International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs.

INDIA
I. INTRODUCTION:

China is one of the biggest countries in the world and It has an area about 9.6 million square kilometers and 6.5 per cent of the world total land area is comprises by China. The capital of china is Beijing. China is also counted as a world's oldest continuous civilization. Chinas populations is 1.3 billion, people of China are composed of 56 ethnic group and the main language of china is Mandarin, Officially religions are Confucianism, Buddhism and Taoism and the currency of China is Rimini China is located on the west coast of the Pacific Ocean in the eastern part of Asia. After Canada and Russia, China is the third largest country in the world. The distance from north to south, over 5,500 kilometers east to west measures over 5,200 kilometers. China has a land border of 22,143.34 kilometers long. In the first 30 years when the PRC was founded, the Chinese governments developed system of planned economy, their targets and quotas for economic development and all set by the planning committees of the state. After this all factories produced goods according to the plan which made by States, farmers also worked and planted according to the state plans, commercial departments sold their stocks according to the state plans even quantities , qualities and prices of the goods were all set by planning departments, this system is stable for Chinas economy.. Peoples Republic of china is a single party which has power and governed by communist party of china. PRC have command over 22 provinces, direct controlled on four municipalities which are (Beijing,, Tianjin., Shanghai and Chongqing) and two regions Hong Kong and Macau which are self governing. II. HISTORY:

The history of China begins with Peking man who lived in cave near Beijing during the Paleolithic Age. The people used some simple tools; they first discovered fire and used it often in their daily lives. Mainly inhabiting caves, humans at that time were gregarious and to face the difficulties and problem they use to choose their chief based on one's ability in a system the system was called the Abdication System. After Peking man came Cro- Magnon, he evolved in the Yellow River where they were used to make silk with caterpillar, after Magnon came three dynasties in China who broke the system of Abdication and made it in on the basis of heredity these dynasties also broke the Primitive system in China and installed the roots of Class System. Those dynasties were Xia, Shang and Zhou. After these three dynasties came Lao Tzu who put the foundation of a school of thought he called The Tao. The Tao was basically philosophyy of no way which lead to the believe that what is the pathway to heaven or God. This school of thought put the foundation of Confucianism and Buddhism which also talks about morality, humanity and sincerity. After that came the Qin/Han Dynasty which blow the peace in to people of China and brought the system of bureaucracy in China. In order to protect themselves from Huns Chinese started to build the Great wall of china. After this came Buddha from India with a new philosophy modifying what was being told by Taoism. The very next dynasties were Tang and Song which invented porcelain, gunpowder and the printing press. After that came a time when the Great Wall of China was asked to be extended due to Mongols and so it broke the war against China which leads to another dynasty after the rule of Ghengez Khan and Kublai Khan. During Ming Dynasty the Mongolians were thrown out which gave Chinese and their quite a relief. Manchu was the next dynasty which closed the doors of China for outside world till the British took over China for Opium War. They took away the Honk Kong and for upcoming century China was known as the Weak Man of Asia. The dynasties end and China had World War. After the War Sun Yet Sen ruled the nation with the philosophy of Modern Chinabut communism took over China and Mao Tse Tung brought China's evolution with Collective 5 year plans and the Cultural Revolution. After the death of Mao Tse a change was observed in the vision of China and Deng Xiaoping brought the industrial revolution, he was also known as the father of Commu-Capitalism.Thus, this was the Era which gave birth to new philosophies and development in China which modernized China and made it what its today.

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA
III. CULTURE OF CHINA:

III.i Culture Dimensions: III.i.i Language: The official language is standard Chinese, which is derived from the Mandarin dialect. Whereas major language of china is MANDARIN; in other provinces where mandarin is not spoken other four dialects were considered as CANTONESE, SHANGHAINESE, FUKINESESE or HAKKA III.i.ii Religion: In mainland China, the government allows a degree of religious freedom to members of state-approved religious organizations. An accurate number of religious adherents are hard to obtain because of a lack of official data, but there is general consensus that religion has been enjoying revival over the past 20 years. A survey by Phil Zuckerman on Adherents.com found that in 1998, 59% (over 700 million) of the population was irreligious. A later survey, conducted in 2007, found that there are 300 million believers in China, constituting 23% of the population. Despite the surveys' varying results, most agree that China's traditional religionsBuddhism, Taoism, and Chinese folk religionsare the dominant faiths. According to a number of sources, Buddhism accounts for between 660 million (50%) and over 1 billion (80%) while Taoists number 400 million (30%). However, because of the fact that one person may subscribe to two or more of these traditional beliefs simultaneously and the difficulty in clearly differentiating Buddhism, Taoism, and Chinese folk religions. This was followed by Franciscan missionaries in the 13th century, Jesuits in the 16th century, and finally Protestants in the 19th century.Christianity is one of the fastest-growing. The total number of Christians is difficult to determine, as many belong to unauthorized house churches, but estimates of their number have ranged from 40 million (3% of the total population) to 54 million (4%)to as many as 130 million (10%).Islam in China dates to a mission in 651, only 18 years after Hazrat Muhammad's (S.A.W.W) death. Muslims came to China for trade, becoming prominent in the trading ports of the Song Dynasty. III.i.iii Economic System: The socialist market economy or socialist market economy with Chinese characteristics is the official term used to refer to the economic system of the People's Republic of China after the reforms of Deng Xiaoping. It is also referred to as socialism with Chinese characteristics. After foundation of PRC in 1949 for 30 years government have planned economic system in china with different set targets and quotas for various spheres. Goods and crops were planted by state plans, even qualities, quantities and prices also. This system contributed to the stable, planned development of China's economy, but it also limited the development of the economy and sapped its vitality. Economic reforms started in rural areas in 1978 when household contract responsibility system is started. Monopoly system for the purchase and marketing of agriculture system was eliminated. In 1984, the economic restructuring shifted from the rural areas to the cities, and in 1992, after some 10 years of reform and opening-up and with a clearer orientation toward the implementation of reforms and establishment of a socialist market economic system. In 1997, the Chinese government stressed that the non-public sectors of the economy were an important component part of the socialist economy of China, in which profitability was encouraged for elements of production, such as capital and technology. By 2002, reform in various fields was achieving remarkable results. A socialist market economic system has taken shape, and the basic role played by the market has been improved in the sphere of resources allocation. At the same time, the macro-control system continued to be perfected. But still few sectors are still state owned like the banking and financial institution. III.i.iv Education: The literacy rate in China is 92%, out of which 96 % are men and 88% are women.Normally China allocate Dollar 31 billion to its education. The Compulsory education policy in China is for about nine years and this policy was introduced in the 1986. The Education Stages in China are standard and are followed up in this manner. Typical Age 18-22 15-18 12-14 6-11 Education University or College Senior High School and Vocational School Junior Middle Schools Primary School Levels Varies Grade -10-12 Grades -7-9 Grades 1-6 Compulsory No No Yes Yes

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA
III.ii Trompenaars Model:

10 9 The following portrait comes out when we apply 8 Trompenaars model on china. Between universalism and 7 particularism china is more towards having their own rules 6 1 and laws which depends on the situations, they follow them 5 rather than universal rules and this makes them 2 4 particularistic in nature. Chinese are environment friendly 3 3 people they live in harmony of environment and believe in 2 it, thats why they are outer-directed in nature. They are 1 moderately collectivist and try to be neutral in their 0 behavior on affective responses rather than emotional. Chinese culture has a past orientation, they are traditional and believe in doing things they way they have always been done. In contrast to past orientation progress and change are highly valued .China is also shifting to a future orientation.; they are having a mid-range position between achieved and ascribed status (i.e. how people gain status in a society).Finally china is seen as being highly diffuse with peoples multiple roles intersecting and overlapping in contrast to the more separated roles typically found in the west. The picture that emerges is not dissimilar to that of Hofstede; however, the different starting point in the analysis leads to somewhat different conclusions. Still, a lot can be learned at least on a general level from using this model about people living and working in mainstream china.

10

China

III.iii Hofstede Model:

National cultures of china can be described according to the analysis of Geert Hofstede model. The five dimensions are Power Distance, 5 Individualism, Masculinity, Uncertainty Avoidance and Long-Term Orientation. Geert Hofstede analysis for China has Long-term Orientation (LTO) the highest-ranking factor at 8, which is true for all Asian cultures. This Dimension indicates a society's time perspective 0 and an attitude of persevering; that is, overcoming obstacles with time, LTO IDV PDI MAS UAI if not with will and strength. The Chinese rank lower than any other Asian country in the Individualism (IDV) ranking, at 3. This may be attributed, in part, to the high level of emphasis on a Collectivist society by the Communist rule, as compared to one of Individualism. The low Individualism ranking is manifest in a close and committed member 'group', be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount. The society fosters strong relationships where everyone takes responsibility for fellow members of their group. China's significantly ranks higher at Power Distance i-e 8 compared to the other Far East Asian countries' average of 6, and the world average of 5.5. This is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily forced upon the population, but rather accepted by the society as their cultural heritage. China presents a high degree of acceptance of uncertainty4 which is a characteristic of a society that does not try to take control of the future, and that is not afraid of unforeseen situations. The Chinese society does not feel such an urge to establish strict rules to overcome uncertainty or ambiguity. It is also characteristic of a society that is more tolerant towards opinions, behaviors that are different from its own, and changes. And it is a more meditative society which does not feel the need of controlling its environment. China is relatively more masculine and ranks at 5.5 and it is the Asian country that has the highest degree of masculinity following Japan. This degree is influenced by the tremendous discrimination in China towards girls. The policy of birth control that was introduced, basing on one single child, has been followed by a strange increase in girls mortality. The strong preference of boys is due to the traditional values, but also a consequence of poverty, as in the rural areas it is the son who will take care of his parents, while traditionally girls dont work and are therefore unable to take care of the family. For this reason, Chinese society is very chauvinistic and there is a strong role differentiation between men and women. Men hold most of the responsibility and power positions. The role of women in

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA
China is very limited, even though it seems to be taking more importance in the cities and more developed regions. Especially in the rural areas their status is inferior. The country is far from setting up men-women parity.

IV.

ECONOMIC AND BUSINESS SCENERIO:

China's economy is the second largest in the world and its Gross Domestic Product is worth 5879 billion dollars or 9.48% of the world economy, from 1960 until 2010 according to the World Bank average Gross Domestic Product of China was 839.37 billion dollars and in December of 2010 it has reaching an historical height of 5878.63 billion dollars and in 1962 there was a record low of 46.46 billion dollars. During the past 30 years China's economy has changed to a more market-oriented from a centrally planned system IV.i Imports: In October of 2011 China imports were 140.6 Billion USD. China imports are mainly commodities; iron and steel, oil and mineral fuels as well as machinery and equipment, plastics, optical and medical equipment and organic chemicals. Chinas top import suppliers are Japan, South Korea, Taiwan, USA and Germany. Table: China's Top Imports by the year 2010 ($ billions) stiff stubborn

Commodity description Electrical machinery and equipment Mineral fuel and oil Power generation equipment Ores, slag and ash Optics and medical equipment Plastics and articles thereof Inorganic and organic chemicals Vehicles, excluding rail Copper and articles thereof Iron and steel

Volume % change over 2009 314.4 188.7 172.3 108.6 89.8 63.7 58.2* 49.5 46.1 34.5* 29.0 52.1 39.4 54.9 34.1 31.3 37.2* 74.5 55.8 -6.1*

IV.ii Exports: In October of 2011 China exports were worth 157.5 Billion USD. The increase in Export growth is the major component that supported the Chinas rapid economic growth. Exports of goods and services have contributed 39.7% of GDP. Chinas biggest export destinations are USA, Honk Kong, Japan, South Korea and Germany.

Commodity description Electrical machinery and equipment Power generation equipment Apparel Iron and steel Optics and medical equipment

Volume 388.8 309.8 121.1* 68.1* 52.1

% change over 2009 29.1 31.4 20.5* 44.1* 34.0

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA

Furniture Inorganic and organic chemicals Ships and boats Vehicles, excluding rail Footwear

50.6 43.2* 40.3 38.4 35.6

30.0 34.9* 42.1 37.5 27.1

IV.iii Foreign Direct Investment: China introduces the open door policy twenty years ago because of their size, which provide Hugh laboratory to test major structural changes in china and world economy. Opportunities were also there related improvement and positive fall outs of Chinese economic reforms. Fusion of studies shows changes in chinas external and internal economic structure is due to FDI. Since china has introduces reform in economy, china has received a large amount of international FDI since 1978. China is at 2nd position in terms of getting FDI after US, but 1st among developing ones with FDI inflows of billion, which is equivalent to 10 per cent of direct investment worldwide and about 30 per cent of the investment amount for all the developing countries put together. FDI source countries for china are quite large such as ASEAN countries. Among the develop countries Japan and US are most important investors in China. The main factor of motivation of FDI is to take advantage of Chinas low labor costs. The main determinants of FDI in china are size and growth of the Chinese economy and prospects, Natural and Sectorial and geographical distribution of FDI in China, Physical, financial and technological infrastructure, Openness to international trade and access to international markets, Development of the regulatory framework and economic policy coherence, Investment protection and promotion. IV.iv Absolute Advantage: The journey begins from the year 1978 when the government of China decided to move away from a centrally planned economic system towards more market driven, at the same time maintaining its strict political system. This included a shift in to the household responsibility of agriculture instead of old collectivism. During the same period small private organizations and light industries were established. These not only doubled the agriculture output in 1980s but also gain in the industry especially in those areas which are industry driven like Honk Kong and Taiwan; this was helped by the foreign direct investments in these areas due to low labor cost of China. The annual average rate of FDI was between 2.7 billion dollars during the year 1985 and 1990; these FDI grew to 45.2 billion dollars during the year 1997making the China worlds largest receivers of FDI after USA. So, over past 20 years this inflow has resulted in capital investments of dollar 216 billion which provided 20% to 30% of Chinas economic growth during 1980s and 1990s.The manufacturing in 1996 due to FDIs was highly concentrated in areas like toys, shoes, electrical appliances and other labor intensive items. The trend moved in this manner after China became the receiver of FDI.
Agriculture Miscellaneous Electronic Appliances Shift towards the production of more electronic appliances and increased exports of electronic items. Making the labors more skilled for the sake of production. Era after 1997 till 2010

Society based on agriculture like Silk Etc.

Shift towards the manufacturing oftoys, shoesand alsoelectronic applianceswith few skilled labors. Era after 1978 till1997.

Era before1978

Explanation: The figure drawn above shows the trend from the era before 1978s till present in which initially China has its absolute advantage in only agricultural products like silk, Later it shifted to goods like shoes, toys, footwear, apparel and also electronic appliances when China stated to receive FDIs. During this era there was no significant progress in production of electronic appliances as compare to other items like toys, footwear etc., this was due to few skilled labors in China. Keeping in

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA
view this limitation China started to work more on their labors and making them more skilled, this phenomena cover the late 1990s and also the present scenario is good representative of this trend. Hence it can be said that China is moving more towards production of electronic items but still has its absolute advantage in making miscellaneous goods as China is still striving to make its labor more skilled so that they can reduce the quantity of imports in order to get more trade surplus on the their exports of electronic items.

IV.v Comparative Advantage: Chinas comparative advantage is considered to be the impact of FDI on china. As seen that chinas major strength in international trade is due to concentrated in a limited number of labor-intensive manufacturing products. Leather and shoes, apparel, miscellaneous manufactured products (toys, sports goods). Its major structural weaknesses have been located in capital and technology intensive goods: 12 machinery, engines, intermediate textile products, 10 and plastics. China had positive net exports only in 8 labor intensive products both in its trade with Asia 6 and with the rest of the world. Chinas specialization 4 patterns have nevertheless evolved. Its comparative 1990 2 advantages in some of the more traditional sectors 1997 0 (clothing and knitwear, carpets) leveled off in the 2003 nineties, while new comparative advantages -2 2010 emerged and others diminished. In particular, China -4 built up new comparative advantages in computer equipment, consumer electronics, electrical apparatus and household electrical appliances through a very rapid increase in exports. At the same time it gave up its comparative advantage in three sectors, among which crude and refined oil. These shifts in specialization also changed Chinas position in world trade. According to Ricardo theory of comparative advantage each country should produce/export those product more efficiently than other one in which they can utilize less resources as well import that product from other country in which they were efficient. Applying comparative advantage theory on China and India we have taking two commodities machinery and iron. In both these commodities china and India are advantageously placed in global world. Now for the explanation china has absolute advantage in the production of both products. Assume that china takes 10 and 13 resources respectively in producing 1 unit of machinery and iron. Thus for its 200 resources china would be having 20 units of machinery with no iron and 15 units of iron with no machinery. In India it is 40 and 20, respectively 5 and 10 units of machinery and iron. Without trade with each other these figures would be cut down to half of them thus without trade total of both countries production of commodities would be 12.5 for both. But we can see that china has absolute advantage in machinery as it can produce 4 times more than India but only 1.5 times of iron. So china is more comparative in producing machinery. This trade imbalance can be removed if they start trade between them in these commodities.
Resource required to produce 1 unit of machinery and 1 ton of iron Machinery 10 13.33 40 20 Production and consumption without trade 10 7.5 2.5 5 12.5 12.5 Production with specialization 15 0.0 10 15 13.75

iron

China India China India

China India

3.75

IV.vi HO-Model: The use of technology in manufacturing of the commodities is same and the amount of the capital and labor differs.

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA
Labor and capital are mobile with in the country but not in the outside world. Key Formula(s):K/L (country 1) > K/L (country 2) (This shows the capital intensity of country 1)..Eq. 1

K.Y/L.Y (COUNTRY 1) >K.X/L.X (COUNTRY 2) (This shows the capital intensity of country 1) Eq. 2 r/w (country 1) < r/w (country 2 ),this shows labor abundances of country 2..Eq. 3 Notations:r= price of capital, w= price of labor, ,K= capital and L= Labor. Commodities:Two commodities Good Y thats softwares for India and Good X thats electric machines for China.For the production of softwares (IT) India needs brain power ,innovation and high investments in order to grow ,whereas, For the production of Electric Machines Chinas imports goods from highly capital intensive countries and only assembles the part with the help of its cheap labor in order to export it further. Hence softwares and its production needs capital intensity and production of electric machines need labor intensity. Lets prove with the help of the graph.
y-axis 20 Capital 15 (Software) 10 5B 0 5 10 15 20 x-axis A

Labor (electric machines) The above graph shows the quantity of the labors and capital required for production of both the commodities, lets say that India needs $20 Capital to come up with one unit and requires 5 labors for that and on the other hand China requires 20 labors for the production of unit of electric machines and the capital requirement is $ 4 for that, put these figures in equation 1 now. K./L (commodity Y i-e Softwares) =20/5= 4 and K/L (commodity X i-e Electric Machines) = 4/20=0.2. This shows that K/L (1) >K/L (2), this shows that India is more capital intensive than China.Similar formula is applied for the price of labor and capital ie r/w(country 1) < r/w(country 2),this shows that country 1 is more capital abundant V. POLITICAL SYSTEM:

V.i National People's Congress: The National Peoples Congress (NPC) is the highest authority and highest legislative house in the Peoples Republic of China and NPC have 2,987 members and its the largest parliament in the world .the, NPC gather through People Political consultative conference (CPPCC) whose member belongs various defined group of society. NPC has power to elect president of the People Republic of China by approved from state council and top officials. V.ii Chinese People's Political Consultative Conference: The Chinese People's Political Consultative Conference (CPPCC) is an optional in the PRC, the role that CPPCC plays in the Chinese Government gives the basic introduction of the PRC establishment, its role and power are similar to advisory legislative upper house and members in NPC are also elected through CPPCC from United Front and individual people which are not part of any party. V.iii Communist Party of China: Communist Party of China (CPC) is that party which is the head ruling on the PRC. Communist party is the only party in China which maintained unitary governments and centralizing the state, military and media, this party was founded in 1921 in Shanghai the party leader is changed after five years through NPC.

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA
The people Republic of China is remaining only communist state out of five states which are Vietnam, North Korea, Laos, and Cuba, but PRC, s is also described as a socialist and autocratic under the restrictions or rules of PRC,s in many areas like on the press, internet and freedom of religion etc. "Communism with Chinese characteristics. Is termed by its leader for current political/economic system. There is no liberal democracy or social democracy in PRC,s that exists in most of Europe or North America, and the National People's Congress is the party which have highest authority and is also known as "rubber stamp" body. Hu Jintao is the president of PRC,s who is also the working as General Secretary of the Communist Party of China, Wen Jiabao is a premier(chief Minister), who is also a member of the CPC Politburo Standing Committee. Communist party is the only party which ruled China, there are other parties as well in the PRC are which help and participate in the National peoples Congress (NPC) and Chinese Peoples Political Consultative Conference (CPPCC). The political system of China is moving towards politicalliberalization; by mean that open elections can be held at the village and town levels so that legislature have showiness boldness from time to time. But CPC always wins in the absence of meaningful opposition .PRC reduce the gap between rich and poor and government leadership fighting corruption. Administrative divisions: Over 22 provinces the People's Republic of China has control and Taiwan is also considered as 23rd province, although Taiwan is currently governed by the Republic of China, China also has five autonomous regions where high population of ethnic group and they have their own local government but also have legislature rights, four municipalities; and two Special Administrative Regions which is provincial division of PRC,s and it made under some conditions by National peoples Congress , which enjoy a degree of political autonomy. These 22 provinces, five autonomous regions, and four municipalities can be collectively referred to as "mainland China".

How the Government Forms: A Process Chart: THE MAIN PARTY

General Secretary

Standing Committee Standing Committee

President

Politibure National party Congress

Judiciary

Legislature

Government

Supreme Peoples court Supreme Peoples Procuratorate

Local Governments and Legislature

Standing Committee National peoples Congress

Premier Standing Committee State Council

Provincial Governments Provincial congresses Municipal Governments Municipal congresses Township Governments Township Congresses

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA
Country Governments Country congress

Public

VI.

FUTURE FORECASTING:

We say history repeats itselfin case of Japan we can say that initially it was ahead of China but due to a big change in Chinas strategy after 1978 it became the biggest receiver of FDI which made it worlds largest economy after USA, this change in the fate of China is definitely due to its low labor cost but the question which arises here is that would China be ever facing any down fall like Japan or would it remain as strong as its today? If judged on the basis of our observation the answer to this question is NO. Following reasons gives the better explanation to our observation. China has become the center of attention of the world due to its labor intensity and low labor cost, this really shows the dependency of many capital intensive countries like Japan, USA and South Korea etc., this really shows that due to this high dependency of these countries on China may be China and its progress is endless. China does not only adhere to its strategy of making Miscellaneous items only but a shift towards making its labors more skilled so that they can be used for more technical work just in order to reduce its dependency over other countries to import those items which are used in making electric appliances. Moreover, the huge population of China cannot be only utilized for labor work only but also for other sectors like IT, this way China will be enjoying the worlds dependency over it due to cheap labor and at the same time making the people more literate they can also have the benefit of improving themselves in sectors like Information Technology and work related to R&D. CONCLUSION:

VII.

VII.i Comparing India and China: VII.i.i Religious and Cultural Aspect: China and India both are the worlds most diverse nations and countries with the most ancient civilizations with the economy influenced by a lot of social, political and socio-political issues. India and China due to their ancient civilization, diversity, languages spoken, old traditional values and fast growing Economy of the world has become a center of tourism, but if we compare the two nations India has stilled missed the bus as china attracts 87 million tourists per year against India with only 2.5 million per year. This is due to lack of facilities for the tourists who visit India while comparing it with China. Both India and China can also be compared on the basis of colonization as there was no occurrence of colonization in China which made it a stable economy from very beginning,whereas, India was under the colonial rule of British for about 190 years .Well, keeping in mind religion of India and China we can see a lot similarities, if compare the one of the most practiced religion of china that is Buddhism and Hinduism which is based on worshiping Idols. Moreover, Buddha taught in the SubContinent of India which joins the two nations from religious point of view. VII.i.ii Political View: China follows the single party system concept. On the other hand, India is a pure democratic nation with multi- party system. The two different political views of the countries yet serving as the worlds most diversified nations has again captured the focus of worlds economies. VII.i.iii Economic Growth and Infrastructure: China introduced its market based economy in the year 1978 and became the worlds second largest fast moving economy after USA. According to the latest reports of IMF 2010This makes it the worlds second largest economy in terms of Nominal GDP and Purchasing Power Parity after USA. On the other hand, India has also ranked in the list of fastest growing economies of the world and is considered to be a nation which is newly industrializes. Comparing India and China on the basis of infrastructure again India would be lagging China as China is no more stuck to the basic infrastructural problem and is moving towards the further development. According to Rajiv Laal , Managing Director and Chief Executive Officer, Infrastructure Development Finance Company (IDFC) at the India Business Conference 2008 says India-China comparison is always predictable in any of the business conference The head of IDFC said the India needs to look up and needs to compare itself with one largest economy of the world in terms of its infrastructure He mentioned further by saying that in India Supply is still lagging Demand and Growth Financing the Consumption Is Leading Growth which should be replaced by Investment Leading To Consumption . If we compare India and China on the basis of BPO we can observe a

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA
different scenario, According to Ms. Hansa Iyenger Researcher and analyst at Ovum IT service The chief reason is that Indian market is more mature than the Chinese one but which makes India more stronger than China and when it comes to maturity the markets automatically shift to outsourcing rather than sheer volume which results in the drop of growth rates (comparing Indian market with USA).Moreover, Chinese market is growing rapidly as enterprises in the financial services, telecoms and retail segments are massively outsourcing their back-office. Comparing India and China on each note one can say that both the nations are sharing similar characteristics but still the economy of China is more stable as compare to India due to Indias lack of infrastructure, increased poverty and deficiency of education. Moreover, Indias as an economy can be threat for China as well as due to their parallel characteristics but China is still safe due to their fast growing economy and Indias steady growth in comparison with China. VII.i.iv Does China and India Complement each other?Mr. Penng Gang, Economic and Commercial Counselor of Chinese Embassy in India, while giving his speech during a seminar organized by Confederation of Indian Industry (CII) described China as the world factory and India as the worlds office. He further said Both the nations can complement each other as infrastructural development in China along with Indians skilled- English and brain power, the two nations can achieve a lot in the foreign trade .He explained further the need why both the nations should strengthen their financial exchanges by saying that There are 10 branches of Indian Commercial banks in china, whereas, NDBC and ICBC have also set up few businesses in India as India is a good place for attracting FDIs and investing over. He set up the trade target of about USD 100 Billion by the year 2015. seriously then both the nations can put the foundation of friendly and peaceful trade for each other which will be helpful for both the countries in climbing up more and setting up strongest position in worlds economy. REFERENCES: AmitaBatra, Z. K. (august 2005). Revealed Comparative Advantage:. china. (n.d.). Retrieved from www.wikipedia.org/china. chinaguide. (n.d.). Retrieved from http://www.travelchinaguide.com/intro/ . Chinese Values. (n.d.). Retrieved from http://www.irespect.net/Untold%20Stories/Chinese/Chinese%20Values.htm. chinese-cultural-values. (n.d.). Retrieved from http://www.china-window.com/china_business/china_business_tips/chinesecultural-values-a.shtml . chinese-history-four-social-classes. (n.d.). Retrieved from http://www.essortment.com/chinese-history-four-social-classes21266.html . cyborlink, china. (n.d.). Retrieved from www.cyborlink.com/besite/china.htm . Doing-Chinese-Business-Based-On-Hofstede. (n.d.). Retrieved from http://ezinearticles.com/?Doing-Chinese-Business-BasedOn-Hofstede&id=797967. geert-hofstede. (n.d.). Retrieved from http://www.geert-hofstede.com/hofstede_china.shtml . icrier. (2006). Retrieved from www.icrier.orgs. Labonte, C. K. (n.d.). Is China a Threat to the U.S. Economy? MAIN DETERMINANTS AND IMPACTS OF FOREIGN DIRECT. (December 2000.). DIRECTORATE FOR FINANCIAL, FISCAL AND ENTERPRISE AFFAIRS . TRADINGECONOMICS. (n.d.). Retrieved from HTTP://WWW.TRADINGECONOMICS.COM/CHINA/EXPORTS. Wang, Y. (n.d.). Chinas Cheap Labor and Its Export Capacity.

10

International Business Group no. 2: Rubab Zehra(L);M. Owais Iqbal;Saad Nisar; Farah Maqbol; Farina Mirza CHINA Vs. INDIA

11