INDIA-CHINA

Sonam Taneja (103)

Sooraj R. (104)
 EMERGENCE OF THE ASIAN
GIANTS
 Together account for 2.5 billion people.

 Engines of growth in the midst of rapid

economic transformation in the global
economy.

 Major factors behind the shifting of the global

economic focus towards Asia.
 Comparing Asian Giants

CHINA INDIA
 Population: 1.3  Population:1.147
billion billion
 Driving Force:  Driving Force:
Manufacturing Services
 Largest  Largest
Communist Democracy
Country  Capital: New
 Capital: Beijing Delhi
 Liberalization:  Liberalization:
1978 1991
Economic Indicators

Indicators India China

GDP $ 1.237 tr. $ 4.22 tr.
(Official)
GDP per $ 2900 $ 6100
capita (PPP)
GDP Agriculture: Agriculture:
composition 17.2% 10.6%
(by sector) Industry: 29.1% Industry: 49.2%
Services: 53.7% Services: 40.2%
Public Debt 5.1% of the 15.7% of the
GDP GDP
 Economic Indicators
Indicators India China

Exports $ 162 billion $ 1.465 trillion

Imports $ 260.35 billion $1.13 trillion

Forex reserves $ 249.27 billion $ 1.95 trillion

Mobile Users 362 million 600 million

 Countries with largest exports in 2008
Country Rank Exports in 2008 Contribution
to GDP

Germany 1 $US 1.53 trillion 40%

China 2 $US 1.465 35%

trillion
USA 3 $US 1.377 9.3%
trillion
Japan 4 $US 776.8 billion 16%

France 5 $US 629.7 billion 21%

Italy 6 $US 566.1 billion 23.5%

Netherlands 7 $US 537.5 billion 59%

Russia 8 $US 476 billion 27%

UK 9 $US 468.7 billion 17%

Canada 10 $US 461.8 billion 29.5%

India 26 $US 162 billion 13.09%

Countries with the largest imports in 2008

Country Rank Imports in 2008 Contribution

to GDP
USA 1 $US 2.19 trillion 15.3%

Germany 2 $US 1.202 trillion 31.5%

China 3 $US 1.156 27%

trillion
UK 4 $US 645.7 billion 23.2%

France 5 $US 833 billion 28%

Japan 6 $US 696.2 billion 14.4%

Italy 7 $US 566.8 billion 23.7%

South Korea 8 $US 435 billion 50.7%

Netherlands 9 $US 485.3 billion 50.1%

India 16 $US 287.5 23.2%

billion
 Current account balance

Country Current Account Balance

China $US 368.2 billion

India - $US 38.39 billion

USA - $US 568.8 billion

As the exports of China far exceed its imports, its current account balance
is a positive value. On the other hand, India and USA have negative
account balance as their imports exceed exports.
 IMPACT OF THE
FINANCIAL CRISIS
 Global financial crisis- staple of front page news

 Job losses

 Exports

 Imports
 JOB LOSSES - INDIA
 Indian Companies have cut half a million jobs
between October and December 2008.

 Slowest economic growth (5.3% in the fourth

quarter) since 2003.

 Global recession lowered demand for India’s goods

overseas. Manufacturers cut production.
 JOB LOSSES- CHINA
 20 million workers have already lost jobs
due to closure of export dependent
factories.

 China’s growth rate has now dropped for six

consecutive quarters.

 GDP growth of 6.8% in the fourth quarter.

Lowest growth rate since 1991.
 JOB LOSSES- U.S.A
 The US unemployment rate rose to a 25
year high of 8.1% in February.

 US February losses may have been the

highest in six decades : Bloomberg.

 650,000 jobs lost in February alone.

 Economy has shed 4.4 million jobs since

December 2007.
 EXPORTS - INDIA

 India’s exports dipped 13% in February, the

fifth decline in a row.

 India’s exports in February: $13.04 billion.

 Revised exports’ target of $175 billion for

the fiscal could not be achieved.

 India’s exports for 2008-09 - $162 billion.

 EXPORTS- CHINA

 February - Exports dropped 25.7%.

 Exports in February stood at $ 64.8 billion from a

year earlier.

 Biggest decline in 13 years.

 China’s Exports (2008-09) -$1.465 trillion.

 EXPORTS- USA

 Total export volumes of US fell 4.4% in the final

quarter of 2008 YOY.

 US trade dropped 18% between July and

November 2008.

 The monthly deficit, the difference between what

the US exports and imports narrowed 4% to
$39.9bn from November's $ 41.6bn.
IMPORTS- INDIA
 February: India’s imports fell for the second
consecutive month by about 18%.

 Imports in February - $ 17.02 billion.

 Cumulative Imports (2008-09)- $287.35 bn

as compared to $215.22 bn in 2007-08.
 IMPORTS- CHINA

 China's imports fell 24.1% in February to

$ 60bn.

 2008- China’s imports stood at $1.156

trillion.

 China’s consumption as a % of the GDP has

shrunk from 47% in 1997 to 37% in 2007.
 IMPORTS- U.S.A

 Recession depressed demand for imports.

 US imports dropped 5.9% in the final quarter

of 2008 to $173. billion in December 2008.

 Imports of autos and auto parts dropped to

$14.9 billion, the lowest level since May 1999.

 Trade deficit in December fell 4% to $39.9

billion from $ 41.6 billion in November.
 Services

India China
 53.7% of GDP  40.2% of GDP

 US $ 664 billion  US $ 1.7 trillion

 Employs 28% of labor  Employs 32% of

force labor force
 Export oriented  Domestic demand
• Indian edge - IT and
ITES
 I T industry
India China
Total Revenue $ 71.7 bn $920 bn
Growth 12% 12.5%
Hardware $ 21.1 bn $ 871
Software and $ 59.6 bn $ 49 bn
Services
Total Exports $ 47.3 bn $ 522 bn
Software and $ 47 bn $ 3 bn
Services export
Industry

India China
 29.1% of GDP  53.7 % of GDP
 US $ 360 billion  US $ 2.08 trillion
 Employs 12% of  Employs 25% of
labor force labor force
 Domestic demand  Export driven
driven  Chinese edge-
Manufacturing
Agriculture

India China
 17.2% of GDP  10.6% of GDP

 US $ 213 billion  US $ 447 billion

 Employs 60% of  Employs 43% of

work force work force
 Ranks second in  Ranks first in farm
farm output output
 Infrastructure
India China
Airports 346 467
Railways 63221 75438
Roadways 3316452 km 1930544km
SEZ 63 (234 approved) 129
Telephones 38.76 million 365.4 million
Mobile phone 362 million 600 million
Internet Users 80 million 253 million
Electricity 665.3 bn kwh 3.256 tn kwh
Expenditure $500 bn (2007-12) $1 tln (2006-10)
 Ease of doing business
India China US
Ease of doing business 122 83 3
Starting a business 121 151 6
Employing workers 89 111 1
Getting credit 28 59 5
Protecting investors 38 88 5
Paying Taxes 169 132 46
Closing a business 140 62 15
India-China trade relations
 1984,India & China signed a Trade Agreement
which provided for Most Favored Nation
Treatment
 1994, the two countries signed an agreement to
avoid double taxation
 2006,border trade between India and Tibet after
40 years
 India’s export to China -US $ 13.16 billion(8.7%)
 India’s Import from China - US $ 24.43 billion(10
.6%)
 Projected GDP US $ Billion
Year Brazil China India Russia US

2000 762 1,078 469 391 9825

2010 668 2,998 929 847 13271
2020 1,333 7,070 2,104 1,741 16415
2030 2,189 14,312 4,935 2,980 20833
2040 3,740 26,439 12,367 4,467 27229
2050 6,074 44,453 27,803 5,870 35,165
FUTURE
 Require enormous natural resources
 Will outsource manufacturing to other
resource rich nations especially in Africa
 The global integration of China and India
will be radically different
 Future survival of most admired enterprises
will depend on how quickly they participate
in ensuing rise of China and India
 Will result in a change in power equations of
the world
FUTURE
 China has an aging population.By 2050
India will have 220 million more workers
than China.
 China will have to concentrate on their
economic software while India more on its
economic hard ware.
 China need to concentrate on innovation
while India need to refocus on
Manufacturing.
Takeaways’

 India and China are the fastest growing economies.

 India driven by services and China by
manufacturing.
 Economic meltdown had a greater impact on China
than India.
 By the middle of this century world’s economic and
political axis will shift to Asia.
 India’s growth model more sustainable than China
in the long run.