Content area
Full text
The recent and growing technology trade among India, China and the rest of the world is punctuated with distinctive trajectories and dynamics. Propelled by the simultaneous phenomena of impressive economic growth and increasing technological capabilities, the two countries under review have made a paradigmatic shift from being predominantly technology-importing countries in the 1980s to technology-exporting countries at the beginning of the 21st century. The consequent outcome of this process is the changing composition of technology exports wherein the share of technology-intensive products is increasing in their overall export baskets, which is a clear indication of the two countries' growing technological prowess. A key element in this growth is that the technology component in the overall bilateral trade between India and China is increasing both in volume and diversification. A considerable part of China's exports to India consists of technology-intensive products, but primary goods dominate Indian exports to China, revealing China's edge over India. This is likely to change as India strengthens its comparative advantage in software and begins to catch up with China in sectors such as manufacturing. These developments have several implications not only for their economies, but also for those in both developed and developing countries.
Technology trade, a critical component of trade of late, is recognized as a key indicator of the development of economies that are increasingly knowledgedriven and information-based. Acknowledging this, India and China have been orienting their trade architectures to factor technology into their global and bilateral trade relations, and they are benefiting from the process. India and China have emerged as the twenty-first and largest merchandise exporters with trade-to-GDP ratios of 46.2 and 58.6 respectively during 2007-2009. A trend worth noting is the growing size of technology-intensive exports in their export baskets, a potent sign of the maturing of their technological capabilities.' Another trend is that technology trade between India and China is beginning to acquire a competitive dimension as both countries witness a steady rise in their technological capabilities.
As these trends evolve, the future of technology trade among India, China and the rest of the world will be much more complex and variegated. One of the implications of the growing Indian and Chinese technology trade is that hitherto established technology giants such as the United...