China, India and the World Economy
Among countries with at least 10 million people in 2003, China and India have been
growing very rapidly since 1980.
The World Bank (2005, Table 4.1) reports that China’s
GDP grew the fastest at an average rate of 10.3% per year during 1980-90, while India’s grew
Of the five countries that grew faster than India during this decade, none did so
subsequently during 1990-2003.
In the latter period, China’s GDP again grew fastest at the
rate of 9.6% on an average per year, while India and Malaysia, at 5.9% per year, were the
third most rapidly growing countries, with Mozambique at 7.1% being the second.
04, India’s GDP growth rate jumped to 8.5%, fueled by recovery from a severe drought in the
The estimated growth rate for 2004-05 is 7.5% and the projected rate for 2005-
06 is 8.1% (CSO, 2006; RBI, 2006). China’s GDP growth rates, based on revised data, were
10.1% and 9.9% respectively in 2004 and 2005 and the projected rate for 2006 is 9.2%
(World Bank, 2006, Table 1).
Thus both countries continue to grow rapidly.
In terms of absolute level of Gross National Income (GNI) at Purchasing Power Parity
(PPP) exchange rates in 2003, China, with $6.4 trillion in GNI, was second largest in the
World, second only to the United States at $11 trillion.
India with $3 trillion in GNI was
fourth after the U.S., China and Japan (3.6 trillion) (World Bank, 2005, Table 8.1).
It is likely
that in 2005, India replaced Japan as the country with the third largest GNI.
IMF (2005, Box
1.4) estimates India’s share in global output at PPP exchange rates to have risen from 4.3% in
Samuel C. Park, Jr. Professor Economics, Yale University and Visiting Senior Fellow, Stanford Center for
I thank Nicholas Hope, Kaoru Nabeshima and Shahid Yusuf for their comments on
an earlier version.