There are a number of reasons why China and India are so important to international business. Firstly, they are two of the most populous countries in the world, with a combined population of over 2.5 billion people. This provides a huge potential market for businesses to sell their products and services to.
What is the economic ties between China and India?
Economic ties between China and India will play a large role in one of the most important bilateral relationships in the world by 2020. Bilateral trade has already surged from under $3 billion in 2000 to nearly $52 billion in 2008 (see Table 1).
What matters most to Western companies dealing with China and India?
What matters above all to a Western company is the quality of decisions made in respect of dealing with China and India as partners in increasingly global supply chains. Though India has made well-publicised progress in technical and business education in the past twenty to thirty years, China has not held back.
Why do India’s largest IT companies invest in China?
Though India has emerged as a global powerhouse in information technology (IT) and IT-enabled services, language differences create natural barriers to the export of these services from India to China. Thus, many of India’s larger IT companies invest directly in local operations within China.
Is China leading the way in technical and business education in India?
Though India has made well-publicised progress in technical and business education in the past twenty to thirty years, China has not held back. Starting more recently, the level and pace of investment have been breathtaking.
Why is China so important to international business?
China is a major hub for world trade. Given its huge land mass, population, a large growing economy, and strategic ports, it lends itself freely to huge International trade. The top Chinese imports from the world are electronic equipment, oil, machinery, mined raw material, and medical and scientific equipment.
Why India is good for international business?
India today presents a great investment destination to any international business, thanks to its large economy, huge consumer market, and abundant skills and talent. What is even more exciting though is the potential. Economists predict it will be the world's 3rd largest economy and 3rd largest consumer market by 2030.
Why is China and India special?
China and India are two of the major regional powers in Asia, and are the two most populous countries and among the fastest growing major economies in the world.
Why is India important to the global economy?
India's economy is of global importance. It has a large and young population and an open and democratic political system. It is already the third largest economy and contributor to global economic growth, yet there is considerable untapped potential.
How is India's international business attractiveness?
Since the economic liberalisation began in 1991, the Indian government has eased the country's investment policies and introduced favourable initiatives; therefore, been successfully in making India an ideal investment hub for foreign investors.
What is the role of India in world trade?
What is the role of India in WTO? Thus, India leads efforts to reform WTO subsidy rules to enable developing countries to engage in public food stockholding for food security purposes. It also calls for making the multilateral trading system more fair and inclusive.
What is the current relationship between India and China?
India and China's relationship is known to be contemporary and conflicting; there have been 3 military conflicts between India and China, The Sino-Indian War of 1962, the border clashes in Nathu La and Cho La in 1967, and the Sundorong Chu Standoff in 1987.
Why do China and India have such large populations?
The short answer is both the Indian subcontinent and large swaths of the Chinese landmass unfolded paradise on earth for early human beings. Relatively large human populations in both places date back to the further reaches of the ascent of man.
What will happen if India and China become friends?
If India and China were friends, the shape of the region around them would have been vastly different-at peace with itself and vastly more developed, with flourishing regional trade. Together, they could have been a calming influence on the world.
How much does India contribute to the global economy?
Share of Indian economy is 7.5% of world economy by PPP terms. 1,417,173,173 (2nd; 2022 est.) $3.469 trillion (nominal; 2022 est.)
Why is India's economy so strong?
In 1991, India began to loosen its economic restrictions and an increased level of liberalization led to growth in the country's private sector. Today, India is considered a mixed economy: the private and public sectors co-exist and the country leverages international trade.
What is the position of India in global economy?
The data availability for the country has been very poor over the decades. A simplistic reading of the above table might suggest that India's position has improved tremendously between 2011 and 2022 when the global rank improved from tenth to fifth.
Is India good for doing business?
At present, India is considered as one of the major forces in the global economic market as it stands in the 6th position in the growing international economy. The Indian economy has a major impact on the global market.
What are the international business in India?
Scope of International business in India in following sectors: Information Technology and Electronics Hardware. Telecommunication. Pharmaceuticals and Biotechnology.
What holds India back in the domain of international business?
India is blessed with several comparative advantages: a burgeoning middle class; low labor rates between $0.92 and $1.45 per hour; around 80 million people with basic English-speaking ability; a 2,000-year history of international commerce; abundant sunshine and rain; and a diaspora of 23–25 million that facilitate the ...
What are the advantages of India?
India today is considered to be one of the major forces in the global economic market....Large Population:Comprehensive Tax System:Business friendly Laws:Low Operational Cost:Indian Financial System:Vast Trade Network:Strong base of English-speaking population:Indian Work Ethics and Working Class:More items...•
Which is stronger, China or India?
2. Complementary strengths. China is much stronger than India in terms of physical infrastructure and manufacturing efficiency — its manufacturing sector is five times as large as that of India — whereas India bests China in software development, IT-enabled services, and many types of analytical and knowledge-intensive tasks such as legal research, finance and accounting, and advertising.
Why is a combined market strategy for China and India important?
A combined market strategy for China and India is particularly important when a company’s cost structure depends on significant economies of scale and when profit margins are razor thin. This is increasingly the case for makers of inexpensive products targeted at the middle- and low-income segments of emerging markets.
What are the implications of Cisco?
The implications for Cisco are clear. It must develop a counterstrategy that rests on at least three legs: innovating faster than Huawei, drastically reducing its cost structure to match or beat Huawei’s low prices, and then riding these gains to attack Huawei in both of its key markets — China and India. 2.
What will China and India do in 2025?
By 2025, it is highly probable that China–India economic ties (composed of trade, investments, and technology linkages) may be among the five most important bilateral relationships in the world. The rising dragons and tigers from China and India will be one set of beneficiaries.
How much will China and India trade in 2015?
Even if the growth rate in China–India trade slows down to 25 percent annually from its current rate of about 50 percent, bilateral trade will reach almost US$75 billion in 2010 and $225 billion in 2015 — equal to China–U.S. trade just three years ago. And investment between India and China is likely to grow even faster than trade.
Is China a trade partner with India?
Few people outside these two nations are aware that China is India’s number one trading partner and India is among China’s top 10 trade relationships.
Is Huawei a competitor to Cisco?
Huawei is one of Cisco’s most aggressive global challengers ; indeed, in 2003, Cisco sued Huawei for stealing its source code and using it in competitive routers and switches. The case was dropped nearly 20 months later, after Huawei agreed to discontinue the products. Between 2003 and 2007, Huawei’s annual revenue grew from about 20 percent of Cisco’s to nearly half. Huawei’s increasing competitive advantage rests heavily on cost leadership, which derives primarily from the fact that the bulk of its R&D and manufacturing operations are based in China. With its lower-cost product portfolio, Huawei is attractive to customers in emerging markets. In fact, in 2007, the Chinese company generated 72 percent of its revenues from outside China, largely in developing countries.
How will Western companies achieve success?
In other words, low-skill transactional-type jobs and activity will migrate Eastwards simply because this is a rational consequence of ever-opening economies, and at the same time there will be a compensating increase in the demand for higher-skill services that are used in the creative configuration and rapid re-configuration of such services – predominantly in designing and managing internationally competitive supply chains. Such supply chains are not restricted to materials and products: they include, inter alia, information and finance. It is through competency in the management of high-skill value-adding activity that the future of Western business is to be developed if our companies, large and small, are to compete successfully in the global economy.
What is the Indian phenomenon?
The “Indian phenomenon” has been concentrated on engineering technology. Hence we have seen the emergence of a very effective and internationally competitive software and I.T. community abound Bangalore, and it is often assumed that this is becoming typical of India. It is not. Much of Indian industry is still old-fashioned and, worse, it is stifled by a structure of bureaucratic management coupled with high levels of vertical integration that is over a century out-of-date. Thank goodness labour costs remain low, because structures and management approaches are intrinsically uncompetitive in whole sectors of the economy. Low labour cost is to a significant extent a compensator for systemic inefficiency, and the problem will come when labour rates begin to rise, as will naturally happen as the country becomes more developed. Just as significant is the fact that the “Indian miracle” is manifest principally in product that can be delivered electronically rather than physical product. It is in this latter type of product that the deadening impact of bureaucratic systems is found. Any advantage of low cost for highly and non-so-highly skilled direct and indirect labour can quickly be outweighed by the transaction costs and delays incurred in operating through unresponsive, high-cost administrative systems.
What is the essence of the intensive pattern of economic growth?
The essence of the intensive pattern of economic growth is that resource productivity increases along with growth in output and consumption and a greater rate – in other words there is a better than 1:1 relationship between growth in outputs compared with inputs. This characterises developed economies throughout the world.
What are the two purposes of the White Paper?
The two purposes of this White Paper are (i) to compare and contrast the high growth rates in the two countries and (ii) to assess the likely outcomes and impact.
Where is B2B International located?
Against this background B2B International has opened an office in Beijing, China. It has two main business thrusts: (i) to undertake market research for Chinese companies on the China market and (ii) to undertake market research for non-Chinese companies looking to enter the market directly or via collaborative venture. The concepts of marketing and consequently of market research are still in their infancy in China, but the speed with which Chinese companies and managers are taking on board the tools and techniques that we take for granted is truly astounding. It is also part of the impact of globalisation on the market research business itself – we are finding that an increasing part of our market research work is concerned with markets for investment and opportunities for sourcing and operational collaboration as well as with opportunities for exporting products to China.
Is India insulated from global downturns?
The big issue in all this is that India has relied considerably on a combination of growing domestic market demand and investment in knowledge-intensive industry and services, which has meant that India has been to a great extent insulated from global downturns affecting physical trade.
Is China's savings rate high?
The savings rate in China has been exceptionally high, and the level of credit in relation to GDP has been very low by world standards. The level of consumption had fallen to 38% of GDP by the end of 2005, just about the lowest level of any major world economy.
Bilateral Trade Blossoms
Drivers of Bilateral Trade
- There are two primary drivers of the burgeoning trade between China and India: differing comparative advantages of the two countries and sustained, high growth rates in both economies. Comparative advantages The different comparative advantages of the two countries provide grounds for strong economic exchange. Although China’s economy is three time...
Emerging Investment Linkages
- Unlike trade, levels of investment between China and India remain relatively low. Though an estimated 100 companies from each country have offices in the other, cumulative bilateral FDI is less than $500 million. Cross-border investment remains low because Chinese and Indian companies are still in the early stages of learning how to operate and succeed in each other’s ec…
Deeper Integration Ahead, But Distrust Lingers
- Two developments could lead to even greater momentum for Sino-Indian economic integration. Larger companies in both countries are increasingly acquiring third-country companies that already have a presence in China and India. For example, Tata Steel Ltd. in 2004 acquired NatSteel Holdings Pte Ltd., a Singapore-based steel manufacturer that already had two steel mills in Chin…
Implications For Multinational Corporations
- The rapid rise of China and India, and the growing economic integration between them, has clear implications for US, European, and Japanese multinational corporations. Companies must decide how best to leverage the growing power and economic integration of these two economies. To do so, companies can: 1. Go after the middle-income marketProducts for this market must be inexp…