Comparing and Explaining the Respective International Competitiveness of China and India

　　Li Gang, Associate Research Fellow, Institute of Industrial Economics, Chinese Academy of Social Sciences; Dong Minjie, PhD Candidate, Graduate School, Chinese Academy of Social Sciences

　　Abstract: This article compares the overall international economic competitiveness between China and India. Be it from economic indicators or social surveys, China is currently at a higher level of developmental stage than India.In terms of their relative international competitiveness in the manufacturing sector, China exhibits stronger overall international competitiveness than India. Service sector-wise, two observations are pertinent: first, in most years, the service sector in India is more competitive internationally than that in China; second, the main source of China’s international competitiveness in the service sector lies in its competitive advantage. Although China’s overall competitiveness of its service sector is weaker than that in India, its competitive advantage is far greater, meanwhile its comparative advantage is weaker than that of India because of the rapid development of China’s manufacturing sector.Towards the end, the article explains the differences in economic competitiveness between China and India from six approaches: quality of labor, basic infrastructure, government’s role, societal heterogeneity, religion and culture, and the effects of diasporas.