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How does China’s growth affect India? An Economywide Analysis

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  • Rivera, Sandra A.
  • Tsigas, Marinos E.

Abstract

China’s growth impacts the Asian region in profound and sometime conflicting ways. We use a CGE model to begin revealing the complex linkages and interactions between China, India, and other Asian economies in a global context. Our findings suggest broad economic growth for China has a negative impact on the Indian economy while the Rest of Asia region is likely to benefit. Specifically, when China light manufacturing (such as textiles, apparel, and food processing industries grow due to productivity increases, India is expected to be hurt. Meanwhile, growth in other Chinese industries, such as machinery, transportation and electronic equipment, has a beneficial effect on the corresponding Indian industries. Generally, Rest of Asia is expected to increase its welfare when China grows.

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  • Rivera, Sandra A. & Tsigas, Marinos E., 2005. "How does China’s growth affect India? An Economywide Analysis," Conference papers 331359, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331359
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