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The Comparative Analysis of China & India Economic Rising

Author: LingHong
Tutor: LiuJingZhang
School: Jinan University
Course: National Economics
Keywords: Economic rise Informal system Compare
CLC: F135.1
Type: Master's thesis
Year: 2008
Downloads: 353
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Abstract

Since the mid-1990s,the economic growth of China and India,whose populations are very large,has being increased rapidly and stably.This phenomenon caused the common attention of the world.It’s necessary to compare the economy between China and India,since the economic growth of the two countries cannot get rid of deep history and cultural tradition.The first comparison between China and India was done by the Western media.In this new century,the economists of China and India made comparative analysis of economic phenomena in both the two countries.The economic growths of both China and India are relying on reforms.And this affected the world economic structure to some extent.But the pattern and the trace of the growth are different. The growth pattern of China is from agriculture to industry and then to service industry,which is traditional.Instead,India developed its service industry at first.The economic growth of the two countries can not be explained by classical and traditional economics theory.But the contents of informal institution in new institutional economics can be very good for the explanation of economic development in both the two ancient countries.In Institutional Economics,system plays a fundamental role in the restrictions to the economic development.The informal system is part of the system.And it has functions of condensation, incentives,standard and evaluation.In daily life,formal system is a small part of the whole social restraint.And most parts of life are restricted by informal system.We can explain many phenomena in the economic development of China and India.The informal system of the two countries are different,and the effects of them are also different.The politicalization of religion and caste system in India led to frequent domestic conflicts and "Two India".Confucian culture and peasant ideology in China made it choose the gradual model in the reformation.The traditional concept affected the system changes directly.The informal systems of the two countries have their own difficulty to break through.India needs to establish an effective mechanism and reform the caste system,and China needs to get rid of path dependence and weaken the effects of efficiency that informal system brings to formal system.And the great differences in urban and rural areas are the common problems.In the study of the economic growth from the view of informal system,we can get some implications.Informal system and formal system must match and suit to each other,and this can promote the development of the economy.Accelerate the change of informal system by establishing formal system.Informal system needs innovation to overcome its negative effects. These implications are significant to the following development of the economy in our country.

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