A Comparison Between India and China

8/6/2019 A Comparison Between India and China

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A Comparison between Indiaand China


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Flow Of the Presentation

Geographic Location

Introduction Liberalization of market Economy Political Set up Infrastructure

Manufacturing Sector Services Sector Banking sector Retailing Currency System

Macro economic Variables Real Comparison Issues confronting India Issues confronting China


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Geographic Location

Two territories which are currently the disputed territories are ArunachalPradesh and Aksai Chin. Two countries share borders across Himalayas,

Nepal and Bhutan. Both countries respect the Actual line of control.


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INTRODUCTION

CHINA

International hub forhardware design andmanufacturing.

Growth rate between

8-9%. FDI is much more

than what Indiaattracts.

INDIA

India specializes inPharmaceuticalsector and IT/BPOservices, call centers,back office operationsand R&D.

Growth rate between6-8%.

FDI in India is 7- 8times lesser thanChina.

SIMMILARITIES-Both the countries have enormous populations, low labour costs, both

benefit from highly skilled engineers and active entrepreneurial sectors.


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Liberalization of The Market

China started towards the liberalization of itsmarket economy that was in 1978.

India was very slow in embracing globalization

and open market economies, liberalizationpolicies started in the 1990s in India.

China welcomed FDIs and PIs in the mid1980s. This made a significant change in itseconomy and the GDP increased considerably


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Economy

CHINA

Third Largest inthe world by

nominal value.

Exports : $1.43trillion

Imports : $1.13trillion

Gross external debt :

$374.66 billion(2008)

INDIATwelfth largest in

the world bynominal value.

Exports :$175.7 billion

Imports : $287.5billion

Gross external debt :$227.70 billion(30 June

09)


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Political Set Up

CHINA

Authoritarian

Regime

More Quick,Enduring and

unpopulardecisions

Better Infrastructureenables efficient

investment

INDIA

Democratic

Set Up

Difficult and timeconsuming in

Democracy

Free flow of Informationoffers economic

advantage


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CHINA

Better physicaland modern

infrastructure

Spendsconsiderably

more

Highwaycoverage inmillion kms

INDIA

Lacks capital

Spendsconsiderably

more

Highwaycoverage

much lesserthan China

Infrastructure


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CHINA

49.2% ofChinese GDP.

Ranks 4th in theworld after US,

Japan, & Germany.

INDIA

29% of IndiasGDP

Hub forcompanies likeSuzuki, SkodaAuto, Samsung

etc.

Manufacturing Sector


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CHINA

40% of ChineseGDP.

Net importer ofservices

INDIA

53.7% of IndianGDP.

Net exporter ofservices

Services Sector


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Banking Sector

CHINA

Banks owned by central govt-9,

Banks owned by local govt- 7

Many others like privately ownedbanks, banks incorporated in the

special administrative regions etc.

The Peoples Bank Of China IsCentral Bank Of China

INDIA

88 Commercial Banks , 27Public Sector Banks.

Nationalized banks withhigher quality, as they

have 53000 branches and17000 ATMs

Reserve Bank Of India IsCentral Bank Of India


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Retailing

CHINA

Modernized andmassiveinvestment

Standardizedproduction and

distributionsystem

INDIA

RetailLiberalizationhas just begin

Highlyfragmented

industry


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Currency System

CHINA

Renminbidenominated asChinese Yuan.

Subdivided into 100fen

Issued by PeoplesBank Of China

INDIA

Only legal tender-Indian Rupee

Subdivided into100 paise

Issued by Reserve BankOf India


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Macroeconomic Variables

FACTS INDIA CHINA

GDParound $1.209

trillionaround $7.8 trillion

GDP growth 6.7% 9.1%

Per capital GDP $1016 $6,100

Inflation 7.8 % -1.2 %

Labor Force 523.5 million 807.7 million

Unemployment 6.8 % 4.3 %


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CHENGDU- The New Destination

Chengdu Tianfu Software Park.

Support from government

An abundant reserve of talent,

Low costs

Well-established infrastructure.

As of December 2009, there are over 100 companiesoperating in the park (40% foreign invested) for a total of14,000 people

IBM, Accenture (2009), Symantec, Huawei, SAP, Nokia-Siemens, EMC (2009), Siemens (2009),China Mobileand now recently - Wipro.


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Comparing India and Chinas Growth Stories

Indicators India China

Political System Multi-partyDemocracy One-partyauthoritarian rule

Speed of Growth Economic reformsstarted in 1991.

Average 6%growth rate in pasttwo decades.

Economic reformsstarted in 1978.

Average 9.5%growth rate in pasttwo decades.

Areas ofSpecialization

Rising power insoftware, design,services, andprecision industry.

Dominant in massmanufacturing,electronics andheavy industrialplants


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Indicators India China

Foreign DirectInvestment

6.8% (up from0.3% in 2004)

17.8%

Future Areas ofgrowth

R&D, bio-technology, high-

value IT enabledservices,manufacturing,agro-based

industry.

IT business,services and

continuedmanufacturing.

Labour Force 807.7 million

(first in the world)

523.5 million

(second in theworld)

Comparing India and Chinas Growth Stories


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Issues confronting India

Inadequate power supply.

Inadequate port facilities.

Lack of investment in rail network, roadways and water

management. Terrorism and border disputes.

Corruption.

Unemployment.

Declining contribution of agriculture sector to the GDP.


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Issues confronting China

High inflation.

Border disputes.

Banking sector risk.

Heavy dependency on exports.

Less consumption. Very high volatility in markets.

Ageing population.


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Cheers to CHINDIA !!!!


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Thank You! Tanu Mahajan

Sorav Gupta

Divya

Nitin

Rishav Surbhi

Mansi

Aastha

Disha Shivani Kathuria

Vikas

A Comparison Between India and China

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