Factors distinguishing economies of India and China today from population growth

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The countries of India and China can be distinguished from each other, based on various factors such as population growth, political systems, and human capital. Although both the countries possess abundant labor and even depends on the manufacturing sector but there are certain other factors, which creates differences amid them. According to Bhagat (2011), as per the recent trend of India, population growth contributed largely to the dominance of urbanization in the country. In 2011, the urban population increased to 377 million with the growth rate of approximately 2.76% p.a. This further highlighted that the level of urbanization increased from 27.7% in the year 2001 to 31.1% in the year 2011 (Bhagat, 2011). Similarly, Mishra (2017), stated that population growth was the major problem that contributed to the large-scale urbanization, which further contributed towards exerting immense pressure on the resources available in the environment. Hence, India has become the second largest country in terms of population growth after China, which secures the topmost position in the entire world (Shaw, 2018). Therefore, it can be stated that China exceeded India, with not much of difference in both the economies.

Another factor that differentiates the two economies is their political systems. The political culture of India is comparatively less commendable than China because the political authorities have imperial power over the economy. In addition, China is becoming a capitalist country over time and hence democracy is required only when the economy of the country becomes the powerful one. On the contrary, India is found to possess the potential to match up with China’s economy. However, it has more political interferences that are found to be acting as a barrier (Desai, 2005). Another significant factor of differentiation between the two economies is the human capital. India has not been able to utilize its abundant human capital for its economic development, whereas China is observed to possess a strong ‘human capital’ which proves that they are more educated than India. Moreover, considering the education status of both the economies, China is noted to reach approximately 100% literacy rate, while India has attained only 72.1% as shown in figure 1 in details. In addition, the expenditure of the government in the field of healthcare has been observed to be more, approximately five times pertaining to China than India. It has hence been stated in the Human Development Report, 2015 that India can be termed as the medium type of human development economy, whereas China as the economy of ‘high human development’. This was hence evident that China secured the 89th rank, which is higher in comparison to India ranking 131st (Naseem, 2017).

Table 1: Education Status

Source: (Naseem, 2017)

Another difference was regarding the Human Development Index (HDI), in which Chinese economy was recorded to be at a higher position as compared to that of India, with China having 0.738 HDI and India with 0.624 HDI. Furthermore, in relation to human capital, the mortality rate and life expectancy also need to be involved. Thus, it was estimated in 2014 that the average life-span in India was 68 years and that of China was 76 years, while the infant mortality rate in India was recorded to be 41.4 per thousand and China a meager amount of 10.9 per thousand (Naseem, 2017). Despite all these differences, both the countries followed a similar reform path, which was intended to reduce the impact of government in the economic activities and hence increased foreign trade. Irrespective of all these reforms, sustainability of the growth rate in China is often questioned to be reduced with the passage of time whereas, in India, the growth rate can be sustained by approximately 8½ %. Another difference is that China does not have any capital stock estimates, officially but India constituted ‘capital stock valuation’ for such requirements (Herd & Dougherty, 2007). Therefore, it can be concluded that there are certain differences between the two economies primarily in terms of political systems, human capital, and population growth. However, economic conditions and education status also contributed largely to the higher position being given to China than India in various aspects in-spite of their similarities.

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  1. Bhagat, R.B. (2011). Emerging pattern of urbanisation in India. Economic & Political Weekly, XLVI (34), 10-12.
  2. Desai, M. (2005). India and China: An essay in comparative political economy. International Monetary Fund, 1-22.
  3. Herd, R., & Dougherty, S. (2007). Growth prospects in China and India compared. The European Journal of Comparative Economics, 4(1), 65-89.
  4. Mishra, R. (2017). Smart City: A path of growth of India. Journal of Public Policy & Environmental Management, 1(3), 20-26.
  5. Naseem, S. (2017). Economies of two Asian giants India and China: A comparative study. International Journal of Business and Social Science, 8(9), 42-48.
  6. Shaw, A. (2018). Towards sustainable cities in India. Springer Nature Singapore, 23-37.
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