Global Management Perspectives: India & China

This assignment delves into the factors contributing to the significant growth of India and China on the global stage. It examines key aspects such as market openness, foreign direct investment, skilled labor, and favorable business locations. Utilizing theories like Heckscher-Ohlin and classical trade theory, the analysis highlights how these elements propel India and China's economic expansion within the international market.

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Global Management Perspectives
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Table of Contents

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Introduction
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
Globalization leads the business industries to expand their business in the global market.
Various developing countries are trying to achieve a good position in the global competitive
market. Among the various developing countries China and India are growing in the recent years
(Pradhan, 2017). India and China leave a great impact on the globalization world. This study
deals with the recent growth of India and China on the global stage.
Discussion
India and China market has been growing rapidly since the first half of 21st century.
However, the rise of India and China has a significant effect on the US economy. Investigation
says that a trilateral relationship is established between India, China, and US. This is the major
reason of the high growth of India and China. India’s current retail market size is US$600
billion. It is expected that this size will be increased by 12% in every year. It is predicted that this
market size will be US$1,000 billion by 2020 (Liebau, 2017). The major sectors of India include
finance, real estate, insurance, retail and heavy manufacturing. Therefore, the location of the
market is good in India. As per the example, the Khan market in Delhi is the most expensive
retail location in India. This market acquired the 24th position in the global retail market. On the
other hand, openness to trade is another factor that leads India to influence the foreign direct
investment in this country. Indian Government influences the foreign investors to promote their
business in this country. Hence, such above factors lead India to expand their business in the
global market (Shahbaz et al., 2017).

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Figure 1: Market Growth in India
(Source: Shahbaz et al., 2017)
The market size of China is also good. As per the statistical data it has been received that
in 2016 the market size of China was 16.8 billion Yuan. Therefore, it is expected that this current
market size will be 57.8 billion Yuan by 2020 (Statista.com, 2018). Statistics show that the
growing market size of China is a big factor to leads this country to expand their business in the
global market. On the other hand, the infrastructure of the business location of China is very
good and the government policy is favorable for any business. Therefore, talent supply is high in
China due to the presence of skilled labor. These factors improve the business locations of
China. As for example, Shanghai, Shenzhen, and Guangzhou are the major business places of
China. Therefore, China government offers the foreign investors to invest in this country. Such
market size, location and the openness to market allow China and India to grow fast in
comparison to other countries.

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Figure 2: Market size in China
(Source: Statista.com, 2018)
Among the various trade theories, international trade theories are effective. One of the
vital international trade theories is Heckscher Ohlin theory. According to this theory a country
should focus on the product or service, which will give maximum advantage to this country
(Palit, 2017). This highlights that the free and open market in a country lead the country to select,
which product or service will be beneficial. As for example, Indian retail market has an open
market, which leads this country to maximize the growth. Therefore, China has skilled labor and
it is a technology-oriented country. There is huge scope in foreign investment. Hence, Heckscher
Ohlin theory supports that market openness is the vital reason that leads China and India to grow
fast in comparison to other countries.
According to the classical trade theory, a country gets more benefit while entering in a
foreign direct investment business (Chow et al., 2017). India is a popular place for the foreign

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direct investment. A huge portion of Indian economy comes from FDI. Many MNCs and It
services are developed by the foreign investors in this country. In China, the State Council
introduced a new foreign direct investment policy in 2017. This enables China to open up a
market for the foreign direct investment. Such new policy allows China to maximize their
business in the global market and gain competitive advantage. Hence, from the above analysis, it
has been received that India and China are continuously growing in comparison to other
countries due to the market openness, foreign direct investment, and talented workforces.
Conclusion
The entire piece of work deals with the various factors that lead India and China to grow
fast in the international market. However, good business location, market openness, skilled labor
and foreign direct investment are the main reasons that lead China and India to rise in the global
market. Application of Heckscher Ohlin theory and classical trade theory supports these factors
for the high growth of China and India.

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References
Chow, S. C., Cunado, J., Gupta, R., & Wong, W. K. (2017). Causal relationships between
economic policy uncertainty and housing market returns in China and India: evidence
from linear and nonlinear panel and time series models. Studies in Nonlinear Dynamics &
Econometrics.
Liebau, H. (2017). India and China in the Colonial World. Routledge.
Palit, A. (2017). China-India Economics: Challenges, Competition and Collaboration.
Routledge.
Pradhan, J. P. (2017). Emerging multinationals: A comparison of Chinese and Indian outward
foreign direct investment. Institutions and Economies, 113-148.
Shahbaz, M., Van Hoang, T. H., Mahalik, M. K., & Roubaud, D. (2017). Energy consumption,
financial development and economic growth in India: New evidence from a nonlinear and
asymmetric analysis. Energy Economics, 63, 199-212.
Statista.com. (2018). Market size of the big data industry in China from 2014 to 2020 (in billion
yuan). Retrieved from https://www.statista.com/statistics/796500/china-big-data-market-
size/