Vietnam - Netherlands Programme

The rapid growth of the Chinese and the Indian economies over the last quarter- century has transformed them into dominant growth engines for the global economy. The two economies have different institutional structures, and they have been following different growth strategies. This study examines the factors and forces behind the two countries’ economic transformation over recent years with a view to identifying their strengths and weaknesses, and assessing how they are likely to fare in the years ahead. In particular, the contributions of factors accumulation and factor productivities to the two countries’ growth processes are analysed, as are the influence of demand side factors such as the shares of domestic demand and net international trade in the observed growth. How the two giants measure up in terms of the wellbeing of their peoples – the crucial test of a country’s development – is also discussed in the study.