Reforms, International Crisis and Growth of Chinese and Indian Economies

The considerable similarity in the growth paths of the Chinese and Indian economies since their respective reforms has changed after the 2008 crisis. This article tries to understand the trajectories of different parameters of economic growth in the two countries, and how these changed after the crisis. Growth has declined in both the economies, more consistently in China, compared to India. The share of exports in GDP has also declined in both economies. The dependence of the Chinese economy on exports has decreased; however, its dependence on investment has increased. Investment's share in GDP in China has increased, whereas it has decreased in India. The structure of the manufacturing sector in China has undergone changes, which is not the case for India. The increase in the share of services and decline in the share of manufacturing in China implies that the production structure is becoming less unbalanced.JEL classification: E58, E62, F32, F41