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Changing the Industrial Geography in Asia: The Impact of China and India

Changing the Industrial Geography in Asia: The Impact of China and India

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As the two Asian giants become the industrial equals of the United States, Germany, and Japan, the ramifications will affect trade and growth worldwide, the future of development in China and India, and industrialization throughout Asia. Changing the Industrial Geography in Asia: The Impact of China and India examines these developments, focusing specifically on China and India. Its analysis and conclusions will be of particular interest to policy makers and academics, as well as anyone with an interest in the impacts of China and India on Asia's industrial activities.
As the two Asian giants become the industrial equals of the United States, Germany, and Japan, the ramifications will affect trade and growth worldwide, the future of development in China and India, and industrialization throughout Asia. Changing the Industrial Geography in Asia: The Impact of China and India examines these developments, focusing specifically on China and India. Its analysis and conclusions will be of particular interest to policy makers and academics, as well as anyone with an interest in the impacts of China and India on Asia's industrial activities.

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Published by: WorldBankPublications on Jan 19, 2011
Copyright:Attribution

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06/05/2015

Source:Authors’ calculations using UN Comtrade data.

100

90

80

70

60

50

40

30

20

10

0

1980

1985

1990

1995

2000

2007

other resource-based
engineering
other low-technology
electronic & electrical

primary products
automotive
other high-technology

textile, garment and footwear

agro-based
process

percent

total.24

Moreover, many of India’s cities have been slow to reform a business
environment that subjects industry to numerous obstructive rules and statutes.
The country’s labor laws and assertive unions discourage hiring because layoffs
are problematic and can be expensive. Land use and the real estate market in
general are highly inefficient. Acquiring a large block of land composed of con-
tiguous parcels for industry or infrastructure is a major challenge. Even a single
landowner can hold a major deal hostage (“India: Land Acquisition” 2009). An
amalgam of laws and ownership disputes are to blame, and the Land Acquisition
Act and the overburdened courts have persistently failed to penetrate the inher-
ited morass of problems that hobble every city. Limited access to land interferes
with the entry of new firms and the growth of existing ones. In short, Indian
cities have not made haste to embrace industrialization, seek agglomeration and
urbanization economies, or actively pursue industrial clusters. The partial
exceptions are cities such as Bangalore and Hyderabad, which have (rather hap-
hazardly) gone about creating IT parks in response to the demands of the busi-
ness community.

Urban industrialization is further hamstrung by India’s notoriously inade-
quate physical infrastructure, a legacy of insufficient investment, and poor or
nonexistent urban planning. Energy shortages and transport bottlenecks have
severely curtailed industrial development in strategic urban locations. Even the
iconic city of Bangalore has struggled to build the infrastructure it urgently needs,
and its traffic jams remain the stuff of legend.25

In addition, housing shortages
and the ramshackle water and sanitation facilities are a brake on urban develop-
ment. The infrastructure deficit in major Indian cities is vast; reducing this deficit
while accommodating the anticipated growth in urban populations poses an
enormous challenge for city administrators and will absorb a huge volume of
resources. Moreover, the payoff from this investment will depend upon price and

Development Experience of China and India 63

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