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CHINA AND INDIA
Both China and India have grown rapidly in recent times with huge increases in GDP.
Businesses based in these countries are now competing with other multinationals to be
world leaders in many sectors.
Both countries have seen rapid industrialisation yet both retain traditional rural areas. One
consequence of this is that the benefits of growth are not shared equally, income
distribution had become increasingly uneven. Starting from relatively low income levels has
had two consequences. Low wages have corresponded to low labour costs for business. At
the same time, low incomes have held back domestic consumption, so exporting has played
a significant role in development.
Population 1,330 million (Comparative advantage)
Population growth rate 0.65% Still growing (half a billion)
Legislation 1 child per family. Trying to reduce population rate
China used to be a command economy.
They are now wanting to make profit and therefore becoming more efficient
Population 1,156 million (Comparative advantage)
Population growth rate 1.4%
Abundance of cheap labour cheap wage rate
Over populated empower women
Environmental damage large population
Widespread corruption Government is dishonest
Import substitution policy Not importing goods but making them instead. Reduces
imports and corrects balance of payments
Created their own brands
India's economic growth is faster than most LEDC's
Indian economy is still very diverse large primary, secondary and tertiary sectors
Advantages of India and China
1. Low wage rates can provide cheap goods
2. Young people are now training to go into business and moving more out of the
Disadvantages of India and China
1. Bad infrastructure
2. Adult literacy is only at 60%