Trade Patterns Of China And India

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This essay is an analysis and comparison of the trade patterns of China and India since 2000 and studies the effect of the regulating economic and national policies on the trade performance. Being old neighbors India and China have shared a lot in common like the culture, sciences and also a few economic linkages. They also have the largest populations in the world: India with 1311 million and China with 1376 million in 2015(Esa.un.org, 2016). Since 2000 trade between the two countries has mushroomed nearly twice as compared to each country’s trade with the world. Currently, China is India’s largest trade partner surpassing United States and India being China’s tenth largest exporter. These two giants have a great impact on the world…show more content…
The conclusion highlights key results and policy implications. 2. TRADE PATTERN 2.1. CHINA As one of the most closed economies in the world before 1979, China has now grown into a giant in the global trade and an attractive opportunity for FDI from all over the world. China was very cautious and slow on opening its economy and its encouragement to FDI was, however, accompanied by constant inflexible conditions during the periods 1988-91 and 1992-97(Chiarlone and Amighini, 2007). The period of trade decline and world recession (1998-2008), after China’s admission to the WTO in 2001 was marked by Chinese economy opening up to world trade. According to the WTO‘s Trade Profiles 2015, China is the leading merchandise exporter in the world and second largest importer just after United States in 2014 (Wto.org, 2015). China being a lucrative destination attracted a very high inflow of investment (foreign direct investment). Thus once very predominant part of Chinese foreign trade the Textile and Apparel industry is being gradually replaced by sectors like machinery and transport equipment, which are relatively capital intensive. 2.2. INDIA India initially, post independence and till the late 1980s adopted a strategy of import-substitution and public sector production which made it a quiet closed economy. Since the
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