India and China
Chapter 3
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Balance of Payments from a Comparative Perspective: China, India, and Russia under Globalization
Akira Uegaki
Introduction
The three regional powers of China, India, and Russia have been actively participating in international trade and international financing recently, although they have large populations, huge territories, and abundant natural resources,1 which would enable them to be independent and autarkic. The globalization movement especially since the ’90s has undoubtedly made their attitudes possible, but on the other hand, the fact that the three regional powers have sailed out on the world market itself has made today’s globalizing trend as a whole stronger and faster. The purpose of this paper is to clarify each country’s similarities and peculiarities in their international financing in a globalizing economic situation by using balance of payments statistics.
Weight of External Economic Transactions in Each Economy
Before analyzing balance of payments statistics, we must examine the size of the external economic transactions of each economy. The simplest way to calculate this is to research the ratio of “openness.”2 According to Fig. 1, the ratio of China and India has been increasing rapidly in the new century, whereas the Russian ratio has stagnated recently after reaching its highest point in 1999. However, we must not exaggerate this contrast because the ratio has always been relatively higher in China and Russia than in India. Table 1 compares the ratio of the three countries with other developed industrial countries. Here, we can see that China and Russia are different from another huge country, the USA, from the viewpoint of “openness.” While the USA is a rather autarchic county, China and Russia are as highly involved in the international economy as Germany. As for India, it is unique in the sense that it has recently been rapidly strengthening its involvement
__________________________________________________________
Balance of Payments from a Comparative Perspective: China, India, and Russia under Globalization
Akira Uegaki
Introduction
The three regional powers of China, India, and Russia have been actively participating in international trade and international financing recently, although they have large populations, huge territories, and abundant natural resources,1 which would enable them to be independent and autarkic. The globalization movement especially since the ’90s has undoubtedly made their attitudes possible, but on the other hand, the fact that the three regional powers have sailed out on the world market itself has made today’s globalizing trend as a whole stronger and faster. The purpose of this paper is to clarify each country’s similarities and peculiarities in their international financing in a globalizing economic situation by using balance of payments statistics.
Weight of External Economic Transactions in Each Economy
Before analyzing balance of payments statistics, we must examine the size of the external economic transactions of each economy. The simplest way to calculate this is to research the ratio of “openness.”2 According to Fig. 1, the ratio of China and India has been increasing rapidly in the new century, whereas the Russian ratio has stagnated recently after reaching its highest point in 1999. However, we must not exaggerate this contrast because the ratio has always been relatively higher in China and Russia than in India. Table 1 compares the ratio of the three countries with other developed industrial countries. Here, we can see that China and Russia are different from another huge country, the USA, from the viewpoint of “openness.” While the USA is a rather autarchic county, China and Russia are as highly involved in the international economy as Germany. As for India, it is unique in the sense that it has recently been rapidly strengthening its involvement