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Rapid and Phased Trade Liberalisation Pathways to Economic Growth: Evidence from China and India


Affiliations
1 Professor, Business Administration Discipline, Khulna University, Khulna, Bangladesh
2 Assistant Professor, Human Resource Management Discipline, Khulna University, Khulna, Bangladesh and Doctoral Researcher, Adam Smith Business School, University of Glasgow, United Kingdom
     

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This paper investigates the hypothesis that there is an association between increased levels of trade liberalisation and economic growth through a comparative analysis of two giant emerging economies of the world – India and China. For this purpose the paper examines trends in GDP growth and various trade openness measures via empirical analysis of time-series data of the last 43 years, based on eight key indicators to compare the experiences of the two countries. These indicate that rapid and gradual trade liberalisation of both the countries, coupled with supporting economic, institutional, and infrastructural reforms, and advancement in technology led to the linking of these giants with the global markets, which has significantly contributed towards their economic growth, thereby supporting the phenomena that there is a significant positive relationship between liberalisation and economic growth. While China was seen to be experiencing growth, India was also on the right track. Indicators of both liberalisation and growth reveal that both the countries enhanced their economy significantly as they embraced international trade through trade reforms and economic liberalisation.

Keywords

Trade Liberalisation, Economic Growth, India, China
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  • Rapid and Phased Trade Liberalisation Pathways to Economic Growth: Evidence from China and India

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Authors

Tarun Kanti Bose
Professor, Business Administration Discipline, Khulna University, Khulna, Bangladesh
Jannatul Ferdous Bristy
Assistant Professor, Human Resource Management Discipline, Khulna University, Khulna, Bangladesh and Doctoral Researcher, Adam Smith Business School, University of Glasgow, United Kingdom

Abstract


This paper investigates the hypothesis that there is an association between increased levels of trade liberalisation and economic growth through a comparative analysis of two giant emerging economies of the world – India and China. For this purpose the paper examines trends in GDP growth and various trade openness measures via empirical analysis of time-series data of the last 43 years, based on eight key indicators to compare the experiences of the two countries. These indicate that rapid and gradual trade liberalisation of both the countries, coupled with supporting economic, institutional, and infrastructural reforms, and advancement in technology led to the linking of these giants with the global markets, which has significantly contributed towards their economic growth, thereby supporting the phenomena that there is a significant positive relationship between liberalisation and economic growth. While China was seen to be experiencing growth, India was also on the right track. Indicators of both liberalisation and growth reveal that both the countries enhanced their economy significantly as they embraced international trade through trade reforms and economic liberalisation.

Keywords


Trade Liberalisation, Economic Growth, India, China

References