Indo- China: The Prospective Economic Region

The segmentation of global manufacturing and services provided China and subsequently India with a golden opportunity to make full use of their absolute advantage – low cost yet educated labour-to integrate into the world economy within a comparatively shorter period of time than some earlier industrialists. Though international trade functions as a vent of surplus in view of the narrowness of their domestic market at the beginning of their economic catch-up, the label of export-led model may not reflect the real picture as imports underwent dramatic increase during their respective growth periods, in particular for China. Foreign Direct Investment has played a vital role in their economic growth and has major presence in international trade and investment in leading sector of both the countries, giving rise to certain special features and weak links for their economic expansion and sustainability of fast economic growth. To maintain more broad-based, fast and balanced growth, it seems that both countries have to redress sectorial imbalance, encourage technology up gradation and cope with future changes in demographic profiles which constituted a trigger to fast economic growth at the time of their respective economic reform.