However, when it comes to economic development both India and China have lot of similarities. These two countries are the most rapidly developing nations in the world at present. It is often said that global wealth is currently shifting from less heavily populated regions to the most heavily populated regions because of the developments in these two countries. India and China have shown the world that how the big curse (Population growth) can be turned to big blessing with the help of suitable economic policies. While most of the other developing nations such as America and European countries are struggling to find enough manpower, India and China have surplus manpower which they are utilizing cleverly for economic development. Even though a developing country may have many other sources of external finance, FDI seems to be the largest among all those sources. According to Malik et al.( 2012), “FDI is not only considered as a healthy sign for the overall national economy but also a positive indication for the local industry considering its positive spill over effects” (p.230). FDI is bringing dividends in the progress of India and China in recent times. Majority of the prominent companies have invested heavily in India and China in recent times to capitalise the cheap manpower and other resources. . It should be noted that America and European region are not much promising for the multinational companies at present because of the ongoing recession problems and the ill-health of the economies there. On the other hand, India and China offer fertile soil for such companies and they work on their expansion plans based on the prospects in these two emerging economies. Some people believe that the investment climate in China is better than that in India. On the other hand, many others are of the view that India provides better climate than China for FDI. However, considering the recent performances of India and China in economic development, once can definitely say that China has slight edge over India in attracting FDI. This paper analyses why there may be greater potential for FDI activity in China rather than India under the present economic climate. What is FDI? According to Dicken (2007), Direct investment is a kind of investment intended to gain control over the activities of another firm. Moreover, FDI is the investment across nations (p.36). Ietto-Giles (2002) pointed out that “The flow of FDI and portfolio investments across countries generates a very large amount of investment incomes going in the opposite direction” (p.27). In short, the economic progress of a country in the modern era heavily depends on its ability to attract FDI. It should be noted that foreign direct investment is the investment of foreign capital in domestic goods and services. Since the internal resources of a country are limited, the ability to attract FDI determines which way the country is progressing. Adina (2011) mentioned about the training effect of FDI. In her opinion, FDI may help a country to modernize techniques and technologies, increase production and supply of goods, improve quality and competitiveness, create new jobs and grow the quality of life (p. 148). There is a limit for many countries to invest in infrastructure development projects because of various reasons such as budgetary constraints. FDI helps such countries to develop infrastructure with the help of foreign capital even though foreign companies, which bring capital, may exploit some internal resources. While balancing the profit and loss of FDI, profit will exceed the loss and hence most countries try to attract as much as FDI possible. In fact, competition for attracting FDI is huge among
India and China are the largest nations in the world at present in terms of population size. Even though India is under a democratic administration, China is controlled by the communist party for the last few decades. …
These countries are considered to be the most promising and fastest emerging market economies of the world. They are prominent in contrast to other budding economies because of the fact that they not only hold economic potential to become the world’s most powerful economies in the modern era but also possess demographic strength to become world leaders in a few decades.
Taking for example the tradition of burning incense sticks in China and India is linked with purifying the place. It is linked with driving the certain insects out from the workplace or home or killing the germs and keeping the people healthy. This also helps to calm down the mind and focus on the work at hand.
But Pant said, “The biggest challenge for India remains that of continuing to achieve the rates of economic growth that it has enjoyed in recent years--everything else is of secondary importance.”2 China, on the other hand, has also undergone numerous nuclear testing in order to attain effective national defense.
In order to attain the aim of discovering real reasons behind the growth in FDI in China, the following objectives are examined in the article. These includes: a review of the factors in FDI movement globally, an analysis of the trends in FDI in China and India, an observation of the differences between situation in this sphere in these countries.
Economic development of India and China. Introduction The economic growth of China and India has triggered much interest in the world. Economists have had extensive arguments and counterarguments on how the Asian economic giants managed to grow and cut a niche for themselves in the global economy.
According to the essay, China and India have not only emerged as economic superpowers during last decades, but also displayed potential of qualitative improvement of the social and political interactions between the countries. The mutual interest of the countries contributed to the cause. Trade ties and bilateral co-operation acted as the catalyst.
Some visionaries have presented a detailed analysis of importance of Asia for trade and other economic operations of Australia. Although Australia is an isolated piece of land but still its development is a threat to many countries of the world. Attitude of Australia to some of the Asian countries is cold because of the experiences of World War II.
The paper also discusses the government's role in influencing the FDI.
For the purpose of this research paper, only secondary sources were used. Most of the data that has been referred to is obtained from various business journals and online articles. Some data was also obtained from websites directly and has been referenced in the bibliography.
China and India are the two growing economies in Asia that have been frequently making news with regard to the FDI. Though these two are the two most populous countries being guided by the commonality of abundance of human resources, the disparity between these two countries in the inflow of FDI is as huge as the Himalayas.
In addition, FDIs are also drawn to market size and market possibilities abroad. According to neoclassical theory, the efficiency seeking dynamics of TNCs and thus FDIs drives development as FDIs are drawn to places where their resources can be more efficiently invested.2
12 pages (3000 words)Essay
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