In recent years, the rise of China and India has become a salient feature of the global economic landscape. Conferences and books have proliferated with titles such as “China and India Rising” and “Dancing with Giants”. Although individual contributions have often delineated carefully the differing paths taken by these two populous Asian nations, there has been a general tendency to lump the two countries together in discussions of global economic issues ranging from international trade to climate change.
At one level, this is quite natural. China and India are the only two countries with more than a billion people. Both are in Asia. Both have opened up to international trade and capital flows in the past three decades. Both have demonstrated sustained and enviable economic growth since 1980. It is true that if current growth rates are maintained, both countries could join the US in the trio of the world's largest economies by around 2025, measured in purchasing power parity (PPP) prices.
Yet for all its apparent sense, the pervasive bracketing of China and India too often masks critical differences between them and impedes a better understanding of the challenges posed to the world economic order by their economic expansion.