International Relations Essay

832 WordsNov 4, 20124 Pages
Can India overtake China? Can the lumbering elephant overtake the hyperactive dragon? According to the statistics shown in the recent years, china’s economy is on rise and that too much higher than India’s economy. China is an export based economy which means allowance of restriction-free trade by the government and accumulation of foreign exchange in the form of foreign direct investment. Some of the characteristics of the communist party has led to an economic boom but the question which keeps on revolving in the mind of economists is that how will it survive in the years to come. Looking through the Chinese perspective, the demand from the global market to china helps in earning reserves which the government in turn injects the money to the U.S. economy. China has been dependent on U.S.’s economy and it wants to be stable. China has left behind its own private firms challenging big multinationals because it follows the top to bottom approach whereas Indian economy helped its own domestic entrepreneurs in growing and boosting the economy. Indian economy followed bottom to top approach during which some of the biggest entrepreneurs overtook many of the multinationals as competent and powerful rivals. The slow and steady performance by the Indian economy may help it in the long run but the gap in between the economies has been largely created. China’s piggy bank is reported to have around 3.4 trillion dollars which is estimated and continues to accumulate in terms of bonds, treasury notes etc. from the America. So, if America’s economy falls down, it would reduce the China’s capital which it doesn’t want to happen. This leads to currency de-valuation which China has done with its currency to keep the value of dollars high. While the Indian economy is flourishing slowly making market reforms favorable to the local firms than to the multinationals. After so many

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