A Comparative Analysis

ECONOMIES OF BOTH COUNTRIES

Market based system

Foreign trade and foreign investment are integral part of Indian economy

Fastest growing economy

World’s second largest labor force

Centrally planned Economy

Private businesses and capitalism were suppressed

Privatization of Farmland

Promotion of foreign investment

Flourishing small scale entrepreneurs

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?

What are India & China famous for today?

CALL CENTRES & COMPUTER ENGINEERS

LOW PRICED CONSUMER GOODS

Comparing India and China’s Growth Stories

Indicators India ChinaPolitical System

Multi-party Democracy

One-party authoritarian rule

Speed of Growth

Economic reforms started in 1991. Average 6% growth rate in past two decades.

Economic reforms started in 1978. Average 9.5% growth rate in past two decades.

Areas of Specialization

Rising power in software, design, services, and precision industry.

Dominant in mass manufacturing, electronics and heavy industrial plants

India and china – Economic Fact SheetGDP- real growth rate: INDIA CHINA 7.6% (2015)  6.9% (2015) 7.2% (2014)  7.3% (2014)

GDP – per capita (PPP – Purchasing power parity) INDIA CHINA $5,730 (2015 est.) $13,400 (2015 est.)   $5,391 (2014 est.)  $12,599 (2014 est.)

GDP – Composition by sector: INDIA CHINAagriculture: 16.11%  agriculture: 10%  industries: 31.37%  industries: 43.9% services: 52.52% services: 46.1% (2015 est.) (2015 est.)

AGRICULTURAL SECTOR

• 33 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, cotton.

• Only 15 percent of the total land available in China can be cultivated.

Growth of service sector is pushing down the contribution of agriculture.

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.

MANUFACTURING SECTOR

• India rank’s among top 12 producers of manufacturing value added products.

• There are many Companies who wants to make India as their manufacturing hub, they are:

• LG wants to make India its global manufacturing hub for its mobile handsets.

• Hyundai has make India the manufacturing & exporting hub for its small cars. Their i10 is being manufactured only in India & exported to the world.

• Its economy growth in average of almost 8% every year.

• Chinese manufacturing sector ranks 4th in the world after US, Japan, & Germany.

• China has 50% share of worldwide camera market & 30% of Air conditioners .

• 25% of Washing Machines & 20% of Refrigerators.

Service sectorINDIA CHINA

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

India’s ProblemInfrastructure sector.

Insufficient investments.

Losing the best and the brightest abroad.Constraint's in labor market needed for manufacturing Industry.

China’s ProblemMiddle 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.

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.

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.

“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.”

India shouldn’t try to grow as rapidly as China