| Abstract: | This article explores the global positions of China and India in merchandise trade. It first compares the integration models of China and India and, thereafter, examines the core factors that drive their trading relationships. With respect to their global trading partners, there are considerable differences in the influence of economic drivers of trade for China and India. Combined larger markets, similar consumer preferences, similar factor endowments and linguistic links enhance global exports from China. Alternatively, smaller market size, discrepancy in consumer demands, dissimilar factor endowments and combined stocks of foreign direct investments drive India’s global trade. The findings suggest that differences in the structure and demand of China vis-a-vis India dictate the divergence in the profile of their trade determinants. Such divergence in trade drivers, however, dissipates when taking into account Chinese and Indian partnerships on a regional basis – with East Asia, Middle East and North Africa (MENA), Latin America, European Union (EU), and Africa. |
