EconPapers    
Economics at your fingertips  
 

China's and India's roles in global trade and finance: twin titans for the new millennium?

Arnaud Mehl () and Matthieu Bussiere ()

No 80, Occasional Paper Series from European Central Bank

Abstract: This paper analyses the integration of China and India into the global economy. To this end, it presents estimates from a gravity model to gauge the overall degree of their trade intensity and the depth of their bilateral trade linkages, as well as selected measures of revealed comparative advantage and economic distance. The paper also reviews the key characteristics of the two countries' domestic economies that are relevant to their global integration and analyses their financial linkages with the rest of the world. Four main findings stand out. First, considering trade in goods, the overall degree of China's trade intensity is higher than fundamentals would suggest, whereas the converse is true for India. Second, Chinese goods exports seem to compete increasingly with those of mature economies, while Indian exports remain more low-tech. Third, China's exports of services tend to complement its exports of goods, while India's exports are growing only in deregulated sectors, such as IT-related services. Last, China's and India's roles in the global financial system are still relatively limited and often complementary to their roles in global trade. JEL Classification: E44, F3, C5

Keywords: China; competitiveness indicators; global finance; global trade; gravity models; India (search for similar items in EconPapers)
Date: 2008-01
Note: 501438
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpops/ecbocp80.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbops:200880

Access Statistics for this paper

More papers in Occasional Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().

 
Page updated 2021-08-30
Handle: RePEc:ecb:ecbops:200880