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Red Dragon and Yellow Elephant

India and china economy comparision

With the rise of two Asian infants into the scene of globalization, has created concerns over the world. As today’s most known economic publishing houses are fantasizing the growth of the famous Yellow Elephant (India) and the Red Dragon (China) into economic giants, but critics still say we are far behind.

China has a share of 6 percent of total global exports. With built-in infrastructure and trained labor force it is ruling out good score of manufacturing companies’ world over. In the world market china has a recordable share of manufacturing industry which tops its commodity exports. China benefits from being the member of the WTO, which makes its export reachable to distant nations. But the challenges remain. With the latest case of Mattel Toy Company striking against toys produced in china and lots of counterfeit including the Johnson & Johnson’s diabetes test kits, Chinese government has yet to prove itself. For reassurance, we can say that the problem of counterfeit and quality degradation of some products can be possible with developed countries, recent example of Matshushita electric which produced 46 million mobile phone batteries of Nokia Phones were harmful, Sedans made by Honda and Notebook batteries made by Sonic and Civic were faulty.

Again, responsible companies like Nokia warned their users for using the deadly batteries and replaced all of them. This is something our red giant must understand and create rules to assure remedy of reoccurrence of the same fault again and again; also avoid overcastting of these cases to local media.

India has a profound democratic background which can be considered as it’s backbone for long run development. Though, in the short run it has problems of unemployment and about 60 percent of total Indian is farmers. This is 50 percent in China. India has about a million IT professionals working as a back office for the world. Strong private sector and creative manpower has created a good leap in the economy of India, which enjoys 4.5% growth rate.

Although India is not a global sourcing hub on the same scale as China, in product segments such as generic drugs, the country serves as a pharmacy to the world. Thus the Indian pharma industry needs to be cautious about the quality of the drugs it exports. Unlike china India lacks infrastructure and still behind china regarding this. Though some effort has been done in this regard, they are still insufficient. India contributes less than one percent of the world trade compared to China that has six percent share.

China has a weak private sector and the Chinese banks have burdens of Bad Loans; whereas in India capital is said to be used more efficiently in India than in China.

According to the World Bank, to start a business requires in India 71 days and in China 48 days.

India also enjoys to do well liberal eye towards press freedom whereas, according to Reporters Sans Border china is “Biggest prison on earth” for journalists. This also affects the government policies and the no-question policy will be least supported.

Yet there are years to come, but the debate of who will win the race will go on forever until next decade.
Published: 2007-09-23
Author: Tushar Neupaney

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