Ramkishen S. Rajan

What Does the Economic Rise of China Imply for ASEAN and India?: Focus on Trade and Investment Flows

The People’s Republic of China (PRC)2 has been opening up its economy to the outside world in a carefully managed and phased manner since 1979. The PRC’s economy grew at an annual average rate of 9.2 per cent between 1980 and 2000, and its merchandize exports expanded by more than 15 per cent annually over the same period. With the PRC’s phenomenal growth since the 1980s, it has emerged as a major economic power in Asia. The PRC is the most populous country in the world, the second largest economy in terms of GDP at purchasing power parity (PPP), the world’s sixth biggest merchandize trading nation, the twelfth largest global exporter of commercial services and the largest recipient of foreign direct investment (FDI) among developing countries. The PRC’s accession to the World Trade Organization (WTO) in December 2001 is widely expected to give a further fillip to the country’s FDI, export and overall growth prospects over the medium and longer term.