The Analysis Of The Complement And Competitiveness Of Industry Between China And India

In the background of globalization of economy, China, as one of the two biggest developing countries in East Asia, it has its own characteristic model of industry development like India. And form a relationship of industry compensation between two countries, in order to launch bilateral trade. At the same time, because trade structures of the two countries are similar, and to some extent they compete with each other in the world market. So India and China establish a relationship of competition and cooperation.Make a comprehensive survey of the process of industry development in India and China, we can find the origin of this relationship. Both China and India are influenced by Soviet Union's model, and want to become a powerful industrial country. But Chinese industrialized process begins after"the first five-year plan, the building up the country. But India is limited by agricultural problems; it is 10 years late than China in industrial process. Compared with China, India's high level in service industry shows its particular mold and strength in economic development. So the industry development structure is very clear: Industry is the core of the industrial structure in China, but service industry is the core in India.The difference of industrial structures is the main reason why the two countries form a complement relationship. So the complement departments in the two countries must be industry of China and service industry of India. That is to say, Chinese industrial products can be exported to India, at the same time, Indian service industrial products are exported to China, and the two countries have the condition to transfer their superior industry. Complement of the two countries is also represented in the bilateral trade of agriculture and domestic animal industry. China has great need in this industry.The economic foundation and resources in the two countries are similar, some of the superior products are the same. And they have similar trade structure for the third market. So there must be competitiveness between the two countries. And it can be seen from the American import market, because America is the biggest export market of the two countries. But at present these two countries are not of the same importance. In short term India cannot catch up with China in scale, so competitiveness between two countries is not obvious.It is sure that we cannot avoid competing, but we are more likely to cooperate with each other. At the basis of complement, bilateral trade between India and China will develop well. Although there are some trade obstacles between the two countries, in the background of political multi- polarization, with the mutual efforts of two governments, their relation develops towards a totally new direction, and they must have a good future.There are three parts in this paper. In the first part we analyze the differences of process and present situation of industrial development between India and China. Firstly we compare the six stages in the process of industrial development between two countries. And reveal the industrial structure and development trend in each stage of two countries; then contrast the present situation of industrial development, we get three conclusions: one is that the two countries form characteristic industrial structures after adjustment. That is to say Chin form a structure of secondary industry especially manufacturing industry as a superior industry. Service industry especially software service industry is the superior industry in India. Secondly, the overall economy and the increased level of each industry in China are much better than in India. Thirdly, compared with average level of the world, the two countries'industries are still in low level. Second part analyzes the complement and competition of the two countries. We analyze the complement from three aspects. The first one is from the aspect of the development of bilateral trade; the second one is on the basis of the statistics and data to analyze the main complement departments, in order to explain the differences of the superior industries are the premise of complements. The third one is to analyze the reasons of complements. The stages of economic developments have grades. The differences of the ways of industrial developments and foreign trade strategies are the main reasons.Competitiveness is analyzed from three aspects: the first one is to analyze the competitive departments according to the statistics. And also indicate that there are competitiveness in energy resources industry, spinning industry, automobile industry and pharmacy. Second, we analyze the performance and features of competition between two countries. That is India and China has a competitive relationship in the overall trade structures. This point of view is tested by analysis. The main features of competitiveness of the two industries are that industrial finished products are more competitive than primary products.And it can be seen form weight and increasing trend of finished products and primary products. Third, we analyze the main reason and trend in industrial competitiveness. Point out that overlap of the local structure for export increases the competitiveness, but the scale and increase of foreign trade lessen competitiveness. The third part looks forward for the future of cooperation of bilateral trade. First we describe the basic trend of bilateral trade, get a conclusion that the bilateral trade speed is fast, the scale is enlarged, China has a positive balance in bilateral trade, but not so much. The two countries have much cooperation in economy and technology. And the fields are also enlarged. It has these three features. Second we analyze the advantage factors in bilateral trade between the two countries. There are three factors: first is the two countries have natural conditions. The second one is the fast development of economy make more space for bilateral trade. The third one is the two countries built a good environment for bilateral trade. Then we analyze some disadvantages, there are three disadvantages. The first one is competitiveness of trade structure limit the scale of bilateral trade. The second one is India has a high trade barrier. The third one is the two countries don't understand each other so much, and there are risks in market. At last we give the ways to launch bilateral trade between India and China. At first we should strengthen complement trades, combine the competitive business. The second one is to pursuit opportunities of investment in use of economic complement. The third one is to enlarge bilateral trade by building a free trade district between China and India. The forth one is to make Chinese enterprises further understand India, in order to expand the market.At the end of this paper, I point out objectively that: at present that are some limitations in the developments of industry both in India and China. So the two countries should draw lessons from the each other's experiences to overcome the weakness. Of course we can not avoid competitiveness, but making use of the complement of industry o f two countries, and launching bilateral trade are the important ways to strength national power and gain mutual benefits.