1.4 China and India

Question 1

What human factors caused China to emerge as an NIC?

Answer 1

• Largest population in the world - 1.4bn
• Moved away from planned economy in 1979, opening up the economy
• Steady stream of rural-urban migrants as agricultural decline
• Invested in labour, capital and innovation to sustain growth
• SEZs granted funding and tax relief attracting FDI and migration
• Non democratic and authoritarian - control system with western markets
• Series of 5 year plans to enact necessary reforms
• Emerging middle class in 90s due to privatisation of urban and rural land at lower prices
• Poverty fallen from 56% in 1980 to 0.5% in 2020

Question 2

What economic factors caused China to emerge

Answer 2

-Low interest - high borrowing
Borders open to FDI and imports allowing capital flow into country
-Bought foreign companies in NA and EU
-Invested $56bn in FDI in 2010
-SEZ zones for TNCs to set up manufacturing
-Containerization led to mass export of goods and less barriers to entry into global market as cheap infrastructure
-Exports boosted via subsidies and expenditure
-Capital stock grew nearly 7% in 1974-94 leading to higher exports.
-800m out of poverty
-Accounts for 13% of global exports
-Nike 149 factories employing 190,000
-2013 $1tn of global trade

Question 3

What physical factors caused China to emerge?

Answer 3

• Borders 14 countries
• China’s location significant due to proximity to markets
• South Korea, Japan, Hong Kong - ‘copy’ advancements there
• 7% of world’s arable land
• Huge coastline and ports

Question 4

What human factors caused emergence of India?

Answer 4

• Demographic growth due to age structure
• 1.3bn people
• 50 millionaire cities, 3 megacities
• Wages from TNCs - multiplier builds industry and territory
• population growth of 1.2%
• 65% below 35
• Women well educated in Kerala and health good - 85% women literate yet 48% in India
• In 1 generation life expectancy rose from 38-65
• 33% urbanised population - growth 7.5%, rising middle class
• Positive multiplier due to education
• Low cost and high quality - competitive
• Good infrastructure
• Highly educated and English speaking
• Stable government

Question 5

What economic factors caused emergence of india?

Answer 5

• Late 80s encouraged TNCs to join market
• Imports from China, UAE, Saudi Arabia, USA - gold oil silver, electronic and machinery
• Exports to US, UAE, China - petrol, jewellery, transport
• UK aid £200m a year stopped in 2015
• 1991 trade barriers removed, encourage FDI
• abandoned tariffs and liberalized markets
• SEZ in Bangalore
• secondary jobs made, higher wages services afforded
• Multiplier effect
• Tax revenues from TNCs
• BPO bring $60bn in revenues - demand 50% high, innovation allows expansion

Question 6

What geographical factors caused emergence of india?

Answer 6

• Rich in natural resources modernized by Britain who import minerals from abroad
• Major cities on coast - ports and trade links
• Large land mass and arable land
• Exports rich resources - petrol
• Varied climate ranging from tropical south to alpine north
• Coastal locations - Mumbai linked to trade routes - hub of transport, communications and trade
• Huge coastline

Question 7

Similarities between China and India?

Answer 7

Similar:

• Benefit from globalization and NIDL
• Long coasts
• Few environmental regulations
• Command economies
• Low wages, low cost
• Huge labour supply
• ASEAN trade bloc
• Both devalue currency to export more
• Both use monetary policy to lower interest an encourage borrowing
• Development of SEZs
• both opened up economies - 89 China, 91 India
• Low cost ports
• Cheap pool of labour

Question 8

Differences between china and india:

Answer 8

• India developed from offshoring, China outsourcing
• Containerization more in China than India
• India literacy 80%, Chia 95% - china tight on education due to communism
• India climate harsh china relatively normal
• India industry abandoned as unsustainable - stuck in services
• China borders 14, India 7
• India skilled in software and services - China mainly industry and engineering
• India English speaking due to colonisation
• China huge resource supplies - coal and metals
• India high value invisibles - China mass produce

Question 9

USA/Germany

Answer 9

USA deficit of $100bn

Germany $1.4tn exports, net surplus $180bn