An Analysis of the Political-Economic Environments of China and India

Daniel Pilipczyk


This paper critically analyses two major Asian markets, China and India, in the context of entrepreneurial investment. A generic approach is taken for the ‘general’ entrepreneur looking to enter either of the two markets. In making the conclusion, this paper assesses such aspects of the external environment as the dominant political system, legal coherence, culture, changing demographic trends, economic prominence and technological penetration. It is concluded that China is an entrepreneurial preference due to the political stability of a one party state, superior per capita GDP and contract adherence within civil law. The paper recognises the challenges of conducting business in China, such as the unique cultural elements and the concept of guanxi. India’s macro environment does, however, provide promise, such as the unique opportunity with m-commerce and the rapidly growing middle class.


politics; economics; entrepreneurship; guanxi; India; China

Full Text:



Agarwal, A. K. (2015). Difficulty of doing business in India. IIMA Institutional Repository.

Boro, K. (2015). Prospects and challenges of technological innovation in banking industry of North East India. Journal of Internet Banking & Commerce, 20(3), 1 – 6.

CIA. 2016. India. The World Factbook. Retrieved March 12, 2016 from

Cull, R., Li, W., Sun, B., Lixin, C. X. (2015). Government connections and financial constraints: evidence from a large representative sample of Chinese firms. U.S. Federal Reserve Board’s International Finance Discussion Papers, 1129, 1 – 65.

DFAT. (2015). China Fact Sheet. Department of Foreign Affairs and Trade. Australian Government. Retrieved March 11, 2016 from

Feng, X., Johansson, A. C., and Zhang, T. (2015). Mixing business with politics: political participation by entrepreneurs in China. Journal of Banking and Finance, 59, 220 – 235.

Haub, C., and Sharma, O. P. (2015). India approaches replacement fertility. Population Bulletin 70(1): 17.

Mahr, K., and Miller, Z. (2014). The new face of India. Time 183(21), 18 – 22.

Mitra, S. K. (2012). Politics in India: Structure, Process and Policy. New York: Routledge.

Pei, M. (2015). China’s slowing economy: the worst has yet to come. Fortune. Retrieved March 11, 2016 from

Modi, N. (2015). Digital India: opportunities for us, and for you. Vital Speeches of the Day 81(11), 353 – 355.

World Bank. (2016). Ease of doing business index (1 = most business-friendly regulations). Retrieved March 12, 2016 from

William, J. (2014). Politics in China: An Introduction 2nd Edition. USA: Oxford University Press.

Xin, K., and Pearce, J. L. (1996). Guanxi: connections as substitutes for formal institutional support. Academy of Management Support 39(6), 1641 – 1658.

Yanhua, D. (2013). Capitalism and modernization in China. Chinese Studies in History, 47(2): 40 – 51.

Zhang, D. (2015). Politics, finance and economic fluctuations in China. Emerging Markets Finance & Trade, 51(6): 1071 – 73.


  • There are currently no refbacks.

Copyright (c) 2017 Daniel Pilipczyk

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Image result for newcastle university logo

Newcastle Business School Student Journal

ISSN: 2207-3868 (Online)

ISSN: 2207-385X (Print)