| Since the late 1970s and the early 1980s, China and India, which are the two largest developing countries, have speeded up the process of economic development and made remarkable economic achievements. According to the theory of the stage of economic growth which was put forward by the famous American economist Walt Whitman Rostow, this period of economic development belongs to the stage of economic take-off. At this stage, both China and India have generally experienced three basic processes, that is, the transformation of economic system, the transformation and upgrading of economic structure and industrial structure as well as the changes in foreign economic relations. Based on Rostow's theory of economic take-off and three basic processes mentioned above, this dissertation applies the theoretic tools, such as the economic transformation, dual economic structure transformation and foreign economic relations, to conducting a comprehensive comparison between China and India in terms of the economic transformation and development pattern at the stage of economic take-off.Firstly, this dissertation is devoted to analyze the similarities and differences between China and India before the stage of economic take-off from the aspects of resource endowment, economic system and economic level. Resource endowment is divided into natural and human resources. In terms of the natural resource, India's cultivated area is larger than China, but China's total area of agricultural land is far more than India. Besides, China has certain advantage on water resources and mineral resources. However, India's important mineral resource, i.e. iron ore, is easy to develop and its quality is better than that of China despite that the reserves is inferior to China. In terms of the human resource, on the one hand, China's total population is slightly higher than India, but the disparity between the two countries reduces day by day. On the other hand, India's age structure is comparatively younger than China, but the overall quality of China's population was apparently higher than that of India. Overall, China and India are close to each other on the aspect of resource endowment and China has slighter superiority than India. From the point of view of economic system, both China and India belonged to the planned economy system before the reform, of which China was a highly centralized planned economy while India was a semi-controlled planned economy. Both systems have big similarities as well as obvious differences. The major differences can be illustrated as follows: first, China was basically a sole public ownership system while India implemented a mixed ownership system in which various economic sectors coexist. Second, China conducted a comprehensive control on the price, while India mainly regulated the price by market regulation. Third, both countries gave priority to the development of heavy industry, but China was more prominent in this aspect. Fourth, the reform to the land management system of countryside in China was more thorough than that in India. Last, China is more stringent than India on the aspects of carrying out the import-substitution strategy in the principle of self-reliance and restricting the foreign economic relations. In terms of the economic level, in the early 1980s, the whole economic levels of China and India were almost the same. However, China's industrial and agricultural production value was obviously higher than India while India's service industry developed faster than China.Secondly, a comprehensive comparison is conducted on the transformation and development pattern of China and India at the process of economic take-off and it is carried out from the aspects of the transformation of economic system, the transformation and upgrading of economic structure and industrial structure, and the changes of foreign economic relations.The transformation of economic system is analyzed from the following three aspects: the basic concepts of economic transformation, the basic modes of economic transformation, and ownership reform. Both countries have many similarities as well as obvious differences in the above three aspects. In regard to the basic concepts of economic transformation, both countries emphasize the liberalization of economy, set the common development of different systems of ownership and market economic system with orderly competition as the goals of economic transformation, and enhance the economic power through opening to the outside world and participating in the global competition. However, China emphasizes the principal status of the public ownership economy in the whole transformation process, while India explicitly gives up the dominant position of the public ownership economy at the beginning of transformation. China clearly put forward the development concept which allows a small number of people and regions getting rich first, but India has always stressed the humanization of economic reform. In regard to the basic modes of economic transformation, since the beginning of the economic transformation, both countries have not taken the radical privatization measures and have maintained the political stability instead of dramatic changes of the political system. However, in the process of economic transformation, China has undergone a long period of incremental reform with trial reform outside the system, while India has basically carried the whole work forward since the very beginning of economic transformation. In order to maintain the economic stability, China has implemented a large number of transition policies with differential treatment in the process of economic transformation and the similar policies in India are much less than China. In addition, the degree of China's economic transformation is obviously higher than that of India. In regard to the ownership reform, both countries take primary efforts to create favorable conditions for the development of private sectors so as to ensure that the private sectors have equal competitive opportunities with the public economic sectors. In terms of the state-owned enterprises reform, both countries focus on the enhancement of the enterprise's competitive ability instead of the simple privatization of property right. Besides, China and India have great consistency in the modes of strengthening the competitive ability of state-owned enterprises. Both countries take the following three points as the basic modes: enlarging the right of self-management, hardening the enterprise budget constraints and the diversification of equity. However, China instead of India keeps deepening the reform unceasingly in the process of ownership reform. The reform of private economic sectors in India is comparatively thorough, which helps the private sectors quickly obtain the equal competitive status with public-operated sectors. The reform of China's private economic sectors is always subject to certain restrictions either in theory or in practice. Therefore, the private economic sectors have not realized the same competition status as the state-owned enterprises. Chinese state-owned enterprises have achieved bigger successes than India and the degree of reform is apparently higher than that of India.The transformation of economic structure is discussed from two aspects: the leading industry and the agricultural development modes. China and India have distinct differences in the above two aspects. First, China's leading industry is manufacturing while India's leading industry is software, and the reasons can attribute to the differences of industrial policies adopted by the two governments as well as the different development potentials of industries, that is, China is equipped with the development of manufacturing while India have potential for the development of the software industry. However, more labor is demanded for manufacturing than that for software industry, which results that China has stronger pulling force in the transformation of dual economic structure than India. Second, under the family contract responsibility system, it is difficult for China to speed up the industrialization and ensure the food security at the same time. Comparing with China, India's land system is more flexible. Nevertheless, the quality of India's rural population is too low to transfer the rural population to modern industries. In short, the pulling force of China's leading industry on enhancing the transformation of economic structure is stronger far than that of India, so China has achieved a bigger success in the transformation of economic structure. At present, both China and India are experiencing some changes on the aspects of the industrial policies and agricultural polices of the modern sectors. On the one hand, China pays more attention to capital and technology-intensive industry with high technology, while India changes to develop the manufacturing industry. On the other hand, China proposes the new rural reconstruction, while India brings forward"the Second Green Revolution". These changes may bring about great changes for the situation of the transformation and upgrading of economic structure and industrial structure in both China and India. In China, the transformation of economic structure, industry transformation and the upgrading of industrial structure may be conducted simultaneously. India is likely to return to the path of general national industrialization. Specifically, India will first realize the transformation of dual economic structure on the basis of the labor-intensive light manufacturing and the general service industry, and then move from labor-intensive industries to capital and technology-intensive industries.The changes in foreign economic relations can be reflected from several aspects, such as the basic strategies, foreign trade, utilization of foreign capital and foreign investment. In regard to the basic strategies of foreign economic relations, both countries changed the import substitution strategy into export-oriented strategy and emphasized their own comparative advantages. However, the degree of India's opening to the outside world is obviously lower than that of China. Although both countries emphasized that the policy of opening to the outside world must be carried out on the basis of self-reliance, China paid more attention to the opening-up policy while India focused on the protection of domestic national industries. Besides, China stressed the hierarchy of opening-up policy, and the implement of its opening-up policy at the special economic zones has achieved greater effect than India. In regard to the foreign trade policy, both countries are constantly moving toward liberalization and adopt the policy of easing the restrictions on import as well as encouraging export. However, comparatively speaking, India takes more efforts on the protection of the domestic market than China, while China's policies on encouraging exports are more powerful. Moreover, China's foreign trade scale is larger than that of India. However, the types of trading in India are better than that of China, because China mainly relies on processing trade while India depends on the general merchandise trade. In the foreign trade structure, each has some strong points. India's services trade proportion in foreign trade is higher than that of China, while China's industrial finished products proportion is higher than India. In regard to the utilization of foreign capital, China attracts more foreign capital than India. The foreign capital mainly flows to manufacturing in China and service industry in India. China has made great achievements in export and earning foreign exchange as well as increasing employment opportunities by using foreign capital, while India's foreign capital is used more effectively in offsetting budget shortage and introducing technology. In regard to the foreign investment, the overall scale of China's foreign investment is larger than India, but the degree of India's foreign investment is higher than that of China. China's foreign investment subject is state-owned enterprise while India's foreign investment subject is private enterprise. Besides, China mainly invests on the manufacturing and the resources industry in developing countries and regions, such as Asia and Latin America. India mainly invests on the pharmacy and information technology industry with higher technology content and most of the investment flows to developed countries.In order to comprehensively analyze the superiority and potential of both countries'economic development, this dissertation also analyzes some non-economic factors which influence the economic development of China and India, mainly including the political factors, the cultural factors and the international environment factors. From the political point of view, the stability and authority of Chinese Government's is apparently higher than that of India, while India has more independent judiciary. Therefore, Chinese leaders can make economic policies from a comparative long-term perspective and these policies are able to be implemented comprehensively and thoroughly. However, Indian government's economic policies have short-termism and can not be implemented effectively. From the cultural point of view, Chinese culture is a popular culture which emphasizes on unity and melting with world culture. Therefore, it is a great promoter to Chinese economic development. Indian traditional culture is a religious culture which focuses on containing and transcending the mundane world.It has certain negative impact on the economic development but it also has some positive impact for entrepreneurs in the formation of good moral and personal cultivation of the spirit of innovation. From the international elements point of view, each has strong points that China's overall international status is higher than India, but Indian has a better relationship with the main world great nations. Finally, this dissertation summarizes the economic development achievements, the advantages and disadvantages of development modes and the development potential in the past thirty years. Generally speaking, the overall performance of China's economic development is better than that of India, which can be reflected not only in economic growth speed and economic development level but also in China's overall level of social development. Nevertheless, the utilization efficiency of India's resources and capital is superior to China and its international competitiveness of software industry and pharmacy is stronger than China. Besides, both countries have their own advantages and disadvantages in economic development modes. Chinese human capital, the infrastructure as well as the leading industry contribute a lot to the economic development. The size of Chinese market is also much larger than that of India. However, India pays more attention to domestic demands and its domestic consumption accounts for a higher proportion in GDP than that of China. In the aspect of soft environment, India performs better than China on protecting the private property and its financial system is more consummate. Especially, the Bank of India provides more significant support to the private sectors than China. But the work efficiency of the Chinese government is much higher than India, which not only enables the timely and effective implementation of various reforming measures, but also provides a more efficient business environment for Chinese enterprises. If the existing system environment and economic development mode were invariable, the Chinese pattern has certain superiority comparing with India in the economic catch-up period while Indian pattern may have more competitive power than China when both countries enter the economic maturity stage. However, from the development point of view, both the development advantages and disadvantages of the two countries may be changed. It is of high possibility for China to change the disadvantages into position factors, which indicates that the economic development potential for China is greater than that of India.From the comparison of economic transformation and development Pattern between China and India at the stage of economic take-off, it provides not only important reference for those two countries'development in the future, but also important enlightenment for economic development of other laggard developing countries. |
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