With the BRICS nations hosting a diverse palette of countries, each with their own unique economic and social climates, how are India and China tackling the problems of attracting and maintaining economic growth? We look at some trends in social and developmental policy that have been having an affect.
The BRICS nations represent over 40% of the world’s population, account for 18% of global trade, and have attracted 53% of global financial capital in 2012. With this kind of economic muscle, the BRICS nations have firmly established themselves as economic powerhouses within the global market.
Earlier we examined the kind of conditions which allow emergent economies to breakout into leading economies. Turning our attention to the current growth status of both India and China, we can examine themes in their approach to maintaining and improving their economic positions.
China is the largest training partner in the BRICS nations, and with a GDP of about $5.87 trillion, China is the world’s second largest economy. While growth has been steady over the past decade, China is in fact interested in slowing their growth over the next few years. Pressure from an ageing population and low birth-rate has helped shape the decision for China to focus on sustainable growth through increased domestic consumption of goods, and less reliance on international exports.
As China works to slow their elephantine growth and establish new spending practices to support their internal infrastructure, India is taking strides to assure their continued ascent in the global market.
India’s economy is forecast to grow between 8% and 9% in 2012. While global investment of capital is high in response to India’s $1.7 trillion GDP, there are concerns that the country should focus on improving their scientific workforce, lest their best and brightest migrate to greener pastures. With a scant 0.25% of India’s GDP being spent on research and development, there are calls to improve education funding in order to maintain a sustainable pipeline on scientific research. Through education and development, India hopes to strengthen interior infrastructure to continue attracting global investment and spur further growth.
Both India and China take very different approaches to their growth management, tailored to the needs of their individual circumstances. However, both are focused on maintaining and improving their positions in the global economy. With some talks of a South-South Bank or BRICS Bank being established to represent the nations involved, it may be the time for nations to focus on how their individual interests can be stimulated through mutual collaboration.