This document provides a comparative analysis of the economies of India and China. It summarizes that both countries had very poor and isolated economies 50 years ago but have since emerged as economic giants through economic reforms and rapid growth. India's growth started in 1991 with an average rate of 6% over the past two decades, while China's began in 1978 with an average of 9.5%. China has specialized more in mass manufacturing while India's strengths are in services like software and call centers. The document outlines key statistics and growth trends in the economies, populations, currencies, agricultural, manufacturing and service sectors of both countries. It also discusses some of India and China's current economic challenges and prospects for cooperation and impact on world trade by 2020.
1. The Institute of Chartered Accountants of India
(Setup by an Act of Parliament)
A Comparative Analysis
A Presentation by :
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2. ECONOMIES OF BOTH COUNTRIES
Market based system
Centrally planned Economy
Foreign trade and foreign
investment are integral part of
Indian economy
Private businesses and
capitalism were suppressed
Fastest growing economy
World’s second largest labor
force
Privatization of Farmland
Promotion of foreign
investment
Flourishing small scale
entrepreneurs
3. 50 yrs ago, India and China were among the poorest and
economically most isolated countries in the world.
How did China and India
emerge as economic
giants?
4. Comparing India and China’s Growth Stories
Indicators
Political System
Speed of
Growth
Areas of
Specialization
India
China
Multi-party
Democracy
One-party
authoritarian rule
Economic reforms
started in 1991.
Average 6% growth
rate in past two
decades.
Rising power in
software, design,
services, and
precision industry.
Economic reforms
started in 1978.
Average 9.5%
growth rate in past
two decades.
Dominant in mass
manufacturing,
electronics and
heavy industrial
plants
5. What are India & China famous for today?
CALL CENTRES & COMPUTER
ENGINEERS
LOW PRICED CONSUMER
GOODS
6. India – Economic Fact Sheet
GDP- real growth rate:
6.5% (2012 est.)
7.7% (2011 est.)
11.2% (2010 est.)
GDP – per capita (PPP – Purchasing power parity)
$3,900 (2012 est.)
$3,800 (2011 est.)
$3,600 (2010 est.)
note: data are in 2012 US dollars
GDP – Composition by sector:
agriculture: 17.4%
industries: 26.1%
services: 56.5%
(2012 est.)
7. China – Economic Fact Sheet
GDP – real growth rate:
7.8% (2012 est.)
9.3% (2011 est.)
10.4% (2010 est.)
GDP-Per capita (PPP-Purchasing power parity):
$9,300 (2012 est.)
$8,700 (2011 est.)
$8,000 (2010 est.)
note: data are in 2012 US dollars
GDP – composition by sector:
agriculture: 10.1%
industries: 45.3%
services: 44.6%
(2012 est.)
8. AGRICULTURAL SECTOR
•India is an agricultural country.
•Growth of service sector is pushing
down the contribution of agriculture.
•Contributing 17.2% of the GDP.
•Largely depends on monsoon.
•Provides employment to two-thirds of
the
total population.
•15% of export earnings
•Rural women play a vital role, 50% of
rural labor force.
•Yields per hectare of crops in India are
very low
Agriculture accounted for 10.6 % of
the GDP
33o million- over 45% of labor force
still makes living from farming.
Farming methods have been
improved in China.
China produces
wheat, rice, potatoes, peanuts, millet, c
otton.
Only 15 percent of the total land
available in China can be cultivated.
More than 75 percent of the total
cultivated land is used for producing
food crops.
9. MANUFACTURING SECTOR
•Manufacturing contributes around 15% of
GDP of the country.
•India rank’s among top 12 producers of
manufacturing value added products.
•Chinese manufacturing sector accounts for
43% of Chinese economy.
•Its economy growth in average of almost
8% every year.
•There are many Companies who wants to
make India as their manufacturing hub, they
are:
•Chinese manufacturing sector ranks 4th in
the world after US, Japan, & Germany.
•LG wants to make India its global
manufacturing hub for its mobile handsets.
•China has 50% share of worldwide camera
market & 30% of Air conditioners .
•Hyundai has make India the manufacturing
& exporting hub for its small cars. Their i10
is being manufactured only in India &
exported to the world.
•25% of Washing Machines & 20% of
Refrigerators.
10. Continued ..
•Luxury brands like Louis Vuitton are
looking at India as a manufacturing base
for their products.
•Skoda Auto plans to make India its
regional manufacturing hub.
• Aircraft manufacturing Airbus is
considering India as one of the centers for
design & development of its long haul
A350 plane.
•Samsung plans to invest 100 million US
$ in its manufacturing plant near Chennai
& make it its global hub.
•China’s fast growing domestic market
worldwide demand for Chinese goods
& the cost advantage China offers to
manufacturers are fueling the growth of
manufacturing sector in China.
•In all, China is much ahead of India in
manufacturing sector
* According to Investment
Commission of India the manufacturing
sector is estimated to have 180 billion
US $ investment opportunity over next
5 years
11. Service sector
INDIA
CHINA
54 per cent of GDP
Below 41 per cent of GDP
Since 1978 to 2011 :
Average Annual Growth rate is 8.1%
Average Annual Growth rate is 10.8%
Employment Opportunities :
Low
Employment Opportunities :
High
Most advanced service sector :
Delhi with a GDP share of 77 per cent
Most advanced service sector :
Beijing with a GDP share of 61 per cent
A net exporter of services
A net importer of services
16. China’s Problem
Middle Income Trap (transition from middle income to high
income status).
Ageing population - "one child" policy.
High domestic savings rate and correspondingly low domestic
demand.
As China's per capita income rises, its 1.34 billion people will
increasingly yearn for real freedom: a free press, an open
Internet and, most crucially, democracy.
17. INDIA AND CHINA IN 2020
• According to a recent report from
international economic think tanks, India and
China soon plans to form a trade coalition in
Asia and that is projected to boost 65% of
world trade by near 2020.Both the countries
India and China are determined to achieve
that and create a huge impact on world
economic bodies.
18. India’s long-term prospects look
Stronger
India is no. 1 talent supplier in the world.
India's advantage in having a large pool of
English speaking people.
India has the advantage of having a
vibrant, energetic and creative NGO sector.
19. India shouldn’t try to grow as rapidly as China
“Growth has to be aimed within a relevant
country context. India has its own unique
past, a very different present, and will chart
her own version of the future. In that
future, the most critical component is to
keep democracy safe.”