Chapter

China and India: A Tale of Two Trade Integration Approaches

Przemyslaw Kowalski

in Emerging Giants

Published in print April 2010 | ISBN: 9780199575077
Published online September 2010 | e-ISBN: 9780191722141 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199575077.003.0006
China and India: A Tale of Two Trade Integration Approaches

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Despite the fact that China has gone further than India in terms of economic reform and opening, China's integration process so far remains characterized by a certain duality. On the one hand the opening up of trade and FDI in manufactured goods has spurred the emergence of a largely private sector. On the other hand the high level of public ownership and important regulatory barriers continue to dominate the services sectors. India has gone a long way in reducing its tariffs on nonagricultural products as well as selected non-tariff barriers but moderate protection still persists which likely adds to the hurdles faced by the Indian manufacturing sector. India has revealed a comparative advantage in certain segments of the services sector but its services trade policy is still very restrictive. More generally the extent of liberalization achieved so far in India suggests that the remaining goods and services trade barriers are just one item on the list of reforms that the country needs to tackle in order to promote trade-led expansion of more labor-intensive activities.

Keywords: China; India; manufacturing; services; trade barriers; trade policy

Chapter.  12780 words.  Illustrated.

Subjects: Economic Development and Growth

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