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The Rise of China and India in the Past Century Essay

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Updated: Sep 14th, 2021


In the modern world of the industrialized international community, the state of the country is often dictated by the level of technological and economic achievement. Through the course of human history, the western world can be considered as the dominant region when it comes to economic prowess. But the past century had paved the way to the development of the oldest civilization in the Asian region and the East.

Included in the countries that can be considered and viewed for potentialities when it comes to being an economic power are China and India. There are different important issues that are related to the identified spectacular rise of the economies of China and India. Included in such issues is the decline in the economy of the United States and the deindustrialization of the European region. This cannot be considered a complicated issue due to the fact that it is not a sole issue on the economic aspect.

The transfer of control and reign in the world economy is predicted by many to be away from the western region and towards the eastern regions. Due to the waves that were created by the said issue in different forms of media, the query can be considered important specifically in the study of the economic status and environment of the modern era.

Thus, the main objective of the study conducted is to present reasons and possible evidence that can aid in the consideration of the issue as being logical or on the other hand myopic.

The Rise of the East

The main concern in the study that was conducted is the perceived rise of the countries from the east such as China and India. The said trend was observed when the jobs and industrial tasked are undertaken in the Asian countries wherein the cost for labor was considered as lower compared to the Western nation. Due to the said trend, there are 2 issues that can be considered to be related to the query.

The trend had been initiated by the rise of Japan earlier than the countries such as China and India. But the trend presented by Japan can be considered as a trend set up by the ancient and largest civilizations in Asia. Basically, the two main countries rising into power in the modern era can be considered to have one of the oldest civilizations in the world.


China is one of the countries in Asia that is projected to have an important role in the future economy. The past century can be considered as the greatest witness to the continuous improvement of capabilities. During the 1970s, China was observed to have a significantly high percentage of economic growth through it used to be considered as one of the countries with economic difficulties during the past centuries. It can be considered as an unprecedented event that by the turn of the century, China was able to be one of the strongest economies in the world (Pumphrey, 2002, p.1; Weiming, 2000).

Simple examples that can be sighted include the Chery automobile that was considered to have caused a shift in the industry and attracted global partners. This is important on the basis that it competes with the products of the west (Fairclough, 2007). The said automobile brand even caused stress and competition to the US brand GM that resulted in the decrease in the output of the latter (Fairclough, 2007; Spector, 2007).

The important data regarding the economic changes in China as a nation were observed by different people. Based on gathered data an improvement in the economy was experienced with a 1.4 GDP increase (Gill and Kharas, 2007). The growth rate of the economy through the years even reaches 8 percent which is double that of India (Bardhan, n.d.).

The rise of China in international trade can be considered as one of the most significant improvements in the countries in Asia. This is in spite of the very low point of origin on the basis of the low performance in the periods prior to the said period. Even other areas and aspects in the society such as education improved (Jaumotte, Poirson, Spatafora, Vu, De Guzman and Hettinger, 2006).


India is another country that is considered to have an increasing economic strength. This can be based on the modifications in the trade and foreign investment policies that were undertaken in the last part of the century. The said country even converted into liberal economic policies. The said changes can be considered as drastic that resulted in the rise of the country as observed by the other parts of the world. The rise of India was even considered as a shock and unexpected specifically due to the fact that prior to the said change, the nation is deep into problems that concern trade policies. One example of the past scenario is the tariff rates that were recorded to continuously increase by almost 120 percent on an almost regular basis reaching even 400 percent (Panagariya, 1994).

The economy of India was even considered as a rising tiger in the region. The modifications in the policies had caused benefits that can be considered unexpected since the country must have undertaken the changes of the policies if such results had been expected. As compared to the scenario in the assignment of tariffs, upon the application of the policies the country continued to rise in terms of economic performance, it settled to 65 percent.

Also, the country was not expected to make the said rise based on the problems being faced prior to the changes in policies. These difficulties can be attributed to the democratic form of government in one of the most populated countries of the said political structure. It can be considered less stable due to the fact that the political decisions are largely based on the opinion of the public (Panagariya, 1994).

With regards to the growth of the economy of India, it was observed that the capability of the country doubled n the past period reaching almost 4 percent growth (Bardhan, n.d.). It was considered that 0.75 to 2 percent of the said economic growth can be attributed to TFP. India is only one of the countries in Asia that achieved an accumulated TFP in percentage even reaching 3 percent in some nations (Jaumotte, Poirson, Spatafora, Vu, De Guzman and Hettinger, 2006).

Related Concerns

These are the main examples of countries in the east that can be considered in terms of the factors that triggered the view on the possible shift of the world economy to the east. Other potential countries are Indonesia and Vietnam that were also observed to achieve significant growth in the past century.

Basically, aside from the fact that these countries in the eastern region can be recognized to be gaining economic power, the corresponding decrease in the control of the economy by the western region such as the US and Europe is another area of concern. It can be logical to perceive that the progress and rise of another country can be the decline of another. It can be considered that as the countries in the east are continuously improving and growing the economic strength others are decreasing strength.

But the process from some angles cannot be considered and defined in a simple manner. The economic trends commonly occur in a complicated way. Basically, the issues presented regarding the shift in economic control and power came to view in relation to the changes occurring in the international economy. In the absence of actions that can be undertaken the said shift can be considered to happen. In the present state though, it is still one of the many possibilities and probabilities that can occur. It can still be considered myopic at the present point in time but the continuous decline of the western economies and other issues will make the said view an approaching reality.

Issues Related to the Increasing Possibility of the Economic Shift

The main issue that is discussed is the rise of the economy of the countries in the east but more importantly, the concern was being voiced out by different groups on the basis of different events.

One of the events that are creating anxiety for people in the west and increase the belief on economic shift is the continuous decline and loss of strength of US dollar value. The said decline can be considered as an indication of the instability of American society in the present era. But based on the article by Reddy (2007), the performance of the dollar alone cannot be considered as important evidence of the state of the economy of a country. This can be attributed to the fact that the dollar exchange rate has less influence on the inflation rate compared to the past periods. There are effects that can be observed in the importation of products such as luxury cars but not present in other products (Reddy, 2007).

Recession and decreasing production and demand are also important indicators of the decreasing strength in the economy which are both observed in the US. GM which is one of the largest automobile company significantly decreased output due to less demand (Spector, M. (2007, December 4).

One of the important areas that can be considered is the shift of global finance away from the US. The cause of concern can be considered of material since it had already occurred in the past wherein the shift of global finance went to the area of the strongest and highest industrial development (Rush, 1983). If this view is considered, the eastern region can be considered as the next center of global finance it is the site of industrial production, although the jobs can be considered as being served to the west.

The European region cannot even be considered since they also have a low score in terms of industrial activities. The events in Europe are even described as deindustrialization. It can be characterized by the decrease in industrial activities in an area wherein there are former stable industrial activities (Webster, 2001).

The economic performance of European countries such as France, Germany, and the United Kingdom was then affected. The profits of these countries continuously grow but at a comparatively lower rate than what is expected from them (Metz, Riley, and Weale, 2004).

Basically, important growth trends in Asia were observed on the basis of output and labor productivity. Output per capita is an increase on the basis of the labor productivity which can be measured through the output of every worker; the participation and the structural age of the population. The growth was evaluated as a 1 percent point of increase yearly. In the factor such as population characteristic then, the former disadvantage of a very large population in China and India comprising two firths of the world population became their advantage and even projecting a continuous rise (Bardhan, n.d.; Jaumotte, Poirson, Spatafora, Vu, De Guzman and Hettinger, 2006).

In terms of labor productivity, capital deepening, increase in labor quality, and mounting TFP can be considered as the important contributing factors. Accumulated capital and a high rate of TFP can be considered as the main reason for the boom in economies even translated to 1 to 3 percent points in economic growth through the last quarter of the past century (Jaumotte, Poirson, Spatafora, Vu, De Guzman and Hettinger, 2006).


Based on the analysis of the different aspects in the development of the Asian and Eastern countries, it can be considered as a fair fact that their potentials to be the global center for the economy be considered (Jaumotte, et al, 2006). Though the western world may not consider this, important indications such as recession and deindustrialization in the region can present the possible future states of the economy.

The notion that China, India, or other exponentially growing nation may lead the international community to the next era can be considered as a myopic idea at present but it can be a reality and a possibility. The possibility can be considered to the same degree as the reality of the possible collapse of certain economies in the western world.

But through the evidence that had been presented, the growth of the economy of countries such as China and India will continuously be seen by the world due to promising potentialities.


Bardhan, P. (n.d.). Awakening Ginats, Feet of Clay: A Comparative Assessment of the Rise of China and India. Berkeley: University of California.

Fairclough, G. (2007). In China, Chery Automobile Drives an Industry Shift. The Wall Street Journal, p. A1.

Gill, I. and Kharas, H. (2007). An East Asian Renaissance: Ideas for Economic Growth. The World Bank: International bank for Reconstruction and Development.

Jaumotte, F., Poirson, H., Spatafora, N. Vu, K., De Guzman, C. and Hettinger, P. (2006). Chapter 3: Asia Rising Patterns of Economic Development and Growth. World Economic Outlook.

Metz, R., Riley, R. and Weale, M. (2004). Economic Performance in France, Germany and the United Kingdom: 1997–2002. National Institute Economic Review, 188 (1), 83-99.

Panagariya, A. (1994). India: A New Tiger on the Block. Journal of International Affairs, 48.

Pumphrey, C. W. (2002). The Rise of China in Asia: Security Implications. Carlisle Barracks, PA: Strategic Studies Institute.

Reddy, S. (2007). Weak Dollar Isn’t the Inflation Driver It Was Once. The Wall Street Journal, p. A2.

Rush, G. B. (1983). State, Class and Capital: Demystifying the Westward Shift of Power. Canadian Review of Sociology and Anthropology, 20, 1983.

Spector, M. (2007). GM, Ford to Cut Output on Falling Demand. The Wall Street Journal.

Webster, E. (2001). Growth, Unemployment and Deindustrialization. Economic Record, 77.

Weiming, T. (2000). Implications of the Rise of “Confucian” East Asia. Daedalus, 129 (1), p.195-218.

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