China, India and Beyond

China, India and Beyond

Development Drivers and Limitations

Global Development Network series

Edited by Natalia Dinello and Shaoguang Wang

China, India and Beyond challenges the widespread belief that China and India will be the driving forces of the global economy in the 21st century. Scholars of these two countries offer scenarios ranging from buoyant to subdued to negative, depending on how they evaluate the drivers of development (market-oriented reforms, global integration and investment in human capital), and its limitations (infrastructure bottlenecks, environmental degradation and institutional frailties). The book covers a broad set of topics, including international trade and investment, health care and grassroots democracy. Readers from all countries will benefit from this cogent analysis of the delicate balance among various ingredients of successful development versus failure.

Chapter 3: Asian Century or Multipolar Century?

David Dollar

Subjects: asian studies, asian development, development studies, asian development, development economics, economics and finance, development economics

Extract

David Dollar The most distinctive feature of the modern era of globalization is the emergence of large developing countries, notably China and India, from a long period of self-imposed isolation. In the 15 years between 1990 and 2005, the developing economies of Asia accounted for 44 per cent of global economic growth, measured at purchasing power parity (PPP). The established industrial powers of the Organization for Economic Cooperation and Development (OECD) accounted for 41 per cent. Many observers believe that these trends will continue and that we are on the verge of an ‘Asian Century’ which will be dominated by Asian economics, politics and culture. To analyze this topic, I divide Asia into three roughly equal parts – China, India and the rest of developing Asia (RODA) – and compare their economic performances and future prospects. This categorization quickly reveals that the notion of the rise of Asia is something of a myth. In the next section I look at the recent economic performance of China, India and RODA (each of which has, roughly speaking, about a billion people). China’s economic performance has been spectacular, and the ‘rise of China’ is a real phenomenon. India has done well, but over a 15-year period its per capita GDP growth averaged 4 per cent, far behind China’s performance. That growth rate has accelerated in recent years, and a key issue for India is whether it can sustain this higher growth. The rest of developing Asia has grown at 2.7 per cent, just slightly better...

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