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INDIA AND CHINA EMERGING GLOBAL POWERS. :


INDIA AND CHINA EMERGING GLOBAL POWERS. KARTIK JAIN BBA Ist -C

INTRODUCTION :
INTRODUCTION China and India: emerging global economic players High economic growth rates Rapidly
rising share in world exports Large inflows of foreign investment Engines of demand growth in commodities
Positive demographics

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China’s admirers have two typical openings gambits in any comparison of China with India . The first is ,
“Look at China with Infrastructure – where is China and where is India !” The second commiserates with the
presence of drags to growth in India’s political system. If China opened up in 1978, India did so in1991, i.e.,
14 years after China therefore , any comparison of India of today should be made with China as it was more
than a decade ago as emerging global powers now. Since the two countries had similar labour endowments
and development lags due to government controls and the protected nature of their economies , they can be
expected to follow similar growth paths on opening up. Chart follows:-

Comparisons 1995 to Most Recent :


Comparisons 1995 to Most Recent ©cjd

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Emerging Markets Compared

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India's greater expertise with market also shows in the financial sector, which is more deeper and more
robust then Chinese counterpart . Chinese delegation used to ask Indian only about the ICT sector ; in
recent year Chinese want to know how bank non- performing assets were lowered and how exchange rates
are flexible even without full capital account convertible.

China Vs. India- A Comparative Snapshot (2007) :


China Vs. India- A Comparative Snapshot (2007)

PRE-CONDITIONS FOR A PEACEFUL GLOBAL POWER TRANSITION :


PRE-CONDITIONS FOR A PEACEFUL GLOBAL POWER TRANSITION Much of China ‘s dazzling new
infrastructure was built in the late 1990s , and India is gearing up to the repeat that performance in the latter
part of this decade . Foreign inflows into China jumped substantially in the early 1990s ,and those into India
have ,as was to be expected, jumped in the mid-2000s.

Slide 9:
Good education and health facilities are necessary for inclusive development they are state subjects in India
,in china also , local government has a large share of the responsibility for their provision. The Chinese
culture is more homogenous , while India has greater diversity. India's greater expertise with market also
shows in the financial sector, which is more deeper and more robust then Chinese counterpart .

Slide 10:
Very high economic growth, large internal market Very high savings and investment rate Excellent at tapping
into global knowledge through direct foreign investment and Chinese Diaspora Becoming world’s
manufacturing base Very large supply of excess labor will continue to give it low wage advantage But
moving rapidly up value chain from labor intensive to more technology intensive exports Efficient export
trade logistics Critical mass in R&D is beginning to be deployed to increase competitiveness Strong
investments in education and training Government with strong sense of national purpose ©cjd China--
Strengths

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Jumped from traditional rate of 2-3% growth in past decades to 6-8% last decade Strong science and
engineering capabilities centered in chemical and software areas Is becoming worlds service center for
software development and back office offshore outsourcing Is also becoming center for contract innovation
work for multinational companies Has large critical mass of educated, skilled, and English speaking
knowledge workers and can increase this stock Has network of successful Indians in US and Europe
providing links to markets, technology, and finance Relatively deep financial markets Is strengthening export
orientation, and seeking strategic alliances, but strength is limited more to intangible trade rather than
tangibles trade because of high infrastructure and regulatory costs ©cjd India -- Strengths

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Importance of nation state in developing long term strategy for country, providing stable macroeconomic
framework, pragmatism in transition to market economy developing an institutional means for development
to take place focusing for several decades on the importance of education and science and technology
Importance of integration to world economy and of trade in goods as engine of growth Very effective use of
direct foreign investment to move up technology ladder Strong investments in human capital as fundamental
step to make the transition Effective use of Chinese Diaspora in high tech parks and to bring in technology
and access to markets ©cjd China -- Lessons

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Importance of investments in high level technical, scientific, and managerial capital through network of
Indian Institutes of Technology and Indian Management Institutes Importance of turning brain drain to brain
gain by harnessing Indian Diaspora in global high tech industry Importance of moving from self-reliance to
greater international integration to accelerate and sustain growth Importance of improving the whole legal
and regulatory environment to stimulate greater innovation and get more out of growing critical mass of
resources allocated to R&D Importance of tackling necessary reforms in regulatory regime and improving
infrastructure and education to really emerge as major export power ©cjd India -- Lessons

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CONCLUDE

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The two countries can develop similar position on international negotiations to counter pressure from lobbies
that would make developing countries bear much of the cost of moderating the climate change created by
current develop nations. At the same time , promoting technology and renewable energy based solutions will
mitigate the need for intense future competition over energy. SO IT COULD BE CHINA AND INDIA IN THE
FUTURE, NOT CHINA VERSUS INDIA. Thank you!