Dancing with the Giants: China, India, and the Global Economy
This report takes a dispassionate and critical look at the rise of China and India, and asks questions about this growth: Where is it occurring? Who is benefiting most? Is it sustainable? And what are the implications for the rest of the world? The...
| Main Authors: | , |
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| Format: | Publication |
| Language: | English en_US |
| Published: |
Washington, DC : World Bank
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/01/7313934/dancing-giants-china-india-global-economy http://hdl.handle.net/10986/6632 |
| Summary: | This report takes a dispassionate and
critical look at the rise of China and India, and asks
questions about this growth: Where is it occurring? Who is
benefiting most? Is it sustainable? And what are the
implications for the rest of the world? The book considers
whether the giants' growth will be seriously
constrained by weaknesses in governance, growing inequality,
and environmental stresses, and it concludes that this need
not occur. However, it does suggest that the Chinese and
Indian authorities face important challenges in keeping
their investment climates favorable, their inequalities at
levels that do not undermine growth, and their air and water
quality at acceptable levels. The authors also consider
China's and India's interactions with the global
trading and financial systems and their impact on the global
commons, particularly with regard to climate. The book finds
that the giants' growth and trade offer most countries
opportunities to gain economically. However, many countries
will face strong adjustment pressure in manufacturing,
particularly those with competing exports and especially if
the giants' technical progress is strongly export-
enhancing. For a few countries, mainly in Asia, these
pressures could outweigh the economic benefits of larger
markets in, and cheaper imports from, the giants; and the
growth of those countries over the next fifteen years will
be slightly lower as a result. The giants will contribute to
the increase in world commodity and energy prices but they
are not the principal cause of higher oil prices. The
giants' emissions of CO2 will grow strongly, especially
if economic growth is not accompanied by steps to enhance
energy efficiency. At present, a one-time window of
opportunity exists for achieving substantial efficiency
improvements if ambitious current and future investment
plans embody appropriate standards. Moreover, doing so will
not be too costly or curtail growth significantly. From
their relatively small positions at present, the giants will
emerge as significant players in the world financial system
as they grow and liberalize. Rates of reserve asset
accumulation likely will slow, and emerging pressures will
encourage China to reduce its current account surplus. |
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