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India vs China

India vs China

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Published by Dipak Devganiya
India vs China
India vs China

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Published by: Dipak Devganiya on Jul 05, 2013
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India vs. China – the elephant can not fly likethe dragon unless winged
January 12, 2012 by Bishwajit Okram | 12 Comments 
By Bishwajit Okram
Simple facts of the two fastest growing economies of the world say, Chinese dragon is way ahead of Indian elephant in terms of their respective future economic growth. For India, the elephant needs to be winged to fly; she can not afford to wait for the evolution of a flying Elephant, writes Bishwajit Okram, Financial Controller, C&F Group, Ireland.
China will take over USA in 2018 as the world’s largest economy, says an economic
game published in the December 31st edition of the Economist.India is nowhere near the two; interestingly at the least, nowhere near China. Theeconomic barometer is pointing towards a Chinese economic world no later than2020.
The underpinning facts of Chinese economy overwhelm those of India’s.
 India vs. China
China’s annual appetite for steel consumption is 868% more than that of India’s in
2010. Steel is a vital raw material for any development particularly in infrastructureand manufacturing industries.
China’s energy consumption is 598% more than that of India’s. Energy is like b
loodin a human body to business. It shows how hard the economy is working to produce
more gross domestic product (GDP). The result in 2011 says, China’s GDP growth is9.2% where as India’s will be 7% as the prime minister, Dr Manmohan Singh,
reckoned.The economic growth of China is paying off now: they have more than 200 billionaires as compare to 69 of India in 2010. They spend around $192 billion in public health, where as India spent only $65 billion, when the population is now veryclose. Life expectancy is 75 year in China 75 but in India it is around 65 only.
China’s expenditure on health care system is nearly 5 times that of India.
 The gap between India and China is widening in terms of values of most socialindicators of living standards, such as life expectancy, infant mortality rate, meanyears of schooling, the coverage of immunization. 97 percent of Chinese children are
immunized with DPT vaccine, in contrast with India’s meagre figure of 66 percent.
India’s prime minister announced that he was
ashamed of the fact that India still hasmany malnourished children despite being fastest economies of the world.In the field of research and development, India has not made a dent yet. The fact thatin 2011, 12.3% of residential patents registered in the world is from China , a massiveincrease in its registration , suggest that they are truly emerging as a world leader in
innovation. Recently the world has been taken aback with China’s announcement of 
sending astronauts to the moon and sending a well designed space station after USA isabandoning its own.China became competitive faster than any other countries over the last one decade.This is one reason why companies would like to flock in China. According to theworld competitive ranking China is at 31st position as compare to India, which is at50th position.The only area, India has a point to smile, is their domestic consumption which is not
far off from that of China’s. China’s retail sales in 2009 were $360b, which is just
25% more than that of 
 Strong retail sales are a sign of strong domestic market. This can also be interpreted indifferent ways: China has a huge potential for its retail market as the domestic marketis still yet to be exploited.
Another critical negative factor for In
dia’s economy are the inflation and theunemployment rates, which much bigger than China’s. India’s average inflation ratefor 2011 was 9%, where as China’s inflation was less than 6%. The Unemployment
rate of India was nearly 9%, when China had 4% which is considered negligible
according to international standard. India’s credit rating is BBB
- where as that of 
China’s is AA
. This is one reason, why India’s overseas funds withdrew a net $380m
in 2011 compared to record inflows of $29bn in 2010.China still has net foreign assets of $2 trillion or more. The biggest of all is that Chinahas $3 trillion foreign exchange reserve, the highest in the world where as India hasonly $314 billion as at the end of 2011.Recent announcement of the government of India of huge food subsidies is fraughtwith many economic ills. Dr Manmohan Singh, the prime minister of India said in his
new year’s speech that India need pare back subsidies and implement tax reform
 because he was concerned about fiscal stability in future.The Nobel Laureate in Economics, Prof. Amrtya Sen once said that thedistinctions are important for the emerging economies which are trying to decidewhere to emerge. India needs no horse race competition with China in relation to theeconomic growth figure but with the other aspects of social values developments,quality and standard of living developments, democratic values and political liberties.Over the last two decades, in all the social indicators, India has persistently declinedeven in the areas of social development indicators as compare to Bangladesh, SriLanka, Nepal and even Bhutan. Bangladesh has taken over India in nearly all thesocial indicator.Many more Indians have various deprivations, undernourished, unschooled, andmedically uncared much, Prof. Sen pointed in a recent seminar at New Delhi.Financial times quoted Kunal Kumar Kundu, senior economist at Roubini GlobalEconomics in Delhi as saying that at the end of the day, it was all about attractivenessof the market. Remember, even Indian investors were now more prone to investingoutside of India than they were within India, given the various issues they are facing
  policy paralysis and corruption.India needs to pull its shocks especially by the policy makers and politicians. India isnot dying; but India is simply not staying fit to fight for global economic dominion.
The pulse rate, through the economic stethoscope, says India’s economic pulse is
much slower that that of Chinese.

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