International Business Thesis

Pages: 8 (2194 words)  ·  Style: Harvard  ·  Bibliography Sources: 8  ·  File: .docx  ·  Level: College Senior  ·  Topic: History - Asian

International Business

The objective of this work is to develop a report acting as the employees of a consulting company who have been hired by the Australian Trade Commission (AUSTRADE). Austrade's mission is to help Australian Companies succeed in International Business by providing advice, market intelligence and support to Australian Companies to reduce the costs and risk involved in the selection and development of International Market (AUSTRADE, 2008) the scenario is as follows: The writer has been hired by Austrade to write a report advising on the attractiveness of Indian and China for Australian Companies interested in developing their International Markets. India and China are two of the largest banks in the world and the fastest growing economies worldwide, however, both markets still present considerable challenges for Australian Companies interested in expanding in the region. The task is to conduct a comparative assessment of the attractiveness of these two markets based on a number of dimensions. This report will entail the review of four specific dimensions on which to base the comparative analysis. This work will conclude with a recommendation on which of the two countries will most likely present fewer risks and challenges to Australian companies considering international expansion.

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Thesis on International Business the Objective of This Work Assignment

The work of Lung-Fai Wong entitled: "Agricultural Productivity in China and India: A Comparative Analysis" relates that two of the most populous countries in the world are those of China and India as "...together they comprise more than one-third of the total population." (1987) However, it is additionally stated by Wong that these two countries, India and China "...differ greatly in economic, social and political circumstance, both emerged as net exporters of agricultural products after more than three decades of development. Each country, however, employed different strategies and reforms and, therefore, they have been great interest to economists for many years." (1987) study reported by Balasubramanyam and Wei (1987) entitled: "Textiles and Clothing Exports from India and China: A Comparative Analysis relates that a comparison of the export performance of the textiles and clothing industries in India and China using the revealed comparative advantage and the Kreinin-Finger similarity indices. The results indicate that China has much higher shares in world exports of both textiles and clothing, while India has a comparative advantage in women's clothing of various sorts and men's shirts. With the abolition of the MFA, China is likely to gain at the expense of India in most items of exports of clothing, even in categories where India has a higher market share than China. India would have to improve her competitive strengths in export markets vis-a-vis China, especially so in high value design oriented products in the EU and the U.S. markets." (2005)

In the work of Dilip K. Das (2006) entitled: "The Chinese and Indian Economies: Comparing the Comparables" relates the following facts:

1) Both China and India were noted for their prowess and prosperity in the remote past, but in the recent past they went into a precipitous decline and became marginal economies, known for large impoverished masses and economic stagnation.

2) Early in the 21st century, China and India are once again being seen as two emerging economic powers of the global economy.

3) the closing decades of the 20th century were remarkable for both the economies. China in particular turned in a stellar economic performance. In the beginning of the 21st century, it was even being seen as the economic super power of the future. It has emerged as a low-cost manufacturing juggernaut invading global markets in a sizeable array of products, with a high and rapidly rising level merchandise exports and imports.

4) in comparison, India's post-1991 growth performance has shown improvement. Although its success in the services sector exports is noteworthy, its economic performance did not match that of China.

5) the economic weight of China and its integration into the global economy is going to continue to increase, and India could follow suit. (Das, 2006)


According to 'The Market Oracle' in the work entitled: "Emerging Markets outlook for 2007 - India, China, Russia, Eastern Europe and Brazil" the following is stated for the countries of India and China, respectively:

India - India has enjoyed a volatile boom during 2007, taking the Sensex index up over 50% by year-end, after recovering from a major sell off in May. Despite a solid long-term growth story, India may be in for some consolidation over much of the coming year. The growth in India has not been followed by significant investment in infrastructure, especially with regards transport and power, which badly lags behind the developments in China. And the mistake many people are making is to term India as another China, which it is not. The implications of weak infrastructure development are expected to come to the fore of investors during 2007. So it may be worth waiting for a pull back before entering into India. As the risks of some sort of crash (albeit temporary) are much greater for India than for China, where the growth seems more robust. The fact is that the governance of the country and economy is far better managed by communist China than democratic India, despite media coverage of the 'British system', unfortunately this is also accompanied by rampant corruption in India. In summary, India will continue to grow, but also will likely experience more volatility in the stock markets than China during 2007; and China - China continues to enjoy strong GDP growth of 10% per annum, the construction boom also continues as tens of millions flock to new cities every year. This economic prosperity is leading to an ever growing middle class that is increasingly adopting western style consumer appetites. So even if export demand slackens from a slowing U.S., this looks set to be made up by increasing demand generated in the domestic economy. Hence, the gains during 2006 look set to continue during 2007 and for many years beyond, despite the occasional correction. (the Market Oracle, 2007)

The following chart labeled Figure 1 in this study shows the performance of exports between 1950 and 2004 for both India and China.

Export Performance 1950-2004 Comparison (China and India)

Source: India and China's Developmental Paths (2008)


The work of Sinha (2007) states that a review of the literature indicates that FDI patterns contributing to the growth of the emerging markets have undergone significant changes over time. The FDI patterns contributing to the growth of the emerging markets have undergone significant changes over time. The FDI trend in the last five years indicates a shift of flows from the developed world to the developing world and emerging markets. FDI is impacting development in these emerging markets in a significant way." (Sinha, 2007)

Sinha additionally relates that China has been "growing at the rate of around 9% annually consistently for more than a decade now and doubled its GDP in last six years but other countries have not seen such a consistent growth as China." (Sinha, 2007) Sinha relates that the definition of EME is a country that is taking steps toward a market oriented economy, has a per capital of less than $10k and is having a population of 1 million or more and is a market for U.S. agriculture products. This list includes China and India." (2007)

China has attracted "ten times more FDI than Indian and grown at a faster pace to become three times larger economy as compared to India. Sinha relates that the at Kearney confidence index "ranks India ($5 billion) second after China ($60 billion) in FDI attractiveness but the gap between the two seems significant and the investor confidence for India has yet to translate into actual flows comparable to China." (2007) China is stated to be "...the leader in absorbing FDI." (Sinha, 2007)

As the labor reforms witnessed in China have not yet been "undertaken in India due to political reasons and opposition from organized labor unions. China's labor market, in comparison, is far more flexible. Therefore, we expect that the process of inter-industry reallocation would be smoother in China compared to India." (Sinha, 2007) Furthermore "reallocation of resources from inefficient to efficient firms within the industry would also be slow to operate in India as the barriers to exit continue to be stringent mostly on account of the legislation preventing retrenchment." (Sinha, 2007)

The GDP in India has been primarily "driven by the service sector rather than the industrial sector." (Veeramani, 2004) China however, "followed a conventional path in transiting from an agricultural economy to an industrial economy - a pattern observed in many developed countries." (Veeramani, 2004) Industrial output presently accounts for over fifty-percent of the GDP in China, in the country of India, the GDP accounts for merely 25% of India's GDP. During the first two decades "both exports and imports were almost stagnant..." (Veeramani, 2004) India's export rates have historically grown "at a much lower rate" than world exports however, in the 1970s India's exports… [END OF PREVIEW] . . . READ MORE

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How to Cite "International Business" Thesis in a Bibliography:

APA Style

International Business.  (2008, September 22).  Retrieved February 28, 2021, from

MLA Format

"International Business."  22 September 2008.  Web.  28 February 2021. <>.

Chicago Style

"International Business."  September 22, 2008.  Accessed February 28, 2021.