Openness and competitiveness of manufacturing sector: a comparative study of China and India

FDI may affect the supply of productive resources including (financial capital, equipment and machinery, technology, management and etc.). FDI creates employment where unemployment and underemployment rate is high and thus increases the income of the workers. As a result an additional savings to the host country is created. FDI also has the backward effect. Through buying locally made materials and intermediate goods it creates a good environment for the locally produced goods. For China, the competitiveness of manufacturing sector and Trade Openness are increasing over the year since 1991. However, the Financial Openness of China is showing mixed result, it increased until mid-1990s and it is showing the declining trend. In case of India, the picture is so complex. The Competitiveness of manufacturing sector and Financial Openness are showing the fluctuating path over the year. No as such trend can be found for these two series for India. Only the Trade Openness is showing increasing trend for India.