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Organization, Politics and Society
In various nations, political regime is mainly imposed for the purpose of safeguarding individual interests. However, if misused it might negatively affect economic development of a country (Jong-A-Pin & Haan, 2007). Different nations experience different political regimes; some are under dictatorship while others are under democratic governance. Other common political systems that the modern world experience are monarchies and strict meritocracy. All political regimes are believed to have economic effects to the nation. For example, dictatorship regime might encourage monopoly hence discouraging competition. As a result, the political economy question for the past years has received much attention from scholars and policy entrepreneurs (Banerjee & Somanathan, 2007). Political regimes do matter for the growth of the nation’s economy. The present essay paper shall compare the type of political regime in India and China and identify which regime is favorable to do business in, and give reasons why.
Comparison of the Political Regime type in China and India
The section will present a comparison of political regimes of China and India. The two nations are among the most populous in the world in terms of economic growth. For the last decades, the two countries have experienced rapid growth in terms of economic development. Both countries have varying political views regarding what is best for the citizens. Also, the two nations have experienced rapid development of economic reform, as well as, social modernization (Bardhan, 2006). Both the nations have in the recent past experienced extensive political reforms. Both nations have a long history with china being stable and centrally run nation while India has been a reverse of this. Moreover, both nations have experienced remarkable growth for the last decade all attributed to the current political regimes. Nevertheless, India has been unable to completely perform well in terms of poverty alleviation and economic growth as compared with China.
Both nations are under varying political regime and, as a result, they are in a position to substantially control their economy (Desai, 2003). For the past years, India has continued being open participatory and multiparty democracy while China has remained being authoritarian i.e. one party regime. In addition, both nations are repressive as governed by their constitution, given that the economy is planned, as well as, tightly controlled. However, China does engage in opening of its market while India to some extent is reluctant to do so. This explains the current discrepancy in terms of fiscal growth. Both nations have set some sort of tariff barriers with China decreasing the trade tariffs unlike India. Nevertheless, this has changed as India has started to decrease the trade tariffs than China (Klein, 2004). As a result, this has contributed to the affordability of imports which would help industrial development in China. The current political regime in China is of the opinion that economic development in minority regions will result to social stability. On the other hand, the Indian regime believes that freedom of speech will guarantee social stability.
The republic of China operates under one party known as “Communist Party of China’ that has the ideology of socialism with Chinese distinctiveness which might be seen as capitalism (Yongnian, 2009). However, the new political regime of China “market socialism with Chinese distinctiveness” is an exceptional system and not limited to a single ideology. The regime has varying features such as, free markets and socialism. Though, there are other small parties in China they normally operates under Chinese Communist Party hence, posses no power. In china, no independent party is tolerated, therefore, making the nation a one-party country. On the hand, India has numerous political parties with the current ruling party being National Democratic Alliance hence; there is tolerance of other parties. .
There is a difference in the process of policy change between India and China. This is mainly caused by the fact that China has a single party i.e. China Communist Party while India has several parties which represents different interests. Therefore, in India there has not been a party that has dominated and, as a result, the process of policy-making has been compromised by diverse forces. Further, India has a federal system that gives considerable powers to state governments. Again, this makes the policy making process more complex and diffuse as opposed in China. This gives these states a chance to oppose the central government as opposed to China since it has only one dominant party (Pan, 2003).
China political regime is believed to be authoritarian and, on the other hand, India is believed to be a stable democracy. This is also attributed to the number of political parties each country have. Despite China’s political regime being highly authoritarian it has been able to successfully enhance economic openness for the last three decades (Basu, 2009). The authoritarian nature of China’s political regime facilitates successful implementation of policies quickly. On the other hand, India’s policies implementation is constrained due to compromise from different stakeholders i.e. different political parties that are in existence. As a result, policies under India’s political regime tend to be implemented slowly as compared to China. India is constitutionally republic subscribing to the ideologies of a freethinking democratic country that is exemplified by free and fair elections, as well as, aggressive political process.
The China’s political regime has been able to curb insecurity making the nation among the safest in the world. Therefore, the risk of terrorism in China is small. However, the current political regime of India has not been able to curb terrorism making the nation unsafe for investors. In addition, the political regime of India is considered to be more inclusive than that of China since it is democratic.
Furthermore, China and India have dissimilar political structures and economic growth levels. Due to the fact that China is a single party nation it is capable of starting or stopping the lower government. On the other hand, in India is quite different as the central government has to consider all parties (Chatterjee, 2008). Also, India follows the federal system where power is assured to all states and cannot be eliminated by the central government. In comparison, India is led by a number of parties that are rival in terms of power distribution while China regime is led by a single party. China is known to be Marxist nation while India is considered to be a liberal nation.
Reasons for doing Business in China
The fact that China is under one political party there is a possibility of formulation of long term plans for development of the country (Yongnian, 2009). Further, this guarantees stabilization of various policies since they are not altered by parties with varying ideologies and positions. In other words, business rules do not change dramatically as there are no new parties coming into power. As a result, I would prefer to do business here in the sense that policies such as, tax among others are stable for long periods. The business is, therefore, not likely to be affected by changes of crucial policies in China. In addition, the regime is efficient and promotes opportunities for emerging business. Again, the current political regime of China is effective in terms of containing corruption as compared with India (Srinivasan, 2004). This would be favorable for the business as it will enjoy equal opportunities as others.
In addition, the current regime is responsible in that the appointed officials are expected to be accountable. As a result, their competence is enhanced especially when handling policies concerning business. Single political party tends to represent the entire population, unlike a multiparty system where different parties represents varying interests groups (Cavalli, 2002). Consequently, in China the economic policies are made without bias to favor any interest groups. This would be crucial for the business in that it will be treated equally like others. The stability of the China’s political regime also makes the nation a better place to undertake business. This further ensures that there is no any sort of discrimination against some business hence attracting more business in the economy. This means that it is reasonable for a new business to venture into this particular market.
China’s policies tend to encourage speedy economic growth, as well as, maintaining social stability. As result, China would be the perfect place to do business since the policies made encourages economic growth which is good for each business. This reflects that the government of China is doing enough in terms of presenting quality policies to support high level of industrialization, as well as, economic growth (Zhao, 2002). In other words, the government of China is moving towards the right direction in opening door for new investments.
Moreover, China is among the safest nations for one to do business. This is attributed to the fact that the current regime is capable of protecting its sovereignty. A safe environment is one of the important factors that ensure that the business thrives; hence China is the best when compared with India. The China’s political regime tends to create favorable business environment through fair taxation system. Also, the business will perform well in China due to power economic growth experienced in the nation.
In conclusion, political regimes are meant to protect the interest of each nation. This might have adverse impact on the economic growth of the nation if not handled well. From the essay it is evident that the two nations have varying political structure with China being a single party state and India being a multiparty state. Both nations have in the recent past experienced dramatic economic growth. Both countries are governed by their constitution and their economy is planned, as well as, tightly controlled by the government. No party has been able to dominate in India as opposed to China where a single party has been able to dominate. Some of the reasons why China is best for a business venture are as follows; being a single state party policies made are likely to last for long hence, a business is not likely to experience many changes. Also, the single party ensures that there elimination of biasness as it represents interests for all people. Security is also maintained making China business environment among the best in the world.
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