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Why there may be greater potential for FDI activity in China rether than India under the present economic climate? - Essay Example

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Author : camronlarson


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. …

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Why there may be greater potential for FDI activity in China rether than India under the present economic climate?

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. . ...
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