Managing Change in the Twenty First Century
Chapter 5: Growth and Income Distribution in the Asian States
In Chapter 4, we presented an in-depth analysis of the institutional environment for promoting business activities in the major Asian states. The same unfavourable institutions which adversely affect a country’s effort to promote exports, technology acquisitions and business activities also prevent a country from achieving better economic growth outcomes. In this chapter we will first examine the main features of GDP growth, proceeding then to the issues of sustainability, macro-economic management and income distribution. Economic growth China and India In Table 5.1 we present the main features of the growth in GDP and its components in China and India between 2002 and 2008. It can be seen from row 1 of the table that the real GDP of China, estimated at 2005 prices increased from $US1,657.23 billion in 2002 to $US3,362 billion in 2008 thereby representing an increase of 102.9 per cent. For India it grew from $US573.79 billion in 2002 to $US1,077.26 billion in 2008, thereby representing an increase of 87.7 per cent. From row 2, it can be seen that China’s real GDP, which was 2.9 times higher than India’s real GDP in 2002, became 3.12 times higher in 2008. The widening gap between China’s and India’s GDP seems to imply that the gap between India’s potential and actual GDP will not be closing as rapidly as the gap between China’s potential and actual GDP. The average growth rate for China and India during eight years between 2000 and 2008 was 10.4 and 7.9 per...
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