are important research and policy issues. The findings of a number of studies in respect of China’s and India’s long-term growth prospects have indeed been startling. According to one such study by 2050 China and India will regain their pre-industrial revolution status as the world’s first and third largest economies at market prices. From a global perspective, China and India are poised to play a key role in four of the most pressing policy debates of recent years. First, China’s large current account surplus and accumulation of hefty foreign reserve assets are inherently associated with discussions on global imbalances. Second, strong growth in China and India, together with other emerging economies,...
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