china or india - arise roby

ARISE TRAINING & RESEARCH CENTER

IS CHINA

A THREAT TO INDIA

Presented by:

ARISE ROBY


ECONOMY OF INDIA

Market based system

Foreign trade and foreign investment as integral part if Indian economy

Fastest growing economy

World’s second largest labor force


ECONOMY OF CHINA

Centrally planned Economy

Private businesses and capitalism were suppressed

Privatization of Farmland

Promotion of foreign investment

Flourishing small scale entrepreneurs


50 yrs ago, India and China were among the poorest and economically most isolated countries in the

world.

How did China and India emerge as economic giants?


What are India & China famous for today?

Call centers &

computer engineers

Low-priced consumer goods


GDP – real growth rate:

9.8% (2008) country comparison to the world:13% (2007)11.6% (2006)

GDP-Per capita (PPP-Purchasing power parity):

$6,000 (2008)country comparison to the world:$5,500 (2007)$4,900 (2006)note: data are in 2008 US dollars

GDP – composition by sector:agriculture: 10.6%industry: 49.2%services: 40.2% (2008)

China – Economic Fact Sheet


India – Economic Fact SheetGDP- real growth rate: 6.6% (2008) 9% (2007) 9.6% (2006)

GDP – per capita (PPP – Purchasing power parity)$2,800 (2008) $2,700 (2007)$2,500 (2006)note: data are in 2008 US dollars

GDP – Composition by sector:agriculture: 17.2%industry: 29.1%services: 53.7% (2008)

Comparing India and China’s Growth Stories

Indicators India ChinaPolitical System

Multi-party Democracy

One-party authoritarian rule

Speed of Growth

Economic reforms started in 1991. Average 6% growth rate in past two decades.

Economic reforms started in 1978. Average 9.5% growth rate in past two decades.

Areas of Specialization

Rising power in software, design, services, and precision industry.

Dominant in mass manufacturing, electronics and heavy industrial plants


Comparing India and China’s Growth Stories

Indicators India ChinaGini index (standard measure of inequality)

36.8

47.0 (up 10 points from 15

yrs ago)

Foreign Direct Investment

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, services and continued manufacturing


Agriculture Sector



Indian AgricultureIndia is an agricultural country.Growth of service sector is pushing down the contribution of agriculture.Contributing 17.2% of the GDP. Largely depends on monsoon.Provides employment to two-thirds of the total population.15% of export earningsRural women play a vital role, 50% of rural labor force. Yields per hectare of crops in India are very low


ChinaAgriculture accounted for 10.6 % of the GDP33o million- over 45% of labor force still makes living from farming.Farming methods have been improved in China.China produces wheat, rice, potatoes, peanuts, millet, cotton.Only 15 percent of the total land available in China can be cultivated.more than 75 percent of the total cultivated land is used for producing food crops.


INDUSTRIAL SECTOR


India’s Manufacturing SectorManufacturing contributes around 15% of GDP of the country.According to CSO data quartely estimate of GDP for manufacturing stood at 38.1 billion US $.According to the data the cumulative growth in manufacturing index for April-June has been 3.2%.In the manufacturing sector the value of new project announced in 2nd half of 2008-09 stood at 13.2 billion US $.


India’s Manufacturing SectorIndia rank’s among top 12 producers of manufacturing value added products.In Textile it ranks 4th after China, US & Italy.In Electrical machinery & apparatus India ranks 5th. India holds 6th position in basic metals category.7th in Chemicals & chemicals products, 10th in leather & leather products, 12th in machinery & equipment & motor vehicals.


India’s Manufacturing SectorAccording to CSO the industrial output clocked an annual growth rate of 6.8% in July 2009.There are many Companies who wants to make India as their manufacturing hub, they are LG wants to make India its global manufacturing hub for its mobile handsets. Hyundai has make India the manufacturing & exporting hub for its small cars. Their i10 is being manufactured only in India & exported to the world.


India’s Manufacturing SectorLuxury brands like Louis Vuitton are looking at India as a manufacturing base for their products.Skoda Auto plans to make India its regional manufacturing hub. Aircraft manufacturing Airbus is considering India as one of the centres for design & development of its long haul A350 plane.Samsung plans to invest 100 million US $ in its manufacturing plant near Chennai & make it its global hub.


India’s Manufacturing SectorSuzuki too is making India its manufacturing hub for its small cars. According to Investment Commission of India the manufacturing sector is estimated to have 180 billion US $ investment opportunity over next 5 years.Manufacturing sector is the largest employer which employes 25.5 million people of the total workforce.Employment growth rate is 2.78%


China’s Manufacturing SectorChinese manufacturing sector accounts for 43% of Chinese economy.Its economy growth in average of almost 8% every year.Chinese manufacturing sector ranks 4th in the world after US, Japan, & Germany.


China’s Manufacturing SectorChina’s fast growing domestic market worldwide demand for Chinese goods & the cost advantage China offers to manufacturers are fueling the growth of manufacturing sector in China.Purchasing Manager’s Index (PMI) which measures manufacturing activity nationwide.PMI index rose to 54 points in August up from 53.3 in July.


China’s Manufacturing SectorChina has 50% share of worldwide camera market. & 30% of Air conditioners .

25% of Washing Machines & 20% of Refrigerators.

China’s crude steel production rose by 28.25%.

Investment in chemical industry grew by 35.9%.


SERVICE SECTOR


Can be classified into 2 types:Old New

Old Services includes:Petty Trading Domestic Services Catering and Hotel Services


New Services includes:CommunicationsBusiness and legal practicesCulture, research and education.


INDIA v/s ChinaINDIA CHINA

54 per cent of GDP Below 41 per cent of GDP

Since 1978 to 2008 :Average Annual Growth rate is 7.0% Average Annual Growth rate is 10.8%

Employment Opportunities : Low High

Most advanced service sector :Delhi with a GDP share of 77 per cent Beijing with a GDP share of 61 per

centA net exporter of services A net importer of services


GDP shares by sector in China and India


Service Sector Share over Total GDP


Economic Structure and Level of Development


CURRENCIES INDIA CHINA


INDIA AND CHINA IN 2020

According to a recent report from international economic think tanks, India and China soon plans to form a trade coalition in Asia and that is projected to boost 65% of world trade by near 2020.Both the countries India and China are determined to achieve that and create a huge impact on world economic bodies.


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