Why does China's Economy grow faster than India's

China and India
Name:
Institution:
In the last few decades, the economy of the west inclusive of the European and that of the US were the most thriving in the world. Today, there is a shift in that truth as the India and China rise above the world best economies. The two countries do not just have the economies going for them, but their population numbers are also staggering large, with approximately 2.4 billion persons, which is roughly 40% of the world’s population. While the two economies are showing signs of economic growth above the average world’s rate, China is edging past India.
China has an economy that largely depends on the external markets exports and imports, while that of India is more home-oriented, focusing on the consumption rates of their population. At the moment, the Chinese GDP is twice that of India at ten trillion, while the latter has around four trillion annually. Since the Second World War, the Chinese economy has grown by more than seven percent, which can largely be attributed to the fact that the manufacturing industries have been growing at a rapid rate (Farrell, Khanna, Sinha & Woetzel, 2004). There are several industries in the technology realm such as Huawei and Lenovo among others, which have pushed the GDP to new heights. The infrastructure in China is also much more developed than that of India, given that China spends more on it that India does. According to James Wolfensohn, the former world bank chief, in the near future the GDP of the G7 including Japan, United States, France, Canada, Germany, United Kingdom and Italy are going to be surpassed by China’s and India’s GDP. By the year 2015, it is estimated that China will have a GDP of around 48.6 trillion in US dollars while that of India will be second with 27.0 trillion (Sheel, 2012).
Over the years, the GDP per capita for China has been growing steadily unlike most of the economies in the world at the moment. According to the World Bank, by the year 2012, China’s GDP was at 6091.01 in US dollars. This is a figure that equates to more than 27% of the global average. Back in the 1960, the GDP per capital for China had been at a mere 761 US dollars, over the years it has risen to the current figure with the exception of the year 1962 when it dropped to its lowest ever GDP per capital of 69.79. In the coming years, it is even going to rise higher given the rise in the gross domestic product which is one of the variables apart from population and the rate of inflation. India, on the other hand is trailing behind a far distance from China. While the two economies are thriving quite high, India is much slower and falls far much behind China in terms of the GDP per capita. By the year 2012, according to the World Bank, the GDP per capita of India was at 1489.24 in US dollars. This shows that the economic development in China is far much faster than that of India.
When comparing the two economies, one of th...