The Evolving Balance of Economic Power Shift from the West to East
Economy power has been shifting in the last decade towards east from the west. The shift has resulted from increasing business and knowledge base in China and India due to their large population and resent economic growth and expansion strategies. For instance, China is establishing massive industrial parks catalyzed by a robust population of skillful citizen and first-class infrastructure. India is becoming a global ICT center supported by highly skilled youthful workers who are developing first-generation technological applications and quality innovations at competitive market rates as compared to the counterparts in the western world.
Despite the fact that the US had the highest global gross domestic product of 26%, which is more than the GDP of India and China combined, it is estimated that the trend will change by 2025. China and Indian economies’ GDP will rise to 28% and 17%, respectively (Cravens & Piercy, 2012). This is because the two eastern countries have not stretched their factors of production, such as labor, technology, and the market, as compared to the US. This means that the shift will continue as the Indian and Chinese economies become more competitive than the US in terms of skills, cost of production, and readily available market (Wang, 2007).
The youthful and innovative Indians and Chinese are very optimistic that the economic shift will propel the two countries to become the new global business and innovation leader. The youths in the two countries are well-positioned to tap into the underutilized knowledge skills to acquire competitive standing in business incubation and expansion since India and China have a very large population that will provide the much needed ready market for the technology-based products creating the youths.
The motivated generations of youthful Chinese and Indian citizens are likely to transform India and China into the next United States by utilizing the current enormous technological and business capacity that is supplementary to create the first high quality and innovative incubational business opportunities (Cravens & Piercy, 2012). These changes will test industrialized nations’ true commitment to global and open trade since the surplus production, competitive cost of production, and high-quality, innovative products will be exported to all corners of the globe (Jagdish & Arvind, 2012).
The challenges that China and India are facing, even with their education success, include environmental sustainability as a result of pollution, which causes millions of deaths in the two countries. The communist governance model in China may collapse due to increasing dissent on limited democratic space, unpopular government policies, and corruption. India is also under threat of political backlash should the fragile internal democratic space between the Muslims and Hindus escalate into internal violence. The third challenge facing India and China is inadequate healthcare due to the blotted population, which creates a constant strain in medical service delivery (Cravens & Piercy, 2012).
The strained medical infrastructure and limited pension plan within the two countries might lead to a medical crisis in managing ailments such as Aids, infectious diseases, tuberculosis, and avian flu due to the inability to quickly mobile response. The fourth challenge is the global financial crisis, such as the one experienced in the year 1991 and 2006 might dampen economic gains made (Cravens & Piercy, 2012). The last challenge facing India is war should the current tension with Pakistan escalate into a nuclear catastrophe. The tension between China and Taiwan might result in war with current business partners such as Japan and the US who have interests in the Taiwan Strait (Cravens & Piercy, 2012). This might destroy the current business partnership among these territories (Jagdish & Arvind, 2012).
“China and India: Opportunities and Challenges” Case Study Summary
The case study, China and India: Opportunities and Challenges, the current economic position and predict a shift in economic power from the west to east as the two countries continue to position themselves as the next economic powers. The case study presents the continued shift of economic power from west to east due to the invaluable role of innovation, quality, competitive productivity, infrastructure, business incubation, and a large ready market. Besides, India and China have experienced simultaneous takeoff as China assumes the role of manufacturing giant while India takes the role of leading technology and service industries. India has better banking industry while China’s competitive market continues to lure more investments.
Though China is a head of India, this trend might change in the near future due to its younger work force. The increasing economic power in the two giants is related to the ability of India and China to complement each other. Besides, the consumers are rising in the two countries. For instance, India and China have more than 500 million internet and cellular phone users besides arise in the young professional in the fields of engineering, finance, and life sciences, which are market oriented. The article predicts that the GDP of China and India will be 28% and 17% by 2025 against the shrinking of countries in the west due to expanding economies. Despite these opportunities, India and China are faced with growth obstacles such as environmental sustainability, political backlash, strained health infrastructure, financial crisis and war. These factors may slow down the projected rise in the GDP of India and China.
References
Cravens, D., & Piercy, N. (2012). Strategic marketing (10th ed.). New York, NY, McGraw-Hill.
Jagdish, B., & Arvind, P. (2012). Economic reforms: How they produced inclusive growth. London, UK: Oxford University Press.
Wang, W. (2007). Integration and innovation orient to e-society. New York, NY: Springer.