PRESENTED BY: SRIKANTH SANDIP SATISH MURALI VAMSHI

Market Foreign

based system

trade and foreign investment as integral part if Indian economy

Fastest

growing economy largest labor force

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Worlds second

Centrally planned Private businesses

Economy and capitalism were

suppressed
Privatization of Promotion of Flourishing

Farmland

foreign investment

small scale entrepreneurs

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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?

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)

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)
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Indicators Political System Speed of Growth

India
Multi-party Democracy Economic reforms started in 1991. Average 6% growth rate in past two decades. Rising power in software, design, services, and precision industry.

China
One-party authoritarian rule Economic reforms started in 1978. Average 9.5% growth rate in past two decades. Dominant in mass manufacturing, electronics and heavy industrial plants
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Areas of Specialization

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%

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

AGRICULTURE SECTOR

India is an agricultural country. Growth of service sector is pushing down the contribution of agriculture. y Contributing 17.2% of the GDP. y Largely depends on monsoon. y Provides employment to two-thirds of the total population. y 15% of export earnings y Rural women play a vital role, 50% of rural labor force. y Yields per hectare of crops in India are very low
y y
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Agriculture accounted for 10.6 % of the GDP y 33o million- over 45% of labor force still makes living from farming. y Farming methods have been improved in China. y China produces wheat, rice, potatoes, peanuts, millet, cotton. y Only 15 percent of the total land available in China can be cultivated. y more than 75 percent of the total cultivated land is used for producing food crops.
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Increases in Output of Major Agricultural Products (10,000 tons)

Variety grain cotton oil-bearing crops 1949 11,318 44.4 256.4 1978 30,477 216.7 521.8 2005 50,839 383.1 2,601.2

sugarcane sugarbeet flue-cured tobacco tea fruit meat aquatic products

264.2 19.1 4.3

2,111.6 270.2 105.2

7,470 864 218.5

4.1 120.0 220.0 45

26.8 657.0 856.3 466

67.6 6,237.6 5,960.9 4,122 11

INDUSTRIAL SECTOR

Manufacturing contributes around 15% of GDP of the country. y According to CSO data quartely estimate of GDP for manufacturing stood at 38.1 billion US $. y According to the data the cumulative growth in manufacturing index for April-June has been 3.2%. y In the manufacturing sector the value of new project announced in 2nd half of 2008-09 stood at 13.2 billion US $.
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India ranks among top 12 producers of manufacturing value added products. y In Textile it ranks 4th after China, US & Italy. y In Electrical machinery & apparatus India ranks 5th. y India holds 6th position in basic metals category. y 7th in Chemicals & chemicals products, 10th in leather & leather products, 12th in machinery & equipment & motor vehicals.
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According to CSO the industrial output clocked an annual growth rate of 6.8% in July 2009. y 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 &
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exported to the world.

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Luxury brands like Louis Vuitton are looking at India as a manufacturing base for their products. y Skoda Auto plans to make India its regional manufacturing hub. Aircraft manufacturing Airbus is considering India as one of the centres for design & development of its long haul A350 plane. y Samsung plans to invest 100 million US $ in its manufacturing plant near Chennai & make it its global hub.
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Suzuki too is making India its manufacturing hub for its small cars. y According to Investment Commission of India the manufacturing sector is estimated to have 180 billion US $ investment opportunity over next 5 years. y Manufacturing sector is the largest employer which employes 25.5 million people of the total workforce. y Employment growth rate is 2.78%
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Chinese manufacturing sector accounts for 43% of Chinese economy. y Its economy growth in average of almost 8% every year. y Chinese manufacturing sector ranks 4th in the world after US, Japan, & Germany.
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Chinas fast growing domestic market worldwide demand for Chinese goods & the cost advantage China offers to manufacturers are fueling the growth of manufacturing sector in China. y Purchasing Managers Index (PMI) which measures manufacturing activity nationwide. y PMI index rose to 54 points in August up from 53.3 in July.
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China has 50% share of worldwide camera market. & 30% of Air conditioners . 25% of Washing Machines & 20% of Refrigerators. Chinas crude steel production rose by 28.25%. Investment in chemical industry grew by 35.9%.

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SERVICE SECTOR

CHINAS SERVICE SECTOR

 Services includes: Communications Business and legal practices Culture, research and education.

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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% Employment Opportunities : Low Most advanced service sector : Delhi with a GDP share of 77 per cent A net exporter of services

Average Annual Growth rate is 10.8%

High

Beijing with a GDP share of 61 per cent A net importer of services 21

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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.
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