Political scientists since the 1960s have noted that either China and India would provide the political model for other emerging nations or the Third World.
Is it a platitude that the 21st Century will belong to China? China won the battle.
Bill Emmott, former editor of The Economist, and someone who has been based in many countries in the region, and knows them intimately, rightly points out that when you simply say that the Asia region will have a profound impact on the course of the coming century, you are coming much nearer to the likely truth.
With the vastly different political models of China and India, China has prevailed. Many conservatives were hoping it would be the other way around, because India with it class (caste) system and capitalistic model is more like the US than China.
Although conservatives like to attack Russia and still refer to Russia as the Soviet Union, it is no longer a communist country. However, China is , but it did not make the hard ideological mistakes that Russian's made. The Chinese established diplomatic relations with the US under the Nixon era and established free trade zones. The Chinese also privatized many of its state owned industries. China now has a mixed economy that is thriving. The Chinese government considers the country to be in the first phase of communism.
India has been successful too
Both India and China have large populations, low incomes and rapidly rising GDP, yet the composition of their growth has been quite different.
A recent paper* by Barry Bosworth and Susan Collins, of the Brookings Institution in Washington, DC, explores the sources of expansion in both countries, breaking down total GDP growth into increases in inputs of labour and capital, and gains in Total Factor Productivity (TFP). In the period 1993-2004, China's GDP grew by an average of 9.7% a year, India's by 6.5%.
Employment increased faster in India than in China, but this was more than offset by a much slower rise in output per worker: only 4.6% a year, compared with 8.5% in China . . .
Contrary to the popular claim that China's TFP growth has slowed, the authors find that it has accelerated from a pace of 3.6% in 1978-93.
These figures challenge the conventional wisdom that China's growth is more dependent than India's on investment than on efficiency gains.
During the past decade TFP has in fact accounted for a bigger slice of GDP growth in China than in India. Thanks to economic reforms, India's TFP growth has improved from its paltry 0.2% a year in the 1960s and 1970s before the economy was opened up, but it is still much slower than in China . . .
The relative performance of the two countries varies by sector (see right-hand chart). In agriculture, China has enjoyed much faster productivity growth . . . In 1978 it accounted for 71% of workers in both India and China. Now the respective figures are 57% and 47% . . .
According to conventional wisdom, Chinese workers have shifted largely from farming to factories, whereas India's growth has been driven largely by services, from call centres to writing software.
In fact, jobs in services have expanded more strongly in China than in India. Since 1993 the rate of increase of China's service-sector jobs has been four times that in industrial jobs and has exceeded that in India.
China's real output of services has not only grown almost as fast as its industrial output, but also faster than India's services.
* “Accounting for Growth: Comparing China and India”
sources: http://upiasia.com/Bookshelf/908/ and http://neweconomist.blogs.com/new_economist/2007/01/china_india_2.html
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Bill Emmott, former editor of The Economist, and someone who has been based in many countries in the region, and knows them intimately, rightly points out that when you simply say that the Asia region will have a profound impact on the course of the coming century, you are coming much nearer to the likely truth.
With the vastly different political models of China and India, China has prevailed. Many conservatives were hoping it would be the other way around, because India with it class (caste) system and capitalistic model is more like the US than China.
Although conservatives like to attack Russia and still refer to Russia as the Soviet Union, it is no longer a communist country. However, China is , but it did not make the hard ideological mistakes that Russian's made. The Chinese established diplomatic relations with the US under the Nixon era and established free trade zones. The Chinese also privatized many of its state owned industries. China now has a mixed economy that is thriving. The Chinese government considers the country to be in the first phase of communism.
India has been successful too
Both India and China have large populations, low incomes and rapidly rising GDP, yet the composition of their growth has been quite different.
A recent paper* by Barry Bosworth and Susan Collins, of the Brookings Institution in Washington, DC, explores the sources of expansion in both countries, breaking down total GDP growth into increases in inputs of labour and capital, and gains in Total Factor Productivity (TFP). In the period 1993-2004, China's GDP grew by an average of 9.7% a year, India's by 6.5%.
Employment increased faster in India than in China, but this was more than offset by a much slower rise in output per worker: only 4.6% a year, compared with 8.5% in China . . .
Contrary to the popular claim that China's TFP growth has slowed, the authors find that it has accelerated from a pace of 3.6% in 1978-93.
These figures challenge the conventional wisdom that China's growth is more dependent than India's on investment than on efficiency gains.
During the past decade TFP has in fact accounted for a bigger slice of GDP growth in China than in India. Thanks to economic reforms, India's TFP growth has improved from its paltry 0.2% a year in the 1960s and 1970s before the economy was opened up, but it is still much slower than in China . . .
According to conventional wisdom, Chinese workers have shifted largely from farming to factories, whereas India's growth has been driven largely by services, from call centres to writing software.
In fact, jobs in services have expanded more strongly in China than in India. Since 1993 the rate of increase of China's service-sector jobs has been four times that in industrial jobs and has exceeded that in India.
China's real output of services has not only grown almost as fast as its industrial output, but also faster than India's services.
* “Accounting for Growth: Comparing China and India”
sources: http://upiasia.com/Bookshelf/908/ and http://neweconomist.blogs.com/new_economist/2007/01/china_india_2.html
Subscribe to the Rightardia feed: feeds.feedburner.com/blogspot/IGiu
Netcraft rank: 8549 http://toolbar.netcraft.com/site_report?url=http://rightardia.blogspot.com
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