ARTICLE ON CHINA AND INDIA 4
Articleon China and India
Chinaand India want to become the leading global manufacturing countrieshowever, they are faced with several challenges. India is severelyfaced with the problems of poor infrastructures, crumbling roads, andchronic blackouts. For a country to develop, in terms of industries,it is mandatory that the country must have good infrastructures suchas good railways and roads, as well as good communication systems foreasy transportation of raw materials and manufactured goods to theindustries and markets respectively (Einhorn, 2014). As a way ofpromoting industrial growth in India, India is trying to attractforeign investors through reduced legal procedures for investments inprojects for foreigners, as well as improving her railroad systems.This is a good strategy, but at the same time, it can have negativeeffects on local industries due to increased competition (Einhorn,2014).
Onthe other hand, China is being faced by the issue of increasingminimum wage. China had become an export powerhouse due to theavailability of cheap labor, but this is not the case anymore. Indiahas an advantage of cheap labor, but this is outdone by the goodinfrastructures and power networks in China, which give China anupper hand in industrial development (Einhorn, 2014). Another issuethat faced India is the labor laws and too many trade unions, whichare difficult to contain thus, likely to result in frequent strikes.However, India announced reforms on October 16 to reduce thecompliance burden.
Anotherissue that is facing both China and India is the competition fromU.S. For example, from 2000 to 2004, U.S agricultural exports toChina tripled and, in India, an increase was realized (Coy &Arndt, 2005). This affected both farmers in China and India thuskilling agriculture in both countries. In addition, the Chinese andIndian economies will be used to mesh U.S through the creation ofplenty of jobs for Americans as a result of off-shoring tradableoccupations. Also, due to attractive labor and regulatory conditions,U.S will continue attracting the best brains which will push itsindustrial base forward (Coy & Arndt, 2005).
Coy,P. & Arndt, M. (2005). America`sNew Competition: How the U.S. could beat the gloomy projections.Bloomberg.
Einhorn,B. (2014). Indiavs. China: The Battle for Global Manufacturing. Indian Aims To Be TheNext Manufacturing Power.Bloomberg.