China and India — The New Powerhouses of the Semi-Periphery?

Abstract

This chapter argues that if the South American/East Asian or state socialist model captured the post-war ‘model’ of the semi-periphery, then the post-Cold War states of China and India embody a new ‘globalised’ form. Rather than opting for a version of neo-mercantilism or protectionism, India and China have both based their economic strategies on globalising their economies by attracting multinational investment and Foreign Direct Investment (FDI). As a result both states, whilst different in terms of their overall economic output have maintained high economic growth through the emphasis on manufacturing and on facilitating cheap labour for MNCs. As a result both countries have become increasingly competitive not just in the global market, but also in organisations such as the WTO, where they have both become important regional players in terms of their influence. However, these moves have also served to merely consolidate their role as being dependent upon western investment and companies and both China and India remain severely underdeveloped in terms of their internal institutional development and in terms of living standards and marked inequality.