The Robust Economies of China and India
First Published: ADawnjournal.com January 3, 2010
With the global recession in full swing, though showing some signs of recovery, the economies of India and China continue to grow. Some argue that, in fact, India and China, with their more robust economies, are floating the worldwide economy, boosting the global recovery almost single-handedly. Other economists predict that China will surpass the United States as an economic superpower within the decade, and still others predict that same achievement for India. Both China and India are, to be certain, becoming global economic ‘big players,’ albeit in very different ways, and under differing governmental structures.
Right now, most economists agree that in global economic standing, the United States is above Japan and China, respectively. India is placing in the top twenty, at position twelve. China, despite its growth, still has a long way to go before it may surpass the United States; 2008 GDP (gross domestic product – a figure that measures all the economic outlays of a particular organization, government, and so forth) for the United States stood at the top of the heap at 14 trillion. How do other countries stack up, particularly China and India?
World Top Economies by GDP 2008
1. United States $14 trillion
2. Japan $5 trillion
3. China $4.4 trillion
4. Germany $3.6 trillion
5. France $2.8 trillion
6. United Kingdom $2.6 trillion
7. Italy $2.3 trillion
8. Russia $1.7 trillion
9. Spain $1.7 trillion
10. Brazil $1.6 trillion
11. Canada $1.5 trillion
12. India $1.2 trillion
NB – Figures are rounded. Source: CIA World factbook.
The point in the prediction of the growing might of the economies of China and India is not their current standing as much as that the global GDP has slowed in recent years (thus the term, worldwide recession) whereas the economies of China and India have grown, despite the realities of the worldwide economy.
One indicator that most of us can understand is automobile sales. Long a “canary in the coalmine” type of economic barometer; when consumers perceive the economy as ‘strong,’ they purchase big ticket items, such as cars (which, outside of a home, are usually the largest single expense that an individual undergoes). As one of the richest nations on earth, the United States has long led this economic indicator, but next year it is predicted that China will surpass the United States by being the car-buying powerhouse of the world. With its growth rate at an average of between 7 and 8% (depending on the report that you read), compared to the United States’ predicted growth rate of just over 1%, it should come as no surprise that China may exceed the United States within our lifetimes.
India, as well, shows a high growth rate for the upcoming years. Currently far below China, and even further below the United States, but with one of the highest populations in the world, India’s GDP is still impressive considering the abject poverty and low (in comparison) wages. Primarily a service based economy (almost 60% of India’s economy is service-based), India’s economy shows great potential for growth with its massive population, and extremely high knowledge base. Most economists predict that by 2020, India will be among the top economies of the world.
China and India are certainly worth watching as the economic world continues to diversify and becomes more complex.