india vs china (2)

8/6/2019 India vs China (2)

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India vs china


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ENCODER GROUP

KAMLESH BACHHAV 03

HETAL CHAVDA 07

ASHOK PANDEY 28

JYOTIKA JAIN

GUIDED BY :- PROF. LALIT TANK


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O verview

IntroductionEm erging m arkets co mp ared viz:

Power sector

E ducation syste mIndia&china-strengthsO il and gas sectorPort and shi pp inginfrastructureService industryR ole of F D I

Trade patterns Trade policies

conclusion


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Introduction

India and china emerging global players:

High economic growth ratesRapid raising share in worldLarge inflows of FDIEngines of demand growth in commoditiesPositive demographics


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The first is look at china with infrastructure where is China and

where is India

China and India together account for about 37.5% of worldpopulation and 6.4% of the value of world output and income atcurrent prices and exchange rates

If China opened up in 1978, India did so in 1991 i.e 14 yrs afterChina therefore any comparison of India of today should be made

with china as it was more than a decade ago as emerging globalpowers now

Since the two countries have similar labor endowments anddevelopment lags due to government controls and protected natureof their economies , they can be expressed to follow similar growth

paths on opening up


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PRE -COND ITI ON S FOR A PE A CE FUL

GLOB A L POWER TR A N SITI ON

Much of chinas dazzling infrastructure was been

built in the late 1990s and India is gearing upto therepeat that performance in the latter part of thisdecade.

Foreign inflows into china jumped substantially inthe early 1990s and those into India have jumpedin the mid -2000s.


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GDP real growth rate:

CHINA INDIA8.7% (2009) country co mp arison to the world: 7.4% (2009)9.8% (2008) 6.6% (2008)13% (2007) 9% (2007)

GDP -Per ca pita ( PPP -P urchasing power parity):

$6,838 (2009)country co mp arison to the world: $3,275 (2009)$6,000 (2008) $2,800 (2008)$5,500 (2007) $2,700 (2007)

GDP co mp osition by sector:agriculture: 10.6% 17.2%industry: 49.2% 29.1%services: 40.2% 53.7%

China India E cono m ic Fact Sheet


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Comp aring India and Chinas Growth Stories

Indicators India ChinaPolitical System Multi-party Democracy One-party authoritarian

rule

Speed of Growth Economic reformsstarted in 1991.

Average 6% growthrate in past twodecades.

Economic reformsstarted in 1978.

Average 9.5% growthrate in past twodecades.

Areas of SpecializationRising power insoftware, design,services, and precisionindustry.

Dominant in massmanufacturing,electronics and heavy industrial plants


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Comp aring India and Chinas Growth Stories

Indicators India ChinaGini index(standard measureof inequality)

36.847.0 (up 10 pointsfrom 15 yrs ago)

Foreign DirectInvestment

6.8% (up from 0.3%in 2004)

17.8%

Future Areas of growth

R&D, bio-technology,high-value IT enabled

services (legal, medical,engineering architecture),manufacturing, agro-based industry

IT business, servicesand continued

manufacturing


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GDP Growth 2000 to 2050

-8-Source: Goldmann Sachs: The Path to 2050

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

[2003 bn US Dollars]

GermanyBrazilJapanRussia


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SEC T OR - WISE BRE AK-UP OF ECONOM IE S

CH IN A & I ND IA

0%

50%

100%

SectorwiseBreak up of China GDP

SectorwiseBreak up of China

Population

SectorwiseBreak up of India GDP

SectorwiseBreak up of India

Population

ServicesIndustryAgriculture

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Indias 54% of po pulation is engaged in Agriculture but only accounts for 17% of GDP


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GRO SS DOME STI C SAVI N GSCH IN A & I ND IA

0

10

20

30

40

50

60

70

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

China India

-14-

China & India: Gross Domestic Saving as a % of GDP


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IN FR AST RUC T URE * IN V E STMEN TS

-15-

* Transport, Communication & Power

Source: China Statistical Yearbook, RBI, Morgan Stanley Research


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India lags behind china in infrastructure.China has a weak banking and legal system.

The Chinese culture is more homogeneous and Indian culture is

great diversifiedIndia has the advantage of the English language which has madeit easier to participate in the global economy.

What holds India back are bureaucratic red tape, corruption andits inability to build infrastructure fast enough.

According to Peter Drucker, India has managed rural to urbantransition in a relatively smooth and peaceful manner, whichChina is still struggling to do.


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E ducation syste m

Growth rate-India@17%, China@13%

Where as in India it is 50 to 60 %

Adult literacy India -61%China-91%

Expenditure on education India- 10.7%China -12.8%

But coming to quality educationIndia is far more better than china


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Very high economic growth, large internalmarket

Very high savings and investment rate

Becoming worlds manufacturing base Very large supply of excess labor will continueto give it low wage advantageBut moving rapidly up value chain from laborintensive to more technology intensive exportsEfficient export trade logisticsStrong investments in education and training Government with strong sense of nationalpurpose

cjd


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OIL AND GAS


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Port and shi pp ing

Indian exports $13.94 billion in August 2009 where as China is $ 95.41 billion.

Indian imports amounted to $130.36 billion where as china is 424.59 billion

Installed port capacity in China is 5.6 btpa vis--vis Indias capacity of ~0.75btpa

Container terminal capacity in China is ~100 m teus vis--vis Indias capacity of 8.6 m teus.

The largest container vessel calling at Chinese Port is more than 13,000 teus where as at Indian container terminal (JNPT) is 6,000 teus.

The draft at Shanghai is 19+ m where as at JNPT it is 11.5m and at Mundra itis 17.5 m.

The berth length at Shanghai is 13,800 m and that at hong kong is 4,426 m

whereas total container berth len th at JNPT is 2000 m and at 1280 m at Mundra


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R ates of invest m ent

The investment rate in China (investment as a shareof GDP) has fluctuated between 35 and 44 per centover the past 25 years, compared to 20 to 26 percent in India.

Infrastructure investment from the early 1990s hasaveraged 19 per cent of GDP in China, comparedto 2 per cent in India.


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R ole of F D I in China

China can afford to have such a high investment rate because ithas attracted so much foreign direct investment (FDI).

But FDI has accounted for only 3-5 per cent of GDP in Chinasince 1990, and at its peak was 8 per cent. In the period after2000, FDI was only 6 per cent of domestic investment.

Where as India is only 4%.

Recent inflows of capital have not added to the domesticinvestment rate at all, macro economically speaking, but have ledto the further accumulation of international reserves, now increasing by more than $120 billion per year.


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Trade policies

China: export employment was net addition todomestic employment, since until 2002 China had

undertaken much less trade liberalization than mostother developing countries.

India: increases in export employment wereoutweighed by employment losses especially insmall enterprises because of import competition.


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Poverty reduction

China: Officially 4 per cent of the population now livesunder the poverty line, unofficially around 12 per cent.(Reflects earlier asset redistribution and basic need provision

in China under communism, plus larger mass market androle of agricultural prices.)

India: poverty ratio much higher and persistent, between 26per cent and 34 per cent depending upon how one interpretsthe NSS data.


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conclusion

The two countries can develo p sim ilar position on internationalnegotiations to counter pressurefrom lobbies that would m akedevelo ping countries bear m uchof the cost of m oderating theclim ate change created by currentdevelo p nations. At the sa m e ti m e , prom otingtechnology and renewable energbased solutions will m itigate the

need for intense futureco mp etition over energy.NO T CH IN A V ER SUS IND IA.NO T CH IN A V ER SUS IND IA.

SO IT COULD BE CH IN A A ND SO IT COULD BE CH IN A A ND IND IA I N T HE FU T URE ,IND IA I N T HE FU T URE ,


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Thank you Thank you

india vs china (2)

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