Friday, 18 February 2011

The gaps appear

China and India top yet another global league table, this time for growth in labour productivity. The findings by the New York-based think tank, The Conference Board, show that China and India are the most dynamic economies with 8.7% and 5.4% growth in labour productivity in 2010.

However, when one looks at total factor productivity - taking account of all factors of production - the two diverge. China has shown a rising pattern since 1995, whereas India started to slow in 2005. "China has shown strong output growth since 2005, while India's transition to a higher growth path has been more resource-consuming and more constrained by a continuing need for reforms," the report says, adding that a lot of potential for efficiency gains still needs to be realised.

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