Introduction the economy defeating countries like Japan,


China has amazed the whole world at large because of the tremendous growth in its economy (Chow 45). Although China has a very large population, the Chinese people have proved to the entire world that they can be very hard working. Recent research shows that it comes second after the super powers United States of America in terms of the economy defeating countries like Japan, Russia, India and other developed countries.

In the past 30 years, that is from the year 1979 China’s growth has been averaged to a rate of ten percent per annum, which shows a very great improvement. China is also the largest exporter in the world exporting a wide variety of commodities such as agricultural commodities like rice , machinery, electronics, nuclear weapons and textiles just to mention but a few. Other than just exporting it is the second largest importer of goods majorly from Japan, Taiwan and South Korea. China’s major imports include; oil, minerals, plastics, other machinery it lacks and many others. This therefore is enough evidence that China is good at trading with many trading partners all over the world. India on the other hand is following suit so as to better their economy.

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It is ranked fifth in the world in terms of economy (Chow 78). Despite the fact it is lower than china, it beats other developed nations like Germany. In the year 2006, the economy of India stood at 8.5%.

This paper will therefore discuss the key factors that contributed to the rapid economic growth of China and India.

Use of Foreign investment by China to improve the economy

China has invested greatly in technology leading to production of high quality products. In a bid to achieve this, it imported advanced machinery, plant and production facilities from trading with other countries (Arora 98). The investment in these facilities advances the technology of the country hence improving the quality and quantity of products produced. China’s commodities are among the top most sophisticated products in the world hence attracting investors from other countries. It is because of this that the total factor in productivity of China has grown by 4 percent per annum. The government also made investments in the education system such that it involved technological training sessions (Dana 90).

It emphasized on teaching of industrial method in schools. This was advantageous as it made the schools produce graduates who were endowed with technological knowledge. The resulting graduates therefore worked in the manufacturing sectors of the economy and thus led to the improvement of the quantity and quality of outputs (Hertel 204). Due to this the country was able to increase its exports and as a result improving the state’s economy.

Other approaches used by China to improve the economy

Reforms in the agricultural sector

Agriculture is among the top most sectors of China’s economy.

Research has indicated that the agricultural sector of China results to 60 percent of its Gross Domestic Product hence being a determining factor of the state’s economy. China produces the highest quantity of rice in the world. It also produces other agricultural products such as wheat, cotton, maize and tobacco which is exported thus the government earning foreign exchange.

The government policies

The government implemented policies that were driven to achieving economic growth at a fast rate. The government reallocated resources in different sectors of the state hence making them run well financially (Hertel 132).

After the allocation of resources the government privatized them so as to ensure efficient running and high productivity unlike when they were run by the state.

Use of the available cheap labor

China is a highly populated nation (Arora 78). Therefore the presence of the large number of the human capital which was of high quality was a great advantage to the government. This is because the people were willing to work despite the low wage rate that they were being offered. The government took this as an advantage and made great use of the available workforce so as to improve its economy.

How India used entrepreneurship to improve its economy

India is endorsed with people of different cultures. When these people meet, they lead to exchange of commodities hence entrepreneurship.

This entrepreneurship was so intense that India was ranked number two globally in terms of entrepreneurship in the year 2002(Srivastava 2). This improvement was brought about by liberalization and the installation of good information systems. Through this, the country tried by all means to attract investors so as to be able to compete well globally. For example, most nations of the world prefer outsourcing services from India, since they know they will definitely get quality and efficient work.

The fact that India is among the developing countries, its economy is greatly influenced by globalization. Apart from introducing new business opportunities, globalization may lead to decline of a nation’s economy if does not favor that nation. India also has a big population which is mostly characterized by hardworking businessmen (Srivastava 1). The businessmen from India were able to spread all over the globe in a bid to do business. This improved the economy since the foreign exchange went back to the country hence increasing its gross domestic product which eventually led to the rapid growth in its economy. Some of the factors hindering entrepreneurship in India include; the lack of capital and support from the government, poor infrastructure and unwelcoming social attitudes. So at to greatly improve the economy of India, these factors have to be put into consideration and dealt with immediately. The government can help in this by subsidizing the duty to be paid by the entrepreneurs.

The government can also assist in improving the country’s infrastructural condition hence making business favorable.


A comparison between the two countries indicates that China seems to be more aggressive in terms of rejuvenating its economy as compared to India. This is easily depicted by the measures China undertakes so as to reform the economy (Dana 87). The other reason is the mere fact that China wants to overtake the United States of America which for a long time has been known to be the best economy in the world.

If China continues in the same way, there is a likely hood that it might overtake the United States of America. However, both countries can be said to have had rapid growth in their economies despite the different approaches they used. Both economies have impacts on the whole world at large though China seems to hold a bigger part because of the many investors it has.

India’s development in their economy affects a great portion of the global nations because of its entrepreneurs that are distributed globally.

Works cited

Arora, V. (2005). China’s Economic Growth: International Spillovers. Journal of Economics, pp. 52- 109 Chow, G. (2005).

Globalization and China’s Economic and Financial Development. New York. Wadsworth Publishing Dana, L. (2000). Creating entrepreneurs in India. Journal of Business Management vol 38, pp 86-91.

Hertel, T. (2004). Global Impacts of China’s Economic Growth. California. Barnes & Noble. Srivastava, K.

“Benefiting from Social Entrepreneurship and Social Business in India” 2009-October 29, 2010,


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