Dynamics of Employment and Economic Growth: A Comparative Study of China and India

In the neo-liberal period, the working class in ‘global south’ has suffered massive retrogression in terms of employment and real wages. Historical experience has proved that capitalism concentrates the wealth at one end of the pole and the vast mass of labouring people at the other. Given the nature of predatory growth, it cannot create enough jobs. The two Asian giants China and India have one of the world’s largest labour forces, which can exploit ‘demographic dividend’ along with a challenge to provide them ‘decent work’. Both countries are growing at a rapid pace in recent decades, which makes it analytically interesting to compare their economies during the period from 1985 to 2017, which comprises the era of liberal economic policies for both countries. The aim of this study is to examine the role of economic growth in determining the employment opportunities in these countries with variables such as gross domestic product (GDP), labour productivity (LP) and gross fixed capital formation (GFCF). This study used time series econometric technique (multiple regression) as well as percentages, figures and average annual growth rates (AAGR). The comparison between China and India divulges that the employment growth rate has fallen in both the countries as the neo-liberal regime strengthened in respective economies. The economic growth has a very meagre role in generating work opportunities. China has done better than India in terms of transferring the low productive workforce in the traditional sector to the modern industrial sector and taking out the workforce from below poverty line.