Different Effects of Globalisation for Workers and the Poor in China and India, Comparing Countries, Cities and Its Clusters

The effects of globalisation on income, the income distribution and other social indicators in China and India will be analysed in this paper. A comparison between the two countries is made on a large number of variables to determine how globalisation influences wages and labour conditions. The question asked is what explains the differences in competitiveness of information and communication technology (ICT) clusters in a Chinese and an Indian city. Labour cost and conditions turn out to be one of the factors influencing the competitiveness of the two countries and clusters. It is not so much the price of labour that explains the difference in performance, but rather the productiveness and the labour legislation. A number of other factors underlying the rapid economic growth of China are analysed to conclude that that country, more than India, has benefited from globalisation. The resulting income distribution is more unequal in China, however, there is also more employment created, poverty alleviated and wages are higher and have increased recently in China.

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