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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
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