Michael Sorenson
American Military University
BUSN601: Global Management Perspective
7 November 2015
Abstract
The purpose of this paper is to identify what trade theories support the rise of China and India on the global stage. China and India have two of the largest populations in the world that provide the skilled labor. They also have the development facilities that can produce good for the world market at a much lower cost that is advantageous to global firms. These two countries also share some similarities and differences that have contributed to their growth in the world market. The rise of China and India on the global market has been a gradual one. These two markets have followed similar paths to get to where they stand today. They both produce a great amount of different products for export to various global markets. The theory that can…show more content… During this time, the Chinese government implemented agricultural reforms that created a new form of collective agriculture that allowed revenue to be distributed to households when production surpassed the planned level. In 1985, they began reforms of their industrial sector that allowed for the liberalization of wages and profits for companies. These reforms are what lead to the Chinese opening the door to the global marketplace. This open door policy combined with their massive population of skilled laborers and low cost research and development facilities has contributed to their rise in the global market. This is an example of how the Product Life Cycle theory has been modified to fit today’s modern global market. Instead of global firms conducting their research and development at home, they have been looking to markets like China and India to complete these phases overseas at a much lower cost to the company. (Dimaranan, Ianchovichina, & Martinr,
