Compare China Vs India In Economy
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China-India Chartbook Global Risk Analysis
China & India
October 10, 2005
A visual essay The China-India chartbook is a visual essay to depict key similarities and differences between these two emerging economies, which are poised to change the global economic landscape. China’s GDP per capita is now 2.2 times higher than India’s (in USD PPP terms). Until the early 1990s, GDP per capita in China and India was at comparable levels, but China adopted wide-ranging economic reform one decade earlier than India. The Chinese economy is much more integrated with the world economy through international trade and investment, which helps to explain its stronger rate of GDP growth during most of the past 3 decades. For its economic development, China has relied on industry and India on services. China’s ratios of domestic savings and investment to GDP are roughly double those of India’s.
Editors: J. A.-Mund / N. Brandt / S. Hansakul, Frankfurt
+49 69 910-31745
Both economies currently enjoy strong external positions, with ample foreign exchange reserves. Higher oil prices are not likely to have a significant adverse impact on external liquidity. China and India have low external debt as a percentage of GDP, and the ratio of short-term external debt to foreign reserves is low. Despite declining fiscal deficits, the level of public sector debt is a cause for concern, especially in India. In particular, interest payments as a percentage of general government revenue are very high in India, making the prospect of fiscal consolidation more remote. Excess domestic liquidity presents a bigger challenge to China than India. M2 in China is heading toward 200% of GDP with domestic credit almost 170% of GDP. This explains the rapid rise in CPI inflation during 2004, on which the Chinese authorities are still keeping a tight rein. Surveys indicate India has better corporate governance standards and its companies are more commercially-driven. This explains why, despite China’s superior economic growth and macroeconomic stability, India’s rate of return on assets has been much higher, non-performing loans in the banking sector lower, and stock market performance much better. Social indicators reflect generally improving living conditions for the average Chinese. China also enjoys superior physical infrastructure, although India’s availability of skilled workers, especially engineers, is much better regarded. China’s early steps to liberalise its economy and invest heavily to modernise its physical infrastructure gave it a substantial edge over India in terms of income per capita levels. They also made China a more attractive destination to foreign investors. However, although India started economic reforms only a decade later than China, it is far more advanced in its institutional infrastructure and corporate governance. This is reflected in contrasting outcomes: foreign direct investment is considerably lower than in China, but returns on investment are better on average. The key to unlock India’s potential to rival China as an FDI destination is a decisive effort by the Indian authorities to push ahead with reforms.
1
GDP China & India: Real GDP growth
China & India: Nominal GDP
% change, yoy
USD bn
18 15
1600 India
12
China
China 1300
9
1000
6 3
India
1900
700
0
400
-3 -6 1978 1982 Source: IIF
1986
1990
1994
1998
2002
1986
1990
1994
1998
2002
China & India: GDP per capita (PPP)
China & India: GDP per capita (nominal) USD
100 1978 1982 Source: IIF
USD
1500 1300
India
6000
China
India
China
1100
5000
900
4000
700
3000
500
2000
300
1000
100 1978 1982 Source: IIF
1986
1990
1994
1998
7000
2002
0 1980
1984
1988
1992
1996
2000
2004
Source: IMF
China: Nominal GDP vs. GDP based on PPP USD bn
GDP based on PPP
8000 7000
nom GDP
India: Nominal GDP vs. GDP based on PPP USD bn GDP based on PPP
4000
nom GDP
6000
3000
5000 4000
2000
3000 2000
1000
1000 0 1980 1986 Source: IMF, IIF
1992
1998
2004
0 1980 1986 Source: IMF, IIF
1992
1998
2004
2
GDP and structure of economy China & India: GDP based on PPP as % of world total in 2004 USA 21%
Others 38%
Japan 7%
Euro area 15% China 13%
India 6%
Source: IMF
China: Composition of GDP
India: Composition of GDP
2003
2003
1990 53%
22%
42%
Services
Industry
1990
Industry 31%
56%
22%
32%
46% 32%
27%
Services
Agriculture 22%
Agriculture 15% Source: DBR
Source: DBR
China & India: Gross domestic savings % of GDP China
India
China & India: Gross domestic investment 55 50
% of GDP China
India
45
45
40
40
35
35
30
30
25
25
20
20
15
15 10
10
5
5
0 1990 1992 1994 1996 1998 2000 2002 2004 Source: IIF
50
0 1990 1992 1994 1996
1998 2000
2002 2004
Source: IIF
3
External sector China & India: Export of goods & services as % of world total in 2004 USA 10%
Japan 6%
Other 46%
Euro area 31% India 1%
Source: IMF
China 6%
China & India: Exports of goods
China & India: Total merchandise trade as % of GDP
as % of GDP
80
35
70 India
China
India
China
60
30
50
25
40
20
30
15
20
10
10
5 0
0 1990 2004 Source: Reserve Bank of India, CEIC
1990 2004 Source: Reserve Bank of India, CEIC
China & India: Merchandise exports
China & India: Merchandise imports
USD bn
USD bn
700 600
China
India
40
600 500
China
500
India 400
400 300
300 200
200
100
100 0 1978
1982
Source: IIF
1986
1990
1994
1998
2002
0 1978
1982
1986
1990
1994
1998
2002
Source: IIF
4
External sector China: Top 5 export partners in 2004, as % of total exports South Korea 5.7%
China: Top 5 export partners in 1994, as % of total exports
Germ any 4.9%
Japan 20.6%
Japan 15.2%
2004
USA 25.8%
1994
Hong Kong 20.9%
South Korea 4.2%
Germ any 4.6%
Source: CEIC
Source: CEIC
India: Top 5 export partners in 2003, as % of total exports
United Kingdom 4.8% Hong Kong 5.1%
USA 20.5%
Hong Kong 31.1%
India: Top 5 export partners in 1994, as % of total exports
China 4.7%
United Kingdom 6.4% USA 18.1%
2003
Hong Kong 5.8%
USA 19.1%
1994 Germ any 6.6%
United Arab Em irates 8.0%
Japan 7.7% Source: Reserve Bank of India
Source: Reserve Bank of India
China: Key export products
India: Key export products
% of total exports 2000 2004
% of total exports
15
2000 2004
25 20
10
15 10
5 5
0 Clothing & garments Source: EIU
Electrical machinery & equipment
Yarn & textiles
0 Non-metallic mineral manuf.
Clothing
Textile, yarn, fabric
Source: EIU
5
External sector China: Top 5 import partners in 2004, as % of total imports
China: Top 5 import partners in 1994, as % of total imports
Taiw an 11.5%
Hong Kong 8.2%
Taiw an 12.2%
USA 8.0%
USA 12.1%
EU 12.3%
1994
2004 Japan 16.8%
Japan 22.8%
South Korea 11.1%
EU 14.7%
Source: CEIC
Source: CEIC
India: Top 5 import partners in 2003, as % of total imports
India: Top 5 import partners in 1994, as % of total imports
United Kingdom 4.1% Sw itzerland 4.3%
United Kingdom 5.4%
USA 6.3%
2003
Source: Reserve Bank of India
Germ any 7.6%
Source: Reserve Bank of India
China: Key import products
India: Key import products
% of total imports
2000
1994
Japan 7.1%
China 5.3%
Belgium 5.1%
USA 10.1%
Saudi Arabia 5.5%
% of total imports
25
2000
2004
2004 20
40
15
30
10
20
5
10
0 Electrical machinery Source: EIU
50
Crude oil & products
Yarn & textiles
0 Basic manufactures Source: EIU
Mineral fuels
Machines & transport equipment
6
External sector China: Trade balance
India: Trade balance 2
60
15 USD bn (right)
5 USD bn (right)
% of GDP (left)
50
1
0
40
0
-5
-1
-10
-2
-15
0
-3
-20
-10
-4
-25
-20 2004
-5
% of GDP (left) 10
30 5
20 10
0
-5 1980 1984 Source: IIF
1988 1992 1996 2000
China: Current account balance 10
USD bn (right)
-30
1980 1984 Source: IIF
1988
1992
1996
2000
2004
India: Current account balance
% of GDP (left)
8
80
4
70
3
60
6
50
USD bn (right)
12
% of GDP (left)
10 8
2
6 4
4
40
1
2
30
0
0
20
-1
-2
-2
-4
10
-2
0
-4
1988
1992
1996
2000
-6 -8
-4
-20
1980 1984 Source: IIF
0
-3
-10
-6
2
-10 1980
2004
1984
1988
1992
1996
2000
2004
Source: IIF
China & India: FX reserves USD bn China
India
800 700 600 500 400 300 200 100
Jun-05
May-05
Apr-05
Mar-05
Feb-05
Jan-05
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
Source: CEIC
7
External sector China: Oil imports 40
India: Oil imports 12
USD bn (left) % of total imports (right)
35
10
30 8
25
40
35 USD bn (left) 30
35
% of total imports (right)
30
25
25
20
20
20
6
15
15
4
10 5 0 1994
1997
2000
2
5
0
0
2003
250
USD bn (right) % of GDP (left)
40
2000
2003
15
140
USD bn (right) % of GDP (left)
35 200
150
120
30
100
25
80
20 100
10 50
5
60
15
40
10
20
5 0
0 1980 1984 Source: IIF
1988
1992
1996
2000
2004
USD bn (right) as % of reserves (left)
150
50
0 1988
1992
1996
2000
2004
India: Short-term debt 80
400
18 USD bn (right)
70 60
as % of reserves (left)
12 10
200
8
30 20
6 100
4
10 0 1990 1992 1994 1996 1998 2000 2002 Source: IIF
0
16 14
300
50 40
100
0 1980 1984 Source: IIF
China: Short-term debt
200
0 1997
India: External debt
20
250
5
Source: Reserve Bank of India
China: External debt
25
10
1994
Source: CEIC
30
15
10
2 0
0 1990 1992 1994 1996 1998 2000 2002 2004 Source: IIF
8
FDI inflows China: Net FDI inflows 240
India: Net FDI inflows
USD bn (right) % yoy (left)
210 180
60
150
50
120
40
150 120
USD bn (right) % yoy (left)
7 6
90
5
60
4
30
3
0
2
-30
1
30
90
20
60 30
10
0
0
-30 1990 1992 1994 1996 1998 2000 2002 2004 Source: DBR
0 1990 1992 1994 1996 1998 2000 2002
Source: Reserve Bank of India
China: Top 5 sources of FDI in 2003, in % of total utilised FDI
Japan 14.2%
Hong Kong 50.2%
-60
2003
South Korea 12.7%
China: Top 5 sources of FDI in 1994, in % of total utilised FDI
Hong Kong 67.5%
1994
EU-15 11.1%
Taiw an 11.5% USA 8.5%
EU-15 Japan 5.3% 7.1%
USA 11.8% Source: CEIC
Source: CEIC
India: Top 5 sources of FDI in 2004, in % of actual flows
India: Top 5 sources of FDI in 1994, in % of actual flows
USA 16.6%
Mauritius 58.9%
2004
USA 55.4%
Singapore United 9.6% Arab Em irates United 9.5% Kingdom 5.4% Source: CEIC
United Kingdom 20.6%
1994 Germ any 9.0% Mauritius 8.5% Japan 6.4%
Source: CEIC
9
Fiscal accounts China: Fiscal balance & total public sector debt 30
% of GDP
% of GDP
India: Fiscal balance & total public sector debt -5
25
-4
20
-3
90
% of GDP
-12
80
-10
70 60
-8
50
15 -2
10
-6
40 30
-1
5
-4
20
-2
10
0
0 1998
2000
2002
0
2004
0 1998
2000
2002
2004
Total public sector debt (left) General gov't fiscal balance (right)
Total public sector debt (left) Central gov't fiscal balance (right)
Source: DBR, Reserve Bank of India
Source: DBR
China: Central government revenues & expenditures 25
% of GDP
% of GDP
India: Central government revenues & expenditures
% of GDP
20
25
16
% of GDP
% of GDP
16
20
15
15
10
10
5
5
0
0
12
12
8
8
4
4
0
1990 1992 1994 1996 1998 2000 2002 2004
0 1990 1992 1994 1996 1998 2000 2002 2004
Central gov't expenditures (left) Central gov't revenues (right)
Central gov't expenditures (left) Central gov't revenues (right)
Source: DBR
Source: DBR, Reserve Bank of India
China & India: Interest payments as % of general government revenues 40
7 6
30
5 4
20 3 China (left)
India (right)
2
10
1 0
0 1997 Source: Moody's
1998
1999
2000
2001
2002
2003
2004
10
Monetary sector and prices China: Monetary sector (M2) 30000
India: Monetary sector (M3) 200
RMB bn (left) % of GDP (right)
25000
160
80
INR bn (left)
180
20000
% of GDP (right)
20000
70
140 120
15000
100
10000
15000
60
10000
50
5000
40
80 60
5000 0 1980
25000
40 1984 1988 1992
1996 2000
20 2004
0
30 1980
1984
1988
1992
Source: DBR
Source: Reserve Bank of India, DBR
China: Domestic credit
India: Domestic credit
3
180 RMB tr (left) % of GDP (right) 150
0.5
1996
2000
2004
65
INR tr (left) % of GDP (right)
0.4
60
2 0.3
55
0.2
50
0.1
45
120 1 90
0
60
0
1990 1992 1994 1996 1998 2000 2002 2004
40 1990 1992 1994 1996 1998 2000 2002 2004
Source: IFS
Source: IFS
China & India: Annual inflation
China & India: Recent inflation trend % yoy
India: WPI, aop China: CPI, aop
% yoy
25 China CPI
India WPI
20
10 8
15 6
10 4
5 2
0
0
-5 1990 1992 1994 1996 1998 2000 2002 2004 Source: DBR
2004
2005
Source: Bloomberg
11
Exchange rates & interest rates China: Exchange rate (nominal & REER*) 350
inverted scale
Index, 2000=100
300
India: Exchange rate (nominal & REER*) 0
RMB/USD, aop (right) REER (left)
250
2
300
Index, 2000=100
inverted scale
0
250
10
200
200
4
150
6
20 150
100 8
50 0
10
30 100 50
40
RMB/USD, aop (right) REER (left)
0
50
1980 1983 1986 1989 1992 1995 1998 2001 2004 * a low er value indicates depreciation Source: IIF
1980 1983 1986 1989 1992 1995 1998 2001 2004 * a low er value indicates depreciation Source: IIF
China: Base lending rate*
India: RBI Bank Rate %
% 6.0
8.5 8.0 7.5
5.5
7.0 6.5 6.0
* 12 month w orking capital 5.0 2000
2001
2002
2003
2004
2005
5.5 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Apr-05
Source: CMABB
Source: Reserve Bank of India
China: 7-year generic government bond yield %
India: 10-year government bond yield %
6
8
5
7 4
6 3
2 Feb 03
Jun 03
Source: Bloomberg
Dec 03
Apr 04
Sep 04
Jun 05
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
5 Jul-05
Source: Bloomberg
12
Banking sector & financial markets China & India: Bank return on assets
China & India: NPL ratios % of total loans China
2002
35
India 30
India China
25 20
2001
15 10
2000
5 0
0 Source: IMF
0.5
1
2000 Source: IMF
China: Stock market
2001
2002
2003
2004
India: Stock market
2600
300 250
2100
8000
BSE National Index, eop Mumbai SENSEX 30 Index, eop
7000 6000
200 1600
5000
150
4000
1100 100 600
100 2000
Shanghai B-Share Index, eop (right) Shanghai A-Share Index, eop (left) 2001
2002
2003
2004
3000
50
2000 1000
0 2000
2005
Source: Bloomberg
2002
2003
2004
2005
Source: Bloomberg
China & India: Bond issuance
China & India: Price earnings ratios* USD bn
China
2001
5
35
India
China
4
India
30 25 20
3
15 10
2
5 1
0 2000 Source: IMF
2001
2002
2003
2004
0 2000 2001 2002 2003 2004 *China: Shenzhen A-Share Index; India: Mumbai SENSEX 30 Index Source: IMF
13
Population & labour force Population: CN, IN, DE, US
China & India: Urban population
millions of people CN
IN
DE
1400
US 1200
28
India 2003
1000
39
China
800 600 400
26 1990 27
200
as % of total
0 1960 1970 Source: UN, DBR
1980
1990
2005 E
0 10 20 30 40 Source: World Development Indicators, 2005
Workforce, ages 15 - 64: CN, IN, DE, US millions of people CN
IN
DE
50
China & India: Labour force participation* 1000
US
India 800
71
2003 87
China 600
400
72 1990 89
200
0 1960 1970 Source: UN, DBR
1980
1990
20
40
60
80
100
as % of total population, ages 15-64
2005 E
Source: DBR, World Development Indicators,
China & India: Female labour force participation
India
% 0
China & India: Skilled labour & engineers
2003 China
8.94
India
Qualified engineering
45
China
4.129
79
7.8 Skilled labor 4.8
42 1990 80 as % of total 0 20 40 60 Source: World Development Indicators, 2005
80
0
2
4
6
8
10
*) Data are based on response from Institute for Management & Development's annual Executive Opinion Survey. High score equals high availability of skilled labour and qualified engineers.
14
Social indicators China & India: Average life expectancy
India
China & India: Infant mortality*
India
63
63
2003
2003 China
China
71
30
84 59
1990
1990
38 69 years
0 20 40 60 Source: World Development Indicators, 2005
80
0
20
40
60
80
100
* per 1000 live births Source: World Development Indicators, 2005
China & India: Health expenditure in 2001
China & India: Gini coefficient
5
Health expenditure, % of GDP
5.5
33
India 2003
Health expenditure per capita in USD
India
China
24
44.7
49.0
China
0 10 20 30 40 Source: World Development Indicators, 2004
50
60
0
10
20
30
40
50
Source: World Development Indicators, 2005
China & India: Adult literacy*
China & India: Tertiary enrolment rate %
68
India
India
2003
11
2003
China
China
95
62
13
6
1990
1990
87
0
20
40
60
80
3
100
0
5
10
15
* % ages 15 or older Source: World Development Indicators, 2005
Source: World Development Indicators, 2005
15
Infrastructure China & India: Fixed-line vs. mobile phones per 1000 people in 2003
China & India: Internet users per 1000 people in 2003
25 Mobile phones 215
China
0
63
209
40
80
120
160
200
240
Source: World Development Indicators, 2005
China & India: PCs per 1000 people in 2003
India
17
China
46
India
Telephone mainlines
India
0 20 40 60 Source: World Development Indicators, 2005
China & India: Aircraft departures in 2003
India
7
China
28
80
264
946
China
in thousands 0 5 10 15 20 25 Source: World Development Indicators, 2005
30
China & India: Roads network in 2001 India Paved roads, %
91
3
Total road netw ork, millions of km
Transmission & distribution losses, % of output
27
7
India
Consumption per capita, kw h
2
0
20
40
60
Source: World Development Indicators, 2004
80
1000
China & India: Electric power in 2001
46
China
0 200 400 600 800 Source: World Development Indicators, 2005
100
365
China
0
200
893
400
600
800
1000
Source: World Development Indicators, 2004
16
Business environment & investment climate China & India: Obstacles in doing business indicators
China & India: Governance indicators*
India
Control of corruption
India
Employment law index*
China
China
Rule of law Procedures to enforce a contract
Regulatory effectiveness
Government effectiveness
Days to start a business
Political stability Number of start-up procedures
Voice and accountability 0
1
2
3
4
*) The six governance indicators are measured in units ranging from about -2.5 to 2.5, with higher values corresponding to better governance outcomes. Data have been rescaled to 0-5.
Source: World Bank Governance Index 2002
0
20
40
60
80
100
*) Higher score = more rigid labour laws
Source: World Development Indicators, 2004
17
China & India
October 10, 2005
A visual essay The China-India chartbook is a visual essay to depict key similarities and differences between these two emerging economies, which are poised to change the global economic landscape. China’s GDP per capita is now 2.2 times higher than India’s (in USD PPP terms). Until the early 1990s, GDP per capita in China and India was at comparable levels, but China adopted wide-ranging economic reform one decade earlier than India. The Chinese economy is much more integrated with the world economy through international trade and investment, which helps to explain its stronger rate of GDP growth during most of the past 3 decades. For its economic development, China has relied on industry and India on services. China’s ratios of domestic savings and investment to GDP are roughly double those of India’s.
Editors: J. A.-Mund / N. Brandt / S. Hansakul, Frankfurt
+49 69 910-31745
Both economies currently enjoy strong external positions, with ample foreign exchange reserves. Higher oil prices are not likely to have a significant adverse impact on external liquidity. China and India have low external debt as a percentage of GDP, and the ratio of short-term external debt to foreign reserves is low. Despite declining fiscal deficits, the level of public sector debt is a cause for concern, especially in India. In particular, interest payments as a percentage of general government revenue are very high in India, making the prospect of fiscal consolidation more remote. Excess domestic liquidity presents a bigger challenge to China than India. M2 in China is heading toward 200% of GDP with domestic credit almost 170% of GDP. This explains the rapid rise in CPI inflation during 2004, on which the Chinese authorities are still keeping a tight rein. Surveys indicate India has better corporate governance standards and its companies are more commercially-driven. This explains why, despite China’s superior economic growth and macroeconomic stability, India’s rate of return on assets has been much higher, non-performing loans in the banking sector lower, and stock market performance much better. Social indicators reflect generally improving living conditions for the average Chinese. China also enjoys superior physical infrastructure, although India’s availability of skilled workers, especially engineers, is much better regarded. China’s early steps to liberalise its economy and invest heavily to modernise its physical infrastructure gave it a substantial edge over India in terms of income per capita levels. They also made China a more attractive destination to foreign investors. However, although India started economic reforms only a decade later than China, it is far more advanced in its institutional infrastructure and corporate governance. This is reflected in contrasting outcomes: foreign direct investment is considerably lower than in China, but returns on investment are better on average. The key to unlock India’s potential to rival China as an FDI destination is a decisive effort by the Indian authorities to push ahead with reforms.
1
GDP China & India: Real GDP growth
China & India: Nominal GDP
% change, yoy
USD bn
18 15
1600 India
12
China
China 1300
9
1000
6 3
India
1900
700
0
400
-3 -6 1978 1982 Source: IIF
1986
1990
1994
1998
2002
1986
1990
1994
1998
2002
China & India: GDP per capita (PPP)
China & India: GDP per capita (nominal) USD
100 1978 1982 Source: IIF
USD
1500 1300
India
6000
China
India
China
1100
5000
900
4000
700
3000
500
2000
300
1000
100 1978 1982 Source: IIF
1986
1990
1994
1998
7000
2002
0 1980
1984
1988
1992
1996
2000
2004
Source: IMF
China: Nominal GDP vs. GDP based on PPP USD bn
GDP based on PPP
8000 7000
nom GDP
India: Nominal GDP vs. GDP based on PPP USD bn GDP based on PPP
4000
nom GDP
6000
3000
5000 4000
2000
3000 2000
1000
1000 0 1980 1986 Source: IMF, IIF
1992
1998
2004
0 1980 1986 Source: IMF, IIF
1992
1998
2004
2
GDP and structure of economy China & India: GDP based on PPP as % of world total in 2004 USA 21%
Others 38%
Japan 7%
Euro area 15% China 13%
India 6%
Source: IMF
China: Composition of GDP
India: Composition of GDP
2003
2003
1990 53%
22%
42%
Services
Industry
1990
Industry 31%
56%
22%
32%
46% 32%
27%
Services
Agriculture 22%
Agriculture 15% Source: DBR
Source: DBR
China & India: Gross domestic savings % of GDP China
India
China & India: Gross domestic investment 55 50
% of GDP China
India
45
45
40
40
35
35
30
30
25
25
20
20
15
15 10
10
5
5
0 1990 1992 1994 1996 1998 2000 2002 2004 Source: IIF
50
0 1990 1992 1994 1996
1998 2000
2002 2004
Source: IIF
3
External sector China & India: Export of goods & services as % of world total in 2004 USA 10%
Japan 6%
Other 46%
Euro area 31% India 1%
Source: IMF
China 6%
China & India: Exports of goods
China & India: Total merchandise trade as % of GDP
as % of GDP
80
35
70 India
China
India
China
60
30
50
25
40
20
30
15
20
10
10
5 0
0 1990 2004 Source: Reserve Bank of India, CEIC
1990 2004 Source: Reserve Bank of India, CEIC
China & India: Merchandise exports
China & India: Merchandise imports
USD bn
USD bn
700 600
China
India
40
600 500
China
500
India 400
400 300
300 200
200
100
100 0 1978
1982
Source: IIF
1986
1990
1994
1998
2002
0 1978
1982
1986
1990
1994
1998
2002
Source: IIF
4
External sector China: Top 5 export partners in 2004, as % of total exports South Korea 5.7%
China: Top 5 export partners in 1994, as % of total exports
Germ any 4.9%
Japan 20.6%
Japan 15.2%
2004
USA 25.8%
1994
Hong Kong 20.9%
South Korea 4.2%
Germ any 4.6%
Source: CEIC
Source: CEIC
India: Top 5 export partners in 2003, as % of total exports
United Kingdom 4.8% Hong Kong 5.1%
USA 20.5%
Hong Kong 31.1%
India: Top 5 export partners in 1994, as % of total exports
China 4.7%
United Kingdom 6.4% USA 18.1%
2003
Hong Kong 5.8%
USA 19.1%
1994 Germ any 6.6%
United Arab Em irates 8.0%
Japan 7.7% Source: Reserve Bank of India
Source: Reserve Bank of India
China: Key export products
India: Key export products
% of total exports 2000 2004
% of total exports
15
2000 2004
25 20
10
15 10
5 5
0 Clothing & garments Source: EIU
Electrical machinery & equipment
Yarn & textiles
0 Non-metallic mineral manuf.
Clothing
Textile, yarn, fabric
Source: EIU
5
External sector China: Top 5 import partners in 2004, as % of total imports
China: Top 5 import partners in 1994, as % of total imports
Taiw an 11.5%
Hong Kong 8.2%
Taiw an 12.2%
USA 8.0%
USA 12.1%
EU 12.3%
1994
2004 Japan 16.8%
Japan 22.8%
South Korea 11.1%
EU 14.7%
Source: CEIC
Source: CEIC
India: Top 5 import partners in 2003, as % of total imports
India: Top 5 import partners in 1994, as % of total imports
United Kingdom 4.1% Sw itzerland 4.3%
United Kingdom 5.4%
USA 6.3%
2003
Source: Reserve Bank of India
Germ any 7.6%
Source: Reserve Bank of India
China: Key import products
India: Key import products
% of total imports
2000
1994
Japan 7.1%
China 5.3%
Belgium 5.1%
USA 10.1%
Saudi Arabia 5.5%
% of total imports
25
2000
2004
2004 20
40
15
30
10
20
5
10
0 Electrical machinery Source: EIU
50
Crude oil & products
Yarn & textiles
0 Basic manufactures Source: EIU
Mineral fuels
Machines & transport equipment
6
External sector China: Trade balance
India: Trade balance 2
60
15 USD bn (right)
5 USD bn (right)
% of GDP (left)
50
1
0
40
0
-5
-1
-10
-2
-15
0
-3
-20
-10
-4
-25
-20 2004
-5
% of GDP (left) 10
30 5
20 10
0
-5 1980 1984 Source: IIF
1988 1992 1996 2000
China: Current account balance 10
USD bn (right)
-30
1980 1984 Source: IIF
1988
1992
1996
2000
2004
India: Current account balance
% of GDP (left)
8
80
4
70
3
60
6
50
USD bn (right)
12
% of GDP (left)
10 8
2
6 4
4
40
1
2
30
0
0
20
-1
-2
-2
-4
10
-2
0
-4
1988
1992
1996
2000
-6 -8
-4
-20
1980 1984 Source: IIF
0
-3
-10
-6
2
-10 1980
2004
1984
1988
1992
1996
2000
2004
Source: IIF
China & India: FX reserves USD bn China
India
800 700 600 500 400 300 200 100
Jun-05
May-05
Apr-05
Mar-05
Feb-05
Jan-05
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
Source: CEIC
7
External sector China: Oil imports 40
India: Oil imports 12
USD bn (left) % of total imports (right)
35
10
30 8
25
40
35 USD bn (left) 30
35
% of total imports (right)
30
25
25
20
20
20
6
15
15
4
10 5 0 1994
1997
2000
2
5
0
0
2003
250
USD bn (right) % of GDP (left)
40
2000
2003
15
140
USD bn (right) % of GDP (left)
35 200
150
120
30
100
25
80
20 100
10 50
5
60
15
40
10
20
5 0
0 1980 1984 Source: IIF
1988
1992
1996
2000
2004
USD bn (right) as % of reserves (left)
150
50
0 1988
1992
1996
2000
2004
India: Short-term debt 80
400
18 USD bn (right)
70 60
as % of reserves (left)
12 10
200
8
30 20
6 100
4
10 0 1990 1992 1994 1996 1998 2000 2002 Source: IIF
0
16 14
300
50 40
100
0 1980 1984 Source: IIF
China: Short-term debt
200
0 1997
India: External debt
20
250
5
Source: Reserve Bank of India
China: External debt
25
10
1994
Source: CEIC
30
15
10
2 0
0 1990 1992 1994 1996 1998 2000 2002 2004 Source: IIF
8
FDI inflows China: Net FDI inflows 240
India: Net FDI inflows
USD bn (right) % yoy (left)
210 180
60
150
50
120
40
150 120
USD bn (right) % yoy (left)
7 6
90
5
60
4
30
3
0
2
-30
1
30
90
20
60 30
10
0
0
-30 1990 1992 1994 1996 1998 2000 2002 2004 Source: DBR
0 1990 1992 1994 1996 1998 2000 2002
Source: Reserve Bank of India
China: Top 5 sources of FDI in 2003, in % of total utilised FDI
Japan 14.2%
Hong Kong 50.2%
-60
2003
South Korea 12.7%
China: Top 5 sources of FDI in 1994, in % of total utilised FDI
Hong Kong 67.5%
1994
EU-15 11.1%
Taiw an 11.5% USA 8.5%
EU-15 Japan 5.3% 7.1%
USA 11.8% Source: CEIC
Source: CEIC
India: Top 5 sources of FDI in 2004, in % of actual flows
India: Top 5 sources of FDI in 1994, in % of actual flows
USA 16.6%
Mauritius 58.9%
2004
USA 55.4%
Singapore United 9.6% Arab Em irates United 9.5% Kingdom 5.4% Source: CEIC
United Kingdom 20.6%
1994 Germ any 9.0% Mauritius 8.5% Japan 6.4%
Source: CEIC
9
Fiscal accounts China: Fiscal balance & total public sector debt 30
% of GDP
% of GDP
India: Fiscal balance & total public sector debt -5
25
-4
20
-3
90
% of GDP
-12
80
-10
70 60
-8
50
15 -2
10
-6
40 30
-1
5
-4
20
-2
10
0
0 1998
2000
2002
0
2004
0 1998
2000
2002
2004
Total public sector debt (left) General gov't fiscal balance (right)
Total public sector debt (left) Central gov't fiscal balance (right)
Source: DBR, Reserve Bank of India
Source: DBR
China: Central government revenues & expenditures 25
% of GDP
% of GDP
India: Central government revenues & expenditures
% of GDP
20
25
16
% of GDP
% of GDP
16
20
15
15
10
10
5
5
0
0
12
12
8
8
4
4
0
1990 1992 1994 1996 1998 2000 2002 2004
0 1990 1992 1994 1996 1998 2000 2002 2004
Central gov't expenditures (left) Central gov't revenues (right)
Central gov't expenditures (left) Central gov't revenues (right)
Source: DBR
Source: DBR, Reserve Bank of India
China & India: Interest payments as % of general government revenues 40
7 6
30
5 4
20 3 China (left)
India (right)
2
10
1 0
0 1997 Source: Moody's
1998
1999
2000
2001
2002
2003
2004
10
Monetary sector and prices China: Monetary sector (M2) 30000
India: Monetary sector (M3) 200
RMB bn (left) % of GDP (right)
25000
160
80
INR bn (left)
180
20000
% of GDP (right)
20000
70
140 120
15000
100
10000
15000
60
10000
50
5000
40
80 60
5000 0 1980
25000
40 1984 1988 1992
1996 2000
20 2004
0
30 1980
1984
1988
1992
Source: DBR
Source: Reserve Bank of India, DBR
China: Domestic credit
India: Domestic credit
3
180 RMB tr (left) % of GDP (right) 150
0.5
1996
2000
2004
65
INR tr (left) % of GDP (right)
0.4
60
2 0.3
55
0.2
50
0.1
45
120 1 90
0
60
0
1990 1992 1994 1996 1998 2000 2002 2004
40 1990 1992 1994 1996 1998 2000 2002 2004
Source: IFS
Source: IFS
China & India: Annual inflation
China & India: Recent inflation trend % yoy
India: WPI, aop China: CPI, aop
% yoy
25 China CPI
India WPI
20
10 8
15 6
10 4
5 2
0
0
-5 1990 1992 1994 1996 1998 2000 2002 2004 Source: DBR
2004
2005
Source: Bloomberg
11
Exchange rates & interest rates China: Exchange rate (nominal & REER*) 350
inverted scale
Index, 2000=100
300
India: Exchange rate (nominal & REER*) 0
RMB/USD, aop (right) REER (left)
250
2
300
Index, 2000=100
inverted scale
0
250
10
200
200
4
150
6
20 150
100 8
50 0
10
30 100 50
40
RMB/USD, aop (right) REER (left)
0
50
1980 1983 1986 1989 1992 1995 1998 2001 2004 * a low er value indicates depreciation Source: IIF
1980 1983 1986 1989 1992 1995 1998 2001 2004 * a low er value indicates depreciation Source: IIF
China: Base lending rate*
India: RBI Bank Rate %
% 6.0
8.5 8.0 7.5
5.5
7.0 6.5 6.0
* 12 month w orking capital 5.0 2000
2001
2002
2003
2004
2005
5.5 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Apr-05
Source: CMABB
Source: Reserve Bank of India
China: 7-year generic government bond yield %
India: 10-year government bond yield %
6
8
5
7 4
6 3
2 Feb 03
Jun 03
Source: Bloomberg
Dec 03
Apr 04
Sep 04
Jun 05
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
5 Jul-05
Source: Bloomberg
12
Banking sector & financial markets China & India: Bank return on assets
China & India: NPL ratios % of total loans China
2002
35
India 30
India China
25 20
2001
15 10
2000
5 0
0 Source: IMF
0.5
1
2000 Source: IMF
China: Stock market
2001
2002
2003
2004
India: Stock market
2600
300 250
2100
8000
BSE National Index, eop Mumbai SENSEX 30 Index, eop
7000 6000
200 1600
5000
150
4000
1100 100 600
100 2000
Shanghai B-Share Index, eop (right) Shanghai A-Share Index, eop (left) 2001
2002
2003
2004
3000
50
2000 1000
0 2000
2005
Source: Bloomberg
2002
2003
2004
2005
Source: Bloomberg
China & India: Bond issuance
China & India: Price earnings ratios* USD bn
China
2001
5
35
India
China
4
India
30 25 20
3
15 10
2
5 1
0 2000 Source: IMF
2001
2002
2003
2004
0 2000 2001 2002 2003 2004 *China: Shenzhen A-Share Index; India: Mumbai SENSEX 30 Index Source: IMF
13
Population & labour force Population: CN, IN, DE, US
China & India: Urban population
millions of people CN
IN
DE
1400
US 1200
28
India 2003
1000
39
China
800 600 400
26 1990 27
200
as % of total
0 1960 1970 Source: UN, DBR
1980
1990
2005 E
0 10 20 30 40 Source: World Development Indicators, 2005
Workforce, ages 15 - 64: CN, IN, DE, US millions of people CN
IN
DE
50
China & India: Labour force participation* 1000
US
India 800
71
2003 87
China 600
400
72 1990 89
200
0 1960 1970 Source: UN, DBR
1980
1990
20
40
60
80
100
as % of total population, ages 15-64
2005 E
Source: DBR, World Development Indicators,
China & India: Female labour force participation
India
% 0
China & India: Skilled labour & engineers
2003 China
8.94
India
Qualified engineering
45
China
4.129
79
7.8 Skilled labor 4.8
42 1990 80 as % of total 0 20 40 60 Source: World Development Indicators, 2005
80
0
2
4
6
8
10
*) Data are based on response from Institute for Management & Development's annual Executive Opinion Survey. High score equals high availability of skilled labour and qualified engineers.
14
Social indicators China & India: Average life expectancy
India
China & India: Infant mortality*
India
63
63
2003
2003 China
China
71
30
84 59
1990
1990
38 69 years
0 20 40 60 Source: World Development Indicators, 2005
80
0
20
40
60
80
100
* per 1000 live births Source: World Development Indicators, 2005
China & India: Health expenditure in 2001
China & India: Gini coefficient
5
Health expenditure, % of GDP
5.5
33
India 2003
Health expenditure per capita in USD
India
China
24
44.7
49.0
China
0 10 20 30 40 Source: World Development Indicators, 2004
50
60
0
10
20
30
40
50
Source: World Development Indicators, 2005
China & India: Adult literacy*
China & India: Tertiary enrolment rate %
68
India
India
2003
11
2003
China
China
95
62
13
6
1990
1990
87
0
20
40
60
80
3
100
0
5
10
15
* % ages 15 or older Source: World Development Indicators, 2005
Source: World Development Indicators, 2005
15
Infrastructure China & India: Fixed-line vs. mobile phones per 1000 people in 2003
China & India: Internet users per 1000 people in 2003
25 Mobile phones 215
China
0
63
209
40
80
120
160
200
240
Source: World Development Indicators, 2005
China & India: PCs per 1000 people in 2003
India
17
China
46
India
Telephone mainlines
India
0 20 40 60 Source: World Development Indicators, 2005
China & India: Aircraft departures in 2003
India
7
China
28
80
264
946
China
in thousands 0 5 10 15 20 25 Source: World Development Indicators, 2005
30
China & India: Roads network in 2001 India Paved roads, %
91
3
Total road netw ork, millions of km
Transmission & distribution losses, % of output
27
7
India
Consumption per capita, kw h
2
0
20
40
60
Source: World Development Indicators, 2004
80
1000
China & India: Electric power in 2001
46
China
0 200 400 600 800 Source: World Development Indicators, 2005
100
365
China
0
200
893
400
600
800
1000
Source: World Development Indicators, 2004
16
Business environment & investment climate China & India: Obstacles in doing business indicators
China & India: Governance indicators*
India
Control of corruption
India
Employment law index*
China
China
Rule of law Procedures to enforce a contract
Regulatory effectiveness
Government effectiveness
Days to start a business
Political stability Number of start-up procedures
Voice and accountability 0
1
2
3
4
*) The six governance indicators are measured in units ranging from about -2.5 to 2.5, with higher values corresponding to better governance outcomes. Data have been rescaled to 0-5.
Source: World Bank Governance Index 2002
0
20
40
60
80
100
*) Higher score = more rigid labour laws
Source: World Development Indicators, 2004
17
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