Global Industrial Geography

China’s meteoric climb since the mid 1990s, as an exporter of manufactures, and India’s ability, over the past six years to claim a sizable fraction of the global market for tradable IT enabled services1 have contributed to the changing pattern and the volume of global trade. Some of the implications of these are modeled and described in chapter 3. In 2004, China’s share of the world’s merchandise exports was close to 7 percent, that of India was a little less than 1 percent. The two countries ’ shares of global imports were 6.1 percent and 1 percent respectively. China’s manufacturing sector accounts for over 41 percent of GDP and manufactured goods constituted 93 percent of exports in 2005 or almost one quarter of the gross value of industrial output. Machinery and transport equipment accounted for 45.2 percent of total exports. These statistics reflect the large gains in manufacturing capability facilitated by heavy investment in plant and equipment embodying the latest technologies and the codification of knowledge on production processes. Relative to China, India’s formal manufacturing sector accounts for a far smaller share of GDP—less than 16 percent. Investment in new industrial capacity and industrial growth since 1990 has been slower and exports of manufactures are a fraction of China’s in absolute terms an