China and India have become strong competitors in the world of economy. With their growing economy, many old powerhouses are flocking to invest in their countries. In the last decades, China and India had the highest growth rate; they are catching up to Japan and the United States. Many imports to the U.S. have been from China. In the past China was a centrally planned economy. The economy was controlled by the state, which set prices and production goals. China wanted to be self-sufficient and had only limited foreign investment for the resources that could not have been produced in China. This was not working for China and didn’t allow them to expand and grow. India has modeled China’s Special Economic Zones for their own use. Its goal for India was to make its rural areas to have developed new industrial areas to make different routes of agricultural employment. India is depending on the services that it provides to help grow, while China has its manufactured good and construction to make it to the top. These two countries are battling it out for the stop in the WTO.

Each country have implemented different polices that would allow them to achieve this success in a short period of time. China developed similar to the western economies by beginning with agricultural reforms and going from there. China began with allowing farmers to sell parts of their crops on the free market and then establishing economic zones to help attract foreign investors. The Special Economic Zones include a Free Trading Zone, Exporting Process Zone, Free Zone, Industrial Estates, Free Ports and more zones. The SEZ had began in Shenzhen, Zhuhai, Shantou in the Guangdong Providence and expanded to Hainan. These places are the foreign-trading zone but also must be creating exchanges between different countries and gathering advance technologies to accelerate the inland economic development. In theses places there are important rules that must be followed.

1. Special tax incentives for foreign investments in the SEZs.
2. Greater independence on international trade activities.
3. Economic characteristics are represented as “4 principles”:
   1. Construction primarily relies on attracting and utilizing foreign capital
   2. Primary economic forms are sino-foreign joint ventures and partnerships as well as wholly foreign-owned enterprises
   3. Products are primarily export-oriented
   4. Economic activities are primarily driven by market forces

The SEZ’s main goal was to provide development of new industry, rapid economic growth and transfer technology to China. More workers started to search employment in the more productive manufacturing sectors after the agriculture reforms. Leading nonstate enterprises started to emerge and it pushed people to rush to the more productive activities. This moved to a greater part of the economy to be exposed to competition. The FDI involved in China boosted efficiency and brought new technology. China has an abundance of low cost, labor-intensive workers and this has given it the upper hand. Many foreign investors moved their manufacturing to China. Since they moved their companies to China it gives them lower prices and providing people with higher purchasing power, and giving the company more competition. India has stated to copy China ’s SEZ. India is trying to put it quantities restrictions to a tariff- based system that favored the most important types of products. We can see that India will continue its growth because of its steady economy growth rate of 8-9 percent and the many investors that pour in money yearly. Population in India has already bumped up from being in poverty to the “middle class”. India is trying to become more like China because they have surprised everyone by changing their ways and improving at a rapid growth that no one has seen. India has used numerous policies to lure investments by American corporation. India has been using a import licensing system to control their imported goods. Over the past years India has lowered their tariffs, reducing the rates. In the result of reducing tariff prices the Association of South East Asian Nations (ASEAN) was formed. The purpose with the association was to accelerate economic growth, social progress, and cultural development. Since India has lowered it’s import barrier it became the filing of antidumping with the WTO. The 1975, Customs Act establishes the antidumping and duty procedures. India has become own to be the “most favored nation” tariff rates, it has became very difficult for other foreign companies to get their exact price on their exports. The price of agricultural goods decreased as textiles and clothing increased. India lured American corporations by its low tariff rates, if India keeps decreasing their rates on tariff the economic growth will increase rapidly.

Even though a communist country, China has stepped up and tore down its barriers to allow many foreign investors in China and help the economy grow. China has been moving away from the communist economy and adopting small principles of free trade and privatizing many businesses. China has two systems: The centralized autocratic Communist administration and the decentralized free-market economic regime. The Communist administration is dominated by outdated ideology and military interest. This combined makes the country a corporation itself. The government is trying to combine both to allow China to grow into a powerful country and pull itself out of the poor state that it is in. Also, the Communist country is trying to decrease poverty for its people and bring them higher living standards by encouraging them to be more controlling in agricultural process and for the people living in the rural areas; they want them to be more involved in the nonagricultural activities such as village enterprises.

China given American corporations cheap labor with allows people to use less money and allow the corporation have a lead in the competition zone. The American public saved over 600 billion dollars in the past decades because of the low cost imported goods from China. American cooperation gained more economic power and lower cost on their budgets to allow them to achieve higher profits. They have moved their help-support over to India which has people who are willing to work nights so that when the American public call they will answered. These low wages that are given to the Indian people are helping their economy and allowing Americans to not have to pay for higher rates on products. There are thousands of Indian college graduates who would do this because they do not want to live the way India used to be, the life of poverty. India and China have different purposes in the pursuit of economic powers; India is focusing about the services it can provide while China has advantages in industry and constructions.

China has gained new technology, more money and a status in the world by its presence in the international marketplace. They have made people all around the world be stunned by their growth. People were amazed about how far China has come from their strict economy. China has gathered more jobs for people to have and given the people a better life. They are no longer a country in poverty, but hard working people who has gained the life they deserve. Some benefits that China has acquired are being a representative in the economic powers, playing a major role in the new international rules on trade. China has gained every year a 9.6 percent increase on their GPD. India has gained more money in the process of allowing foreign investors to become apart of the economy. India has also started to rise in the United States major exporting countries. More things that India has gained are: the monetary system is getting stronger and can almost compete with the American dollar.

American corporations have influenced China to be more caring about their workers. People are afraid that the low wages and poor living conditions are lowering the standards for those in America. Many corporations are willing to withdraw from China if they pass the law that undermines the human basic rights. The Chinese government denies the right of their citizens to ensure more economic growth. The workers of China have no social security, unemployment, or medical insure. When they get older and the workload is feeling heavier they have nothing to help them through that time. Many people are being laid off in the government owned facilities because of rebellion and social instability. Many U.S. companies closed relations with China because they are afraid that this will affect their company. China does not have a stable and reliable relation with their workers and that will affect their economy. With no workers no money can be made. American investors are also complaining to India because their labor laws are bias to the American corporations. The people are being deprived of their natural right and the American publics are forcing them to work at low wages so they are able to buy low cost things. They want these low cost so that they don’t have to pay outrageous charges to the company and pay for services that should be at no charge to them. The American people want to abolish child labor in areas that are unsafe because they should not have to be allowed to work in these hazardous areas.

China and India will grow and be apart of the global economy because they are improving so much. They want to reach their goal and nothing is going to hold them back. The G-8 leaders are creating partnerships with India and China so that they can help each other develop. The G-8 of today are concern with the global climate that will be hurt by these new gases that are being exerted by China and India through their work. People want to keep them in place but they want to strengthen the open markets. This causes a conflict because the G-8 does not want to ruin their new relationship with China and India. They want to use their rapid growing power to invest and gain some money.

The economy is taking a turn with new countries rising into power. Other economic powerhouses are supporting them into becoming more industrialized. Many people want them to stay the way they are because they allow them to have low cost items and save them thousands of dollars each year. These two countries have come a long way from their poor self sufficient country. They are now evolving into a new type of environment and trying to bring the economy level to a higher degree. The United States will have more competition and help in the world by having new countries to put out and help other countries develop.