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Comparative Attractiveness Of China And India

2374 words - 10 pages

1. Introduction
In 2001, one of the economies in Goldman Sachs – Jim O’Neill – wrote an economic research paper “Building Better Global Economic, BRICs”, in this report, O’Neill listed four countries with their initial letters combined being BRIC – Brazil, Russia, India and China – as the world’s fastest developed economies that can be considered as the most promising emerging markets in the world. Latter the BRICs become BRICS with South Africa joining the group, together the five BRICS countries had represented approximately 3 billion people and a combined nominal GDP being US$ 14.8 trillion and US$ 4 trillion in combined foreign reserves (IMF 2013). However, within the five BRICS ...view middle of the document...

The two countries all have similar rates growing trends for the economies, and in considering of the GDP growth rates the two countries were merely kept the same with each other (Bazi and Firzli, 2011). Besides of that, the two countries are having very similar social conditions – majority of the consumptions made through households, wealth gaps are large, and sense of social classes is strong (Yin, 2012). The only thing that might be different would be the two countries’ legal systems, as China has the government interfering in the national economies much more than the Indian government, with the special political systems of China (Wang, 2011).
Therefore, based on the above discussions, the following analysis for the two countries economic, social and legal conditions would be focus on analysing the similarities and differences, so that the appropriate recommendations can be made for the businesses in Australia that are waiting for expanding to the either or both of the two countries.

3. Comparative Analysis
As mentioned above, the comparative analysis would involve the analysis for the economic, social and legal conditions of the two countries.
3.1 Economic Conditions
In comparing the economic conditions between China and India, the GDP growth can be used to find out the economic growth of the two countries, the inflation rate can be used to find the stability of the two economies, whilst the currency can show the risks for international trades between the two countries.
GDP Growth
Based on the statistics shown on World Bank (2013), the GDP growth of the two countries from 2007 to 2011 (data for 2012 was not confirmed yet) can be depicted in the following table:
Table 1: GDP Growth of China and India (2007 – 2011)

Based on the above table it could be identified that in general the real GDP of China and India are growing in general in the recent five years, but it could also clearly identified that the gap between the GDP of China and India is also growing, in 2007, the real GDP of China is approximately 3 times of that for India, whilst in 2011 the GDP of China is approximately 5 times of that for India, indicating a faster growth of Chinese economies. Besides of that, the GDP growth of China is remained in the level of 9 – 10% in the recent five years, whilst the GDP growth of India is stably maintained at the level of 7 – 9%, averagely 1 – 2% lower than that of China. In considering of the GDP per capital, India is having much higher speed of growth that of China, showing that the living standards of Indian citizens are improving faster than that of China.
According to the data shown on the World Bank’s database (2013), the inflation rate of India and China can be shown in the following table:
Table 2: Half-year Inflation Change in China and India (2008 – 2011)

From the above table it could be identified that in considering of the inflation rates, India is having much higher inflation internally than...

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