GIGA Focus International Edition English ,

China and India — The New Growth Engines of the Global Economy?

GIGA Focus | International Edition English | Number 04 |

While the leading industrial nations are still recovering from the consequences of the global financial crisis, China and India are already boasting very high growth rates again. In the third quarter of 2009 China’s economic growth was 10.7 percent; India’s was 7.9 percent. Both countries are again being portrayed as the growth engines of the global economy.

Analysis
Despite their impressive economic successes, China and India face the following social and economic challenges:

In the context of the economic growth, poverty in the two countries, particularly in China, has declined significantly. However, disparities have increased in both China and India.

  • High and increasing disparities in income and public goods such as health and education could trigger societal conflicts and endanger social stability. In addition, unequal access to education could hamper human capital formation.

  • The migration of the rural population to the cities is bringing about not only positive income and learning effects in both countries, but also considerable burdens on infrastructure and social security systems.

  • Both countries are confronted with major environmental challenges, which threaten economic growth. Environmental policy measures often fail due to a lack of implementation at the local level.

*The inadequate expansion of infrastructure continues to be a barrier to growth. This is particularly true of India and the rural areas of China.

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Suggested Citation Style

Peterskovsky, Lisa, und Margot Schüller (2010), China and India — The New Growth Engines of the Global Economy?, GIGA Focus International Edition English, 04, urn:nbn:de:0168-ssoar-276272

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Open Access

The GIGA Focus is an Open Access publication and can be read on the Internet and downloaded free of charge at www.giga-hamburg.de/en/giga-focus. According to the conditions of the Creative-Commons license Attribution-No Derivative Works 3.0 this publication may be freely duplicated, circulated and made accessible to the public. The particular conditions include the correct indication of the initial publication as GIGA Focus and no changes in or abbreviation of texts.

The GIGA German Institute of Global and Area Studies – Leibniz-Institut für Globale und Regionale Studien in Hamburg publishes the Focus series on Africa, Asia, Latin America, the Middle East and global issues. The GIGA Focus is edited and published by the GIGA. The views and opinions expressed are solely those of the authors and do not necessarily reflect those of the institute. Authors alone are responsible for the content of their articles. GIGA and the authors cannot be held liable for any errors and omissions, or for any consequences arising from the use of the information provided.

General Editor GIGA Focus Series: Prof. Dr. Sabine Kurtenbach

Dr. Margot Schüller is an Associate at the GIGA Institute of Asian Studies. Her research focuses on China’s global economic integration, China’s innovation system, and German–Chinese economic relations.

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