WE OFFER IT TO THEE

ASIAN RENAISSANCE

RISE OF CHINA_ SUMANTH

INDIA RISING_ ASHISH

PROBLEMS OF India AND CHINA_ MARUTHI

IMPLICATION OF THE RENAISSANCE_ YOUGAL

RISE OF CHINA AS A GLOBAL POWER

CHINESE ECONOMIC REVIEW

CHINESE ACHEIVEMENTS

The Greatest economic success stories in Modern times.

China’s real GDP grew at an average annual rate of nearly 10% for three decades.

679 million people in China were raised out of extreme poverty.

The world’s largest manufacturer, merchandise exporter and importer, and holder of foreign exchange reserves.

FACTORS FOR RISE OF CHINA

High productivity in Manufacturing

Export led Growth

Infrastructural advancement

Human resources

Govt. initiatives

Foreign Investment

HIGH PRODUCTIVITY IN MANUFACTURING

Manufacturing plays a considerably more important role.

Reallocation of resources to more productive uses.

Focused on low-cost, labor-intensive manufactures.

Rise of market-oriented and more efficient non-state enterprises.

Large-scale capital investment.

Measures to boost exports and to promote and protect certain industries.

EXPORT LED GROWTH

It is the largest trading partner for 130 countries.

Active policy of boosting trade and investment ties.

Abundance of low-cost labor has made it internationally competitive.

Undervalued currency and subsidies given to domestic producers.

Assembly into finished products.

Seeks to capture Advanced technology exports market.

INFRASTRUCTURAL ADVANCEMENT

Electricity production now doubles nearly every 10 years.

Road network has more than tripled in length in the last two decades.

Expansion of high speed railway and city wide metros.

Establishment and expansion of coastal ports.

Government stimulus investment programme.

HUMAN RESOURCES

• Human resources growing in scale.

• Remarkable improvement of education.

• Optimized employment structure.

• Good progress in talent development.

• Efforts have been mobilized to build up the public health system.

• Key player in transition to services led and consumption driven economy.

GOVT. INITIATIVES

SOEs continue to dominate such as petroleum and mining, telecommunications, utilities, transportation.

Elevated markets to decisive role.

Liberalization of foreign investment.

Establishment of free trade zones.(SEZs)

Response to 2008 crisis by sharply increasing spending on fixed investment.

China’s leaders initiated a new “go global” strategy.

SEZs MAP CHINA

FOREIGN INVESTMENT

China is the world’s largest destination for FDI inflows.

China’s trade and investment reforms and incentives.

Major source of China’s productivity gains and rapid economic and trade growth.

FIEs in China dominate China’s high technology exports.

The actual level of FDI in China may be overstated.

CONCLUSION

Chinese growth fuelled by exploiting competitive advantage in areas of Manufacturing, exports.

Infrastructure is impressive but not up to full potential.

Rapid growth rates no longer possible.

Need for transition to services led and consumption driven economy.

Need for more transparency in areas of Banking and transparency.

REFERENCES

China’s Economic Rise: History, Trends, Challenges, and Implications for the United States by Wayne M. Morrison.

www.beijingreview.com.cn

www.bloomberg.com

www.globalresearch.org

www.ft.com

“Report for Selected Countries and Subjects”. IMF

"Export Partners of People Republic of China". CIA World Factbook.

"Labor force, total". World Bank.

INDIA RISING

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RECENT GROWTH STORY

INDIA RISING

Even though there has been a phenomenal rise in India as a global economic power, its growth

story is not new. In fact it started way back in1991.

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GDP Growth Rate

India's GDP growth during January–March period of 2015 was at 7.5% compared to China's 7%, making it the fastest growing economy.

India's services sector grew by 10.1%, manufacturing sector by 7.1% & agriculture by 0.2%.

30% to 40% of GDP growth is due to the rising productivity.

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Source: CSO.

Agriculture

India holds the second position worldwide in terms of farm output.

It generates works for more than 60% of the total workforce.

India exports many agro products like Rice, milk, tea and many others cash crops.

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Industrial Output India is 10th in the world in factory output.

Manufacturing sector in addition to mining, quarrying, electricity and gas together account for 27.6% of the GDP.

India’s major exports are petro products, transport parts, electronics etc.

It employs 17% of the total workforce.

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Services India is a service sector led economy

IT and Pharma are the biggest contributors

This is because of the reforms that favoured growth faster in this sector than any other sector.

Quality of population: presence of large number of people educated in engineering.

India is 2nd in Services Output.

ITES – BPO Sector has become a big source of employment for number of youth.

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LATEST UPDATE , JANUARY 2016 :

India’s technology and BPM sector (including hardware) is estimated to have generated US$ 146 billion in revenue during FY15 compared to US$ 118 billion in FY14, implying a growth rate of 23.72 per cent.

TCS is the market leader, accounting for about 10.1 per cent of India’s total IT & ITeS sector revenue.

[Source: Nasscom ,TechSci Research]

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REASONS FOR INDIA’S GROWTH

• Domestic Demand

• New Government Reforms

• Lower Crude oil Prices

• Lower External Vulnerabilities

• Better among EMs

DIRECT

CAUSES

• Investment in Infrastructure

• Human Resource

• Increase in Capital Inflows

• India’s growing trade

• Role of govt.

INDIRECT

CAUSES

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Investment in Infrastructure

The Indian power sector

The Indian construction and real estate industry

Transport industry.

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HUMAN RESOURCE

Working population will increase from 60.1% to 68.4% (age 15-64) from 2001-2026.

Literacy rate at more than 75%

Better Female Literacy rate

Regional Imbalances narrowing down

Population Growth Rate is slowing.

Poverty is Declining.

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Banking and Finance

Role of banks in India

India’s saving rate

India’s investment rate

Increase in no. of banks and its branches

The Indian banks are also said to have clean, transparent and strong balance sheets comparing to their Asian counterparts.

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FOREIGN CAPITAL INFLOWS 30

GROWTH OF TRADING ACTIVITY

India a trade deficit country

Increase in volume

Increased no. of trading partners

Increase in no. of commodities

Top exports: petro products, vehicles, machines, pharma etc

Top imports: crude oil, gold, electronics etc

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Export and Import Graph

0.0

100000.0

200000.0

300000.0

400000.0

500000.0

600000.0

Exports Imports

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GOVERNMENT INITIATIVES

Lowering tax rates for homegrown industries

Subsidies

SEZs

Investment in social goods

Initiatives by the new govt. like MAKE IN INDIA, skill India, MUDRA.

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CONCLUSION

India, today, has a vibrant economy and is recognized as a leader among the emergent countries with a huge potential for growth.

India is now initiating the second generation reforms intended for a faster integration of the Indian economy with the world economy.

In the present decade India has witnessed unprecedented levels of economic expansion and also seen healthy growth of trade.

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REFERENCES

India and Global Economy.

India soars High – KPMG in India . February 2016.

What are the problems faced by

INDIA and CHINA IN

ECONOMIC GROWTH

1

2PROBLEMS FACING INDIAN ECONOMY…..?

1. INFLATION 7-8%

2. Poor educational standards

3. Poor infrastructure

4. Inefficient agriculture

3Conti…..

5. High levels of debt

6. Large budget deficit

7. Rigid labour law

8. Inequality has risenrather decreased

4Problems of Chinese economic growth

1. pollution

2. Property boom

3. Growing income inequality

4. Inefficient banking sector

5Conti…..

5. Undervaluation of Yuan

6. Overheating economy

7. Huge balance of payments surplus

IMPLICATIONS OF THE RISE OF CHINA

AND INDIA

COMPARING INDIA AND CHINA

Form of Govt.

Purchasing power parity

Growth path

Infrastructural advancement

Human resource

Drivers of growth

IMPLICATIONS FOR THE FUTURE

Increase in per capita income dramatically

Well equipped armed forces + economic muscle

This will lead to a multipolar world

Environmental hazards

Energy demands

ECONOMIC IMPACTS ON THE GIANTS

Huge increase in GDP

Increasing standard of living

“knowledge intensive” trade

Increase in trade in both volume and composition

Trade to GDP ratio

LEAD ERODED

A. Production lead

B. Technological lead

C. Relative income lead

Domination in international affairs eroded

Eg : Britain in 20th century

SCARCE RESOURCES

Increase in demand for natural resources

This will lead to increases in prices

Loss of real income for advanced countries

GLOBAL KNOWLEDGE POOL

More resources devoted to R&D

Technology becomes cheaper in China and India

Rest of the world will gain from import of these technologies

COMPARATIVE ADVANTAGE

Rise in productivity

Productivity higher in “ knowledge intensive” goods and services

Educated v/s Uneducated workers

Increase in prices of labour intensive products

How it affects rich countries and LDCs ?

The “Flying Geese Theory” (Ozawa 2005)

Shift in TERMS OF TRADE a long term phenomenon

ABSOLUTE ADVANTAGE

Productivity and wage lag. Eg china

Abundance in labour supply and its impact

Investment gets choked in advanced countries

“Round tripping”

CONCLUSION

Expensive fuel, resources and labour intensive goods

More investment on research and development

Expanding market

Investment shifts and its effects

Structural changes

REFERENCE

“Renaissance of China and India” _ Robert Rowthorn, Cambridge university

WORLD IN 2050

INDIA AND THE WORLD

CRUX OF ASIA _ Ashley j. Tellis and Sean Mirski