there is a small presentation on the Economy of China and a strategical comparison with Indian Economy.guys,have a look

2. United hands Contemporary issues

3. GROUP MEMBERS
United
Hands

4. CHINESE ECONOMY: AN INDIAN POINT OF VIEW
INDEX

6. World’s 2nd largest economy after United States
World’s fastest growing economy over 30 years,growth
rate averaging 10%
Tight economy according to the plans and policies
high menufecturing power,maximum exports,technical
advancements and high tourism support
an economy fighting with the internal unstablities
GDP growth rate 7.8 annual change
AN OUTLOOK

7. Wikipedia report says
According to IMF,China’s GDP is totallig to US$ 8.227 Trn and
nominal GDP per capita US$6,085
Initially had Soviet Style planned economy,followed by Mao’s
communism policy
economic growth equal to all G7 countries combined.
powerpoints- high productivity,low labour costs,relatively good
menufecturing
Foreign Exchange Reserves reached $2.85 Trn in 2010 and
expecting growth
Towards the end of 2012,China producing 2nd highest number of
billionairs
domestic retail market worth over 20 Trn Yuan(US$3.2 trn) and
growing over 12% annually

8. Chinese Economy: a past glance
In the Maoist Era (50 years ago).
Before 1949,the economy of China was fragile and broken
“Building a new China” in the Communist Party’s Rule.
“A GREAT FORWARD” attempt.
LI and Deng approach in the early 80’s.
they emphasise in the folollowing points-
a. rising personal income and consumption with
introduction of new managarial system.
b. Foreign trade as a major vehicle for econompc growth
c.minimum redtape in the economic zones
controlling the power of the SOE(state owned enterprizes)
FDI was introduced
Culture Revolution started.
First GDP reports

9. chinese economy : the current scenario
widespread corruption,cronysm is
instutionalised and pervasive
Undermined productivity growth
tight controll of communism
“ONE CHILD POLICY” to a social unrest
A critical and unfree economy

10. China’s weak judicial system is highly vulnerable to political
influence and corruption. All land is state-owned. Individuals
and firms may own and transfer long-term leases that are
subject to many restrictions.
The top income tax rate is 45 percent, and the top corporate tax
rate is 25 percent.The overall tax burden is equal to 18.2 percent
of total domestic income. Government spending amounts to 23.6
percent of GDP. Public debt has decreased, but large amounts of
debt are held in off-budget obligations. Slower growth may
undermine fiscal policy.
regulatory framework remains complex, arbitrary, and uneven.
Completing licensing requirements costs over three times the
level of average annual income. The labor regime remains
repressive. The state imposes price controls on a wide range of
energy, raw materials, and other basic goods.
The trade-weighted average tariff rate is 4 percent, and layers of
non-tariff barriers add to the cost of trade. The investment regime
is non-transparent and inefficient. The state continues its tight
control of the financial system as its primary means for managing
the rest of the economy.
Rule of
law
Limited
Govt.
Regulatory
efficiency
Open
markets
www.Heritage.org

11. protection of private property rights
A freezed up credit market
financial probe with Peoples’ Bank of China
the “GO WEST” policy
U.K. calling,to be the “centre for the global
innovation”
Trade falls a new sign in economic fading

12. China’s trade declined abruptly in june forecasting a rapid fall in
the further days.
Exports fell by 3.1% & imports contracted by 0.7%
Due to central bank’s cooling credit system,exports have also
gone down
Retail sales have fallen short according to HSBC survey
Exports growth to united states,china’s biggest foreign market fell
to 15.5%
www.Washington post.com

13. oil price fall affecting GDP slowdown
Menufecturing weakness in credit crunch
LI Xinping’s china dream
Affects of the global economic slowdown in 2008
the global economic slowdown in 2008 effected mostly on the exports
of the country.GDP growth fell from 14.2% in 2007 to 9.2% in 2009
IMF projection a GDP fall
Will China have a safe landing
Global financial markets were roiled after the world’s 2nd largest economy
notched only at 7.7% boost in gdp in the 1st quarter,a disappointment for a
country that jumped 10% or more over three decades.

14. China- U.S. economic relations
Resumed trade relations in 1972-73
U.S has more than 20,000 equity Joint ventures and
SOEs
U.S. trade defcit with mainland china exceeded $350 bn
in 2006 and it was United states’s largest bilateral trade
deficit
Undervaluation of renimbi relative to U.S.$
China United
states

15. In september 2009,trade dispute emerged between
China and U.S.,resulting n U.S. import tariffs on 35% on
China’s tire imports,and China accusing U.S. to be in a
“grave act of trade protectionism”
U.s. demand for labor intensive goods exceeds
domestic outputs: PRC has restrictive trade practices
which includes a wide array of barriers to foreign goods
and services,aimed to protect SOEs.these practices
includes High tariffs,lack of transparency,requiring firms
to obtain special permission to obtain goods,and
leveraging technology from foreign firms in return for
market access.

16. Chinese leaders are betting that if they can roll out a smarter
electricity grid before the United States, China can not only
address their domestic energy challenges but also get a head
start on technology standardization
China Aims to Dominate U.S. in Smart Grid Investments
China aims to modernize its energy infrastructure and dominate
clean energy technology markets abroad. At the Smart Grid
World Forum in Beijing late last month, China’s State Grid
Corporation announced plans to invest $250 billion in electric
power infrastructure upgrades over the next five years, of which
$45 billion is earmarked for smart grid technologies. According
to its three-stage plan, China will invest another $240 billion
between 2016 and 2020 (including another $45 billion toward
smart grid technologies) to complete the build-out of a
“stronger, smarter”.

17. FDI effect in China
A lower base,a higher gain
2nd leader in APEC nations
consists largely of greenfeild Fdi,Hongkong
being the largest source of fdi in PRC.
Cut throat competition from local investors
Labour uncooperation
current inflow- $124.0 billion

18. June july august september
20.12
24.13
23.09
24.8
FDI flows in last four
months

19. STIMULUS PACKAGE IMPACT
A policy initiated in 2008 to achieve GDP target rate to take he
leap in the economy
RMB 1.5 trn in public infrastructure
RMB 1trn for post quake reconstruction
RMB 370bn for technology advancement
RMB 370bn for rural development
RMB 210bn for sustainable development
RMB 150 for cultural growth
IMPACT
ACHIEVEMENT WITH CLASH BETWEEN FOREIGN AND DOMESTIC
INVESTORS

20. Causes of China’s economic growth
China’s economic growth: Pros & cons
Large scale capital investment
Rapid Production Growth
High rate of savings
High TFP (total factor productivity)
Quick policy formulation and implementation
some other potential factors
- well equipped infrastructure
- technological advancements
- balance between trade and agriculture

21. Threats to China’s economic growth
Pollution
power shortage
Growing income inequality
Property boom
Inefficient banking sector
Unemployment
Undervaluation of Yuan
overheading Economy

22. india is dependent upon china’s technological
equipments while china depending upon india’s
bamboo,tea,dry fish and other raw materials.
in the 12th 5year plans,both the countries have put
objectives to improve economic relation.
fight of low GDP.
agricultural growth barrier.
High DQI(development quality index) and low
HQI(health quality index)
tight policymaking v/s unpredictable policymaking
The key comparision factors
Chinese economy : an Indian point of View

23. high rate of FDI flow
the bilateral trade concept
Large imports
emerging as a menufecturing hub
Leap in the world trade
low export intensity
Inequality in imports
Dynamic economic growth v/s initaiation economic
growth

24. Geographical diversification
stiff competition
land acquisition conspiracy
poor ASEAN relation
the “look east policy”

25. Initial condition in 1980china india
Production factors and physical setting for
economy
Good basic public health & education
Wide spectrum of formal industrial
companies
Much weaker basic public health and education
Some strong large conglomerates; many small
firms
Economic institutions
Institutional set up often not compatable
With market economy.
Institutional set up broadly compatible with
market economy
Other institutions and aspects
Egalitarian land reform & distribution 40% rural people (almost) landless → Thus
without subsistence floor
Little gender imbalance Major gender inequality (literacy, participation)
Relatively homogenous society Heterogeneous society (religion, language,
caste)

26. China and India in 1980
GDP per capita (US$2005) 219 304
India China
Capital-labur ratio (US$2005) 1105 1650
Labor force/population 49 36
Average number of years of education 4.7 2.3
Total factor productivity (level) 1/ 11 18

31. FUTURE PROSPECTS
In near future,China has a strong chance of
emerging as a tecnological superpower and stepback
U.S.
As IMF has projected,China can up their trade growths
from 7.5% to 7.9%by the end of the year
Till 2020, GDP is planned to be amount to 38 trillion,
per capita GDP will reach 26,000 yuan.
low labour costs to bring to strenghthen China’s
industrial growth.
boost the tourism sector by innovating newer policies
and add wealth to the economy

33. CONCLUSION
Expected growth in the economy
Current scenario- a battling moment for India
Future threat to the U.S. as well as for the
developed countries.

34. SOURCES
Wikipedia
The times of india
The econmic times
The Economist
Peoples magazine china
Forbes
Time
Reports of Heritage foundation and Wall Street journal
Thomas j. Rowsky’s report on China’s institutional
investments
Swapan and Biswan k. bhattacharya repoprt on India-China
trade relations
Baladasd Ghosal report,