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China’s and India’s rapid rise in the global arena has not only captured the attention of the world but has also set into motion a rethinking of the very paradigm of economic development. In fact, the new developments in these two countries may be enough to revise the conventional development economics textbook. Chinese premier Wen Jiabao’s visit to India in April 2005 has brought these two countries closer together than ever before in their long and ancient history. China and India signed a number of agreements centered on economic cooperation and partnership, the implementation of which could change the world’s geopolitical and economic landscape in the future.

Today, China and India together account for 40 percent of the world’s population. Both have implemented a series of economic reforms in the past two and half decades: China initiated this process at the end of the 1970s, while India began in the early 1990s. These reforms have led to rapid economic growth, with a growth rate of 8–9 percent per annum in China and 6–7 percent per annum in India. Despite similar trends in the reforms, the two countries have taken different reform paths; China started off with reforms in the agriculture sector and in rural areas, while India started by liberalizing and reforming the manufacturing sector. These differences have led to different growth rates and, more importantly, different rates of poverty reduction. They also have fundamentally different implications for growth and poverty reduction in the future.

What can we learn from the process of economic reform in these two countries? Does the sequencing of reform and an agriculture-led package matter? What could other developing countries and countries in economic transition learn from the experiences of India and China? What could these two countries learn from their own as well as each other’s experiences? How can the two largest developing countries cooperate in their agricultural and economic development and work together at multilateral negotiations, such as those conducted through the WTO, to address the concerns of developing countries?

A number of studies looking into key aspects of reform and their relationship to outcomes, presented at two international workshops held in New Delhi and Beijing, try to offer some answers to these questions. These papers are currently being prepared by IFPRI for publication, and this discussion paper is a synopsis presented as a forerunner to the book.

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