Is China Threat To India?

A

IS CHINA THREAT INDIA

TO

Presented by: Abdul Hameed 01 Honey Balani 03 Manish Kamble 16 Rahul Pillai 38 Dhiraj Vinaykia 59

ECONOMY OF INDIA §Market based system §Foreign trade and foreign investment as integral part if Indian economy §Fastest growing economy §World’s second largest labor force § §

ECONOMY OF CHINA §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?

Low-pri ced er t u p m o c rs & e t n e c l l a C engineers

consume

r goods

China – Economic Fact Sheet GDP – real growth rate: 9.8% (2008) country comparison to the world: 13% (2007) 11.6% (2006) GDP-Per capita (PPP-Purchasing power parity): $6,000 (2008)country comparison to the world: $5,500 (2007) $4,900 (2006) note: data are in 2008 US dollars GDP – composition by sector: agriculture: 10.6% industry: 49.2% services: 40.2% (2008)

  

  

India – Economic Fact Sheet GDP- real growth rate:  6.6% (2008) 9% (2007)  9.6% (2006) GDP – per capita (PPP – Purchasing power parity) $2,800 (2008) $2,700 (2007) $2,500 (2006) note: data are in 2008 US dollars GDP – Composition by sector: agriculture: 17.2% industry: 29.1% services: 53.7% (2008)

Comparing India and China ’ s Growth Stories Indicators Political System

India

China

Multi-party Democracy

One-party authoritarian rule

Speed of Growth Economic reforms

Areas of Specialization

started in 1991. Average 6% growth rate in past two Rising power in decades. software, design, services, and precision industry.

Economic reforms started in 1978. Average 9.5% growth rate in past two Dominant decades. in mass manufacturing, electronics and heavy industrial plants

Comparing India and China ’ s Growth Stories Indicators Gini index (standard measure of inequality) Foreign Direct Investment Future Areas of growth

India 36.8 6.8% (up from 0.3% in 2004)

China 47.0 (up 10 points from 15 yrs ago) 17.8%

R&D, bioIT business, services technology, highand continued value IT enabled manufacturing services (legal, medical, engineering architecture), manufacturing, agrobased industry

Agriculture Sector

Indian Agriculture India is an agricultural country. Growth

of service sector is pushing down

Contributing 17.2% of the GDP. Largely depends on monsoon. Provides employment to two-thirds 15% of export earnings Rural women play a vital Yields 

of the

role, 50% of rural

per hectare of crops in India are very

13.1 : India's Imports and Exports of Agricultural Commodities vis-à-vis Total National Imports/ Exports During 1990-91 to 2007-08  

 

 

 

 

Year

Agriculture 

Total National %age Agriculture

Imports

Imports

 

 

 

(Value in Rupees  Crore)

Agriculture

Total National

%age Agriculture

Imports to Total

Exports

Exports

Exports to Total

 

 

 

 

National Imports

 

 

 

National Exports

  1

2

 

3

4

5

 

6

7

1990-91

1205.86 

43170.82

2.79 

6012.76 

32527.28

18.49 

1991-92

1478.27 

47850.84

3.09 

7838.04 

44041.81

17.80 

1992-93

2876.25 

63374.52

4.54 

9040.30 

53688.26

16.84 

1993-94

2327.33 

73101.01

3.18 

12586.55 

69748.85

18.05 

1994-95

5937.21 

89970.70

6.60 

13222.76 

82673.40

15.99 

1995-96

5890.10 

122678.14

4.80 

20397.74 

106353.35 

19.18 

1996-97 

6612.60 

138919.88

4.76 

24161.29 

118817.32 

20.33 

1997-98 

8784.19 

154176.29

5.70 

24832.45 

130100.64 

19.09 

1998-99 

14566.48 

178331.69

8.17 

25510.64 

139751.77 

18.25 

1999-00 

16066.73 

215528.53

7.45 

25313.66 

159095.20

15.91 

2000-01 

12086.23 

228306.64

5.29 

28657.37 

201356.45

14.23 

2001-02 

16256.61 

245199.72

6.63 

29728.61 

209017.97

14.22 

2002-03 

17608.83

297205.87

5.92 

34653.94

255137.28

13.58 

2003-04

21972.68

359107.66

6.12 

37266.52

293366.75

12.70 

2004-05

22811.84

501064.54

4.55 

41602.65

375339.53

11.08 

2005-06 

21499.22

660408.90 

3.26 

49216.96

456417.86

10.78 

2006-07

29637.86

840506.31

3.53 

62411.42

571779.28

10.92 

964849.76

3.09 

77769.71

640172.14

12.15 

2007-08(P) 29777.01

 

P     Provisional Source : DGCI&S, Ministry of Commerce, Kolkata. 

 

Agriculture 33o

accounted for 10.6 % of the

million- over 45% of labor force still

Farming China Only

methods have been improved in

produces wheat, rice, potatoes,

15 percent of the total land available

more  

China

than 75 percent of the total cultivated

Increases in Output of Major Agricultural Products (10,000 tons)  Variety

1949

1978

2005

grain

11,318

30,477

50,839

cotton

44.4

216.7

383.1

oil-bearing crops 256.4

521.8

2,601.2

sugarcane

264.2

2,111.6

7,470

sugarbeet

19.1

270.2

864

flue-cured tobacco 4.3

105.2

218.5

tea

4.1

26.8

67.6

fruit

120.0

657.0

6,237.6

meat

220.0

856.3

5,960.9

aquatic products

45

466

4,122

Increases in Output of Major Agricultural Products (10,000 tons)  Variety

1949

1978

2005

grain

11,318

30,477

50,839

cotton

44.4

216.7

383.1

oil-bearing crops 256.4

521.8

2,601.2

sugarcane

264.2

2,111.6

7,470

sugarbeet

19.1

270.2

864

flue-cured tobacco 4.3

105.2

218.5

tea

4.1

26.8

67.6

fruit

120.0

657.0

6,237.6

meat

220.0

856.3

5,960.9

aquatic products

45

466

4,122

INDUSTRIAL SECTOR

India ’ s Manufacturing Sector Manufacturing

contributes around 15% of GDP of the

According

to CSO data quartely estimate of GDP for

According

to the data the cumulative growth in

In





the manufacturing sector the value of new project

India ’ s Manufacturing Sector India

rank’s among top 12 producers of manufacturing

In Textile it ranks 4th after China, US & Italy. In Electrical machinery & apparatus India ranks 5th . India holds 6th position in basic metals category. 7th in Chemicals & chemicals products, 10th in leather



India ’ s Manufacturing Sector According There

to CSO the industrial output clocked an annual

are many Companies who wants to make India as their

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. 

India ’ s Manufacturing Sector Luxury Skoda

brands like Louis Vuitton are looking at India

Auto plans to make India its regional

Samsung

  

plans to invest 100 million US $ in its

India ’ s Manufacturing Sector Suzuki

too is making India its manufacturing hub for its

According

to Investment Commission of India the

Manufacturing Employment

sector is the largest employer which

growth rate is 2.78%

China ’ s Manufacturing Sector Chinese Its

economy growth in average of almost 8% every

Chinese 

manufacturing sector accounts for 43% of

manufacturing sector ranks 4th in the world

China ’ s Manufacturing Sector China’s

fast growing domestic market worldwide

Purchasing PMI

Manager’s Index (PMI) which measures

index rose to 54 points in August up from 53.3 in

China ’ s Manufacturing Sector China 

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



25% of Washing Machines & 20% of Refrigerators.  China’s crude steel production rose by 28.25%.  Investment in chemical industry grew by 35.9%. 

SERVICE SECTOR

vCan be classified into 2 types: üOld üNew v

vOld Services includes: üPetty Trading üDomestic Services üCatering and Hotel Services

vNew Services includes: üCommunications üBusiness and legal practices üCulture, research and education.

INDIA

v/s

China

INDIA

CHINA

54 per cent of GDP

Below 41 per cent of GDP

Since 1978 to 2008 : Average Annual Growth rate is 7.0% Average Annual Growth rate is 10.8% Employment Opportunities : High Low Most advanced service sector : Delhi with a GDP share of 77 per cent

Beijing with a GDP share of 61 per cent

A net exporter of services

A net importer of services

GDP shares by sector in China and India

Composition of Service Sector GDP % Service Sectors

China

India

Australia

Korea

Japan

UK

US

Finance and Insurance

16.50

13.27

11.83

15.53

9.78

6.89

10.35

Government and Social Organizations

8.01

10.78

6.06

10.47

6.72

6.62

10.35

Real Estate

6.07

11.64

29.15

22.34

30.66

32.16

30.92

Wholesale, Retail Trade and Catering

23.57

30.39

19.15

17.98

18.54

20.81

20.05

Transport, Telecommunications etc

16.96

19.18

12.11

13.09

8.91

10.00

7.89

Transport and Storage

8.76

10.86

Post and Telecommunications

8.20

8.32

Education, Health, Research etc

28.87

14.73

21.69

20.59

25.40

23.51

20.44

100

100

100

100

100

Education, Culture and 8.71 Arts Health, Sports and Social 2.96 Welfare

7.98

Scientific Research and Polytechnic

2.25

0.89

Others

14.95

3.71

Total

100

100

2.14

Service Sector Share over Total GDP

Economic Structure and Level of Development

CURRENCIES INDIA CHINA

History of Exchange rate Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

1 INR = CYN 0.1910 0.1774 0.1714 0.1723 0.1817 0.1912 0.1796 0.1764 0.1853 0.1409

% 1 USD = Change INR 43.55 (7.12) 46.75 (3.38) 48.28 0.52 48.05 5.45 45.55 5.22 43.35 (6.06) 44.92 (1.78) 44.24 5.04 39.26 (23.96) 48.41

% I USD = % Change CYN Change 8.2798 7.34 8.2773 (0.20) 7.15 8.2766 (0.20) (0.47) 8.28 0.40 (5.20) 8.2767 (0.40) (4.83) 8.2765 0.00 3.62 8.0702 (2.50) (1.51) 7.8051 (3.28) (11.08) 7.2755 (6.78) 23.30 6.8225 (6.22)

FOREX RESERVES The

forex reserves of the Republic of China

The

main factors responsible for the



Interest Rates

EFFECTIVE DATE OF CHANGE

DISCOUNT

ACCOMMODATIONS WITH COLLATERAL

ACCOMMODATIONS WITHOUT COLLATERAL

2009-02-19 2009-01-08 2008-12-12 2008-11-10 2008-10-30 2008-10-09 2008-09-26 2008-06-27 2008-03-28 2007-12-21 2007-09-21 2007-06-22 2007-03-30 2006-12-29 2006-09-29

1.25 1.500 2 2.75 3 3.25 3.5 3.625 3.5 3.375 3.25 3.125 2.875 2.75 2.625

1.625 1.875 2.375 3.125 3.375 3.625 3.875 4 3.875 3.75 3.625 3.5 3.25 3.125 3

3.5 3.750 4.25 5 5.25 5.5 5.75 5.875 5.75 5.625 5.5 5.375 5.125 5 4.875

INDIA AND CHINA IN 2020 According

to a recent report from

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THANK