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Economic Reform in China & India – Joseph C. H. Chai

About this book

With rapid change occurring in both India and China, this systematic review of reform and development is a welcome addition to the economics literature. Both are continental economies in the process of replacing planned allocation with markets, but they have many differences that need to be taken into account. Having two authors with impressive experience collaborate on this study of Economic Reform in China and India is a promising strategy. A strong point of this book is that it is comprehensive in its coverage of both economies, and provides a useful starting point for researchers looking at either China, or India, or comparison projects.

The argument put forth by Joseph Chai and Kartik Roy is that India was doing better in the 1950s in most respects, but today China is more advanced on many fronts, and that overall the authors feel it is unlikely that India will catch up. Relying primarily on data comparisons, the authors cover major economic and social sectors to support this thesis.

The book does not have a unified theoretical framework, but some of the analyses in individual chapters draw on specific economic models. The first two chapters describe initial conditions in both economies in the beginning of the 1950s, the economic systems that were built under the 2import substitution years, and then the strategies taken once reforms were begun in the 1980s.

The authors argue that both India and China wanted growth with equity throughout the period from the 1950s until reforms, and that both pushed self-sufficiency, planning and government administration of resource allocation. Neither was very successful. Both economies became inefficient and corrupt, and while growth was higher in China, the results were not substantially more impressive.

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