China and India: A Comparative Study of Economic Development Stage

　　ABSTRACT: The implementation of China’s reform and opening-up policy since 1978 and India’s new economic policy since 1991 marked the new process of the economic development of the world’s two big developing countries under open conditions. Opening to the outside world means that these two countries will introduce the external market into their economic growth as a new independent variable. In the initial stage of opening to the outside world the external market, played the decisive role, which led to their different options of development path in a new round of economic development. China’s choice was to take the traditional path of industrialization through the development of manufacturing industries to finish the initial stage of industrialization while India took the non-traditional path of industrialization to choose services as a priority to drive its economic growth. In the next stage, China’s domestic market will take the place of the external market to drive economic growth and China will continue its “standard” process of industrialization, while India is still in stage of economic development driven by the external market, which indicates that India’s services will continue their rapid growth and in the meantime India will promote the manufacturing sector to start the traditional process of industrialization.