China and India

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CHINA AND INDIA

Chinaand India

Chinaand India

Thereare many events in history that have had an impact on the economiesof . Compared to the western economies, the Chineseand Indian economies developed at significantly lower pace since the11thcentury. This was not until recently when these economies havestarted competing with Europe and America. Chinese civilization wasthe most vibrant with well developed social and economic systems.However, it was not able to bring about an industrial revolution inthe 14thcentury. On the other hand, the British rule in India had longstanding impacts on economic development.

Thereare many factors that have directly or indirectly affected economicdevelopment in the world and thus China and Asia in the last 1000years. Some of these factors will shape future developments in theeconomy. Between the 11thcentury and the early 19thcentury, the most important factor that affected economic developmentwas increase in population. The four fold increase in the globalpopulation influenced GDP increase in the eight centuries. Table 1indicates that when , is compared to the westernnations especially in Europe, the gross domestic product per capitalgrew less rapidly. While gross domestic product per capital grew from427 in 1000 AD to 1202 in 1820 in Western Europe, it grew from 466 to600 in China and 450 to 533 in India during the same period. Othercountries in other parts of the world grew significantly slowercompared to western Europe. This was contributed by many factorsamong them the role of early European urban centers, education,maritime and navigation technology, Christianity and distinct nationstates (Maddison, 2008).

Betweenthe early 19thcentury and mid 20thcentury, rapid industrialization due to intellectual andinstitutional development in the capitalistic west furtheraccelerated economic growth. Table 1 (Maddison, 2008) indicates thatin the 20thcentury, the GDP of china, India and the rest of the world startedrising rapidly, but could not match the rapid development in thewest. Despite this, India and China could not match the economicperformance of other Asian countries such as Japan in the post warera due to domestic policies adopted by the two countries. Forexample, the Chinese economy was not linked to the global economy andcapitalistic interests were eliminated. However, reforms in lateryears sparked rapid economic growth. In India, large investments inheavy industry and controls on the public sector negative affectedeconomic growth. While the Chinese economy surged, the India economyremained slow in the late 20thcentury. In the future, the Chinese and Indian economies will havehuge impacts on the world, and are likely to be the largest economiesin the world (Maddison, 2008).

AlthoughChinese civilization was as advanced as other civilizationsespecially in Europe that led to the industrial revolution in the17thcentury, the revolution did not occur in china. The Chinesecivilization has one of the oldest market economies in history.According to Li (1995), the well developed science and technology inthe early Chinese civilization failed in the modern times whileothers which emerged later flourished resulting into the industrialrevolution. The main reasons why the Chinese civilization failed toresult into industrial revolution was the fact that the Chinesetechnologies were mainly developed by artisans and farmers throughexperience. Thus, due to the large Chinese population, there weremore farmers and more artisans, which increased the likelihood of newinventions when compared to other societies. While the Chinesecivilization flourished on happenstance and experience of artisansand farmers, unprecedented changes were taking place in Europeinvention was dependent on scientific studies after special training.The planned experimental science led to the industrial revolution inthe 17thcentury. Thus, Lin (1995) argues that although the Chinesecivilization was well developed to spark industrial revolution in the14thcentury, there was no adequate investment in human capital that couldsupport scientific development. Since the structures of the moderneconomies already existed in Chinese civilization, inventedtechnology could have spread faster and have a more profound impacton the economy. However, due to the nature of the invention, whichwas based on experience rather than scientific study, the industrialrevolution did not occur in china, but in Europe, several centurieslater (Lin, 1995).

Accordingto Iyer (2010), colonization had a huge impact in the history ofeconomic development of India. The author used the instrumentalvariables to show the long term impacts of British rule in India,among other techniques. One of the factors that influenced theimpact of british rule on the Indian economy was the period ofannexation. Places that were annexed earlier had more impact ofcolonial rule compared to places that were annexed later or were notannexed. Iyer (2010) established that when areas that were annexedlate were compared to native states, investment and productivity inagriculture was significantly similar. However, table 8 (Iyer, 2010)indicates that there was a significant impact of direct colonial ruleon other indicators of development such as education and health.States which were subject to direct British rule has more access tohealth care facilities and middle schools and had better physicalinfrastructures such as roads. The availability of these serviceshad direct development implications.

Inconclusion, historical factors have had huge impacts on economicdevelopment in . Although the ancient Chinese societyand its economic and social system flourished, it was not the causeof industrial revolution. Both experienced sloweconomic growth several centuries while the western economies weregrowing rapidly between the 11thcentury and the 19thcentury. Additionally, direct colonial rule in India in the 19thcentury had an impact on economic development.

References

Iyer,L. (2010). “Direct Versus Indirect Colonial Rule in India:Long-Term Consequences”. TheReview of Economics and Statistics.92(4): 693–713.

Lin,J. Y. (1995). TheNeedhamPuzzle: Why the industrial revolution did not originate in China.

Maddison, A. (2008). “The West and the Rest in the World Economy: 1000–2030.Maddisonian and Malthusian interpretations”. WorldEconomics9(4), 75-99.

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