By Sebastien Anderson
Newly Industrialized Countries (NIC’s) have become increasingly industrially robust. As a result, it can be argued that NIC’s have used a set of economic requisites to achieve success in the 20th century. Selected countries in this grouping have realized newfound industrialization as the result of their political governing approach and have applied the same political development policies towards international involvement but it is not a necessity for industrialization. Using NIC’s China and India as leading examples, this essay will deliberate that there are specific economic requisites required by NIC’s for prosperity, but that liberal democracy, or any other governing form, is not a political requisite for NIC’s. China and India are the top NIC’s in term of GDP and GDP growth (OECD, 2012). They also possess the two largest populations in the world. They are considered newly industrialized countries because they both have experienced extensive growth in GDP every year since 1980’s (China almost reached a 10% annual growth in the last decade) (OECD, 2012). Both countries govern using different political systems. During its post-colonial era, India’s rule has been based on liberal democracy for the most part. China on the other hand is a single party-state currently governed by the Communist Party of China. While their political ideology is different, these two countries have been able to find prosperity using similar economic requisites that has allowed them to adapt to the rise of an interactive global economy. The adaption to the global economy for India and China, who were once known for their agricultural production, is their recognition that they hold interest for corporations in developed countries due to their cheap labor and growing consumer markets. By liberalizing their trade agreements and encouraging foreign investment, they have become a favored center of outsourcing for Western corporations.
Within this section, an analysis on the history of high economic development period of India and China will properly outline the requisites required in the industry. Newly industrialized countries like India and China have spiked a high interest developed countries corporations in terms of foreign investment. During the 19th century, they received a flood of foreign investment brought on by the opening of a previously closed economy in both states. This was perfectly timed as developed countries were encouraged to pursue and support their export capacity (McCormick, 2007). India and China both possess vast populations that help to support consumerist interest of trans corporations within the states as well. More specifically, the Chinese and Indians are also a source of inexpensive labor, making these two countries a prime target for investment, particularly in the manufacturing sector. Cutting out competitive wages and union issues, corporations are able to exploit China and India for cheap labor through sweatshops, resulting in greater manufacturing output. This translates into lower priced goods, thus resulting in an increase of consumerism in industrialized countries. This has created an abundance of investment from developed and developing countries, allowing China and India to thrive from the benefits of foreign interests (McCormick, 2007). For the first time, foreign direct investment in China within the first six months of 2012 surpassed that of the United States, seeing an in flow of $59.1 billion US (for China) compared to $57.4 billion US (for US)(OECD, 2012). In 2011, the United States also led the world in foreign direct investment outflows (i.e., investment in other countries such as India and China), spending $419 billion (OECD, 2012). This achievement is monumental as for the last century the United States has dominated global foreign investment because of their seemingly...