From the historical perspective, in the colonialism era, Asian deindustrialization was due to the pooled effect of at least two factors. First, the unequal terms of trade and commerce that the colonial home countries imposed by force: competition from European manufactured goods on the Indian and Chinese markets had taken place in a context of free trade that was anything but free, since the colonies were compelled to open their borders unilaterally to European product without any quid pro quo.
Second, Europe had acquired a decisive lead in technology: mechanization brought major increases in productivity, resulting in an explosive growth of manufactured goods with lowered production costs. China and India have adopted a measured and gradual approach to liberalization in order to shift to more productive economies and pro big business approach.
In the last decade investment in China generated a lot more growth than in India where average investment rate in China was 60 per cent higher than in India its growth exceeded that of India by a greater margin This relation appears to have been reversed in the more recent period as China deepened its integration into the global economy at a faster pace, and experienced a surge in inflows of FDI, an investment boom and rapid growth of exports and imports. Between and , Investment in India has generated more growth than in China.
Growth miracles are a result of a dramatic shift towards more productive firms and better forms of industrial organization. These same types of situation also translate to India and China where India lead the market in offshored back-office services, but as a manufacturing center it lags behind China, Thailand, and the rest of Asia. With high-skill sectors accounting for almost 40 percent of the manufacturing output of India, it is in a good position to absorb some of that increase.
In a few important segments such as customized performance chemicals, including advanced printing inks and adhesives , domestic demand is rising as well. In India only 1. Pooled with the generally low level of suitability among Indian graduates, this means that India could face an overall shortage of engineers in the next few years, with a particular squeeze in certain cities.
