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Abstract
India and China have experienced rapid economic growth in recent years. The growth, in part, is attributed to the adoption of liberal trade policies by each country in 1990’s, and the consequent surge in the flows of foreign capital to both these countries. China and India, as the two largest developing countries in the world, have been both enjoying fast economic growth since the 1990s. China seems to be performing better. In 1975, China was at par with India in GDP, yet 33% lower in its GDP per capita ($146 versus $220). But over the years China developed more rapidly than India and surpassed India in terms of GDP per capita in 1984. Now, after 36 years there is a huge difference. China is much ahead from India and has left Japan behind to become the 2nd largest economy in the world. China’s GDP and GDP per capita are almost 3 times than those of India’s.