The Limits of Asia’s Two Major Growth Models

Project Syndicate  |  Hinh T. Dinh, Karim El Aynaoui

China and India have pursued deliberate, distinct industrial policies to drive economic growth, but their specialized development models remain largely inaccessible to other developing nations seeking reliable economic paths in a fragmented global landscape. China’s manufacturing-led growth and India’s service-centric expansion relied on unique historical scales, state capacities, and market conditions that cannot be easily replicated abroad.

These structural variations mean that external nations attempting to copy either route face significant coordination failures and resource constraints. Consequently, policymakers in emerging economies cannot treat Asian growth trajectories as universal blueprints for national development. Instead, foreign governments must analyze the specific institutional bottlenecks and domestic market limitations highlighted by these two giants to formulate localized economic strategies. Ultimately, navigating modern trade fragmentation will require developing states to engineer homegrown industrial solutions tailored strictly to their own economic realities rather than relying on external growth templates.

Comment

The divergent growth strategies of Beijing and New Delhi demonstrate how structural capital allocation shapes defense industrial capacity. China leveraged its state-supported manufacturing base under Made in China 2025 to achieve dual-use industrial scale, whereas India’s service-centric growth limited heavy manufacturing development. New Delhi’s implementation of the Production Linked Incentive scheme marks an attempt to rectify this asymmetry by subsidising domestic electronic and defense component supply chains. These trajectories reveal that sovereign defense production depends directly on the preexisting depth of a nation's broader industrial ecosystem.

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