George Rosen

Contrasting Styles of Industrial Reform: China and India in the 1980s.

Since World War II, China has had a command economy administered under a dictatorship, while Indias democracy has introduced a highly regulated economy. Despite obvious differences in their political systems, each country endured remarkably similar economic problems with respect to industry during the 1960s and 1970s. Both embarked in the 1980s on a series of industrial reforms designed to improve technology and efficiency in the use of resources, as well as to stimulate industrial growth in the face of declining productivity. For economists, the two countries offer an interesting test case for examining similar reform programs launched from disparate political and economic systems. For policy-makers concerned with the regions stability, a clear view of the economic futures of these two major powers is paramount. Examining and comparing the reform experiences of China and India up to the present, George Rosen shows that although China enacted more sweeping reform measures and produced more impressive local growth, it also experienced more significant inflationary spurts. Two-thirds of each nations population was involved in agriculture at the start of the reform period and nearly that many at the conclusion. Ultimately, the effects of the past industrial reforms in both countries in terms of significantly greater industrial employment or well-being of their populations were limited. An important lesson in these findings, argues Rosen, is that they actually reveal more about the political factors that limit and shape economic policy reforms in a dictatorship or democracy than they confirm the virtues of either capitalism or communism.

China and India in an Asian-Pacific economic community

Abstract With the apparent acceleration of the movement towards regional trade cooperation in the Asian-Pacific region the attitudes and potential roles of the two largest Asian developing countries-China and India-become of greater interest, and possibly importance, with respect to the future of any such arrangements. In this paper I first review their present positions in the economies and trade of Asia. Following this I examine the possible impacts of their current reform programs on their economies and trade. I then look at the political constraints in each of the two countries with respect to regional cooperation and greater trade and investment within the region. I also examine the economic costs and benefits to them and to other countries in the area of their membership in a regional trade agreement. I conclude by drawing the implications of my political-economic analysis for the future of any Asian-Pacific economic cooperation arrangement, and the roles of China and India in it.