The Elephant and the Dragon | Robyn Meredith

Summary of: The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us
By: Robyn Meredith

Introduction

Dive into the remarkable economic journeys of China and India in Robyn Meredith’s ‘The Elephant and the Dragon: The Rise of India and China and What it Means for All of Us’. This book summary takes you through key historical events and decisions that shaped the rapid economic growth of these two Asian giants, as they transformed into global economic powerhouses. It delves into China’s shift from an isolated, impoverished nation to a global manufacturing hub, as well as India’s evolution into a significant player with a robust service industry. Learn about the implications of their astonishing growth on the economies of the West, the environment, and global competition.

China and India’s Economic Growth

The book highlights the divergence between China and India’s economic growth and how it affected their citizens. In 1978, China removed restrictions on the economy, allowing foreign investments and manufacturing plants to grow, while India continued with an unproductive course. By 2003, China had invested $700 billion, and millions of Chinese had access to disposable income and could afford to buy cars and electronics. Meanwhile, many Indians lived in poverty. Despite India having democracy and a standardized legal system, China’s economy surpassed theirs by 100%.

India, China, and Business Growth

The economic growth in India and China have been unprecedented over the years. India, despite its capitalist traditions, moved from a bureaucratic economy to a pro-business stance in 1991. China, on the other hand, always had a pro-business stance despite its communist origins. Together, they have become the fastest-growing economies in the world. With this growth comes super-low prices on products, job loss in the West, and increased pollution in both countries. Western companies now look for future workers and customers in these two Asian giants.

China’s Economic Transformation

China has established itself as the world’s leading manufacturer, with its centralization typical of other industries manufacturing in the country. In its quest to become a steel powerhouse, it implemented agrarian reforms that saw the rise of massive corruption across regional officials, causing famine to spread from 1959 to 1962 and leading to the death of millions of peasants. However, China reinvented itself under Deng Xiaoping’s leadership, who instituted agrarian reforms that transitioned into a national rebuilding effort and the development of modern “export-friendly” infrastructure, leading to the country’s transformation to a robust market economy. Today, China’s low labor costs attract Western-branded goods’ massive new market while driving global manufacturing.

China and India’s Changing Manufacturing Landscape

China and India have become influential forces in the manufacturing industry by implementing a subassembly process. This process involves breaking down products into separate components and relying on widespread plants for production and assembly. China, having access to every modern manufacturing facility, low-cost labor, and reliable transportation infrastructure, gained a substantial chunk of the world’s subassembly production work. India, on the other hand, became a back office to the world, thanks to its invisible human infrastructure that has reconnected it to the global economy. Through this manufacturing tactic, manufacturers cut production costs significantly, as different plants worldwide add different parts to the same product. This tactic has enabled giant retailers to order products efficiently, where they can buy raw materials from one country, and different production plants worldwide handle different product components. The world’s manufacturing landscape has witnessed a dramatic shift, and China’s communist leadership deserves the credit for China’s radical transformation.

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