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To: Ms. Swati Sharma By: Atul Upmanyu PGDM 3rd Sem
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Overview
Introduction Emerging markets compared viz: Power sector Education system Oil and gas sector Port and shipping Agriculture infrastructure Service industry Role of FDI Trade patterns Trade policies conclusion
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Introduction
India and china emerging global players: High economic growth rates Rapid raising share in world Large inflows of FDI Engines of demand growth in commodities Positive demographics
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The first is look at china with infrastructure where is China and where is India.
China and India together account for about 38.5% of world population and 7.4% of the value of world output and income at current prices and exchange rates.
If China opened up in 1978, India did so in 1991 i.e. 13 yrs after China therefore any comparison of India of today should be made with china as it was more than a decade ago as emerging global powers now.
Since the two countries have similar labor endowments and development lags due to government controls and protected nature of their economies , they can be expressed to follow similar 4/18/12 growth paths on opening up
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Much of chinas dazzling was been built in the late India is gearing up to the performance in the latter decade.
Foreign inflows into china jumped substantially in the early 1990s and those into India have jumped in the mid -2000s.
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Good education and health facilities are necessary for inclusive development they are state subjects in India and in China also, local government has the large share of the responsibility for their provision. The Chinese culture is more homogeneous and Indian culture is great diversified.
Indian greater expertise with market also shows in the financial sector, which is 4/18/12 more deeper and more robust than
GDP composition by sector: agriculture: 10.2% industry: 46.8% 4/18/12 services: 43% (2011)
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China
One-party authoritarian rule
Economic reforms Economic reforms started in 1991. started in 1978. Average 6% Average 9.5% growth rate in growth rate in past two decades. past two decades.
8.8% Foreign Direct Investment IT business, Future Areas R&D, biotechnology, high- services and of growth
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value IT enabled continued services (legal, manufacturing medical, engineering architecture), manufacturing, agro-based
Comparison
India lags behind china in infrastructure. China has a weak banking and legal system. India has the advantage of the English language which has made it easier to participate in the global economy. What holds India back are bureaucratic red tape, corruption and its inability to build infrastructure fast enough. to Peter Drucker, India has managed rural to urban transition in a relatively smooth and
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Indias 54% of population is engaged in Agriculture but only accounts for 17% of GDP
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Low penetration providing significant opportunities for future growth Over 400 million people without appropriate access to electricity
Large investment required to achieve Govt. target of per capita consumption of 1,000 KWh by 2012 Source: World Energy Outlook, 2010; Human Development Report 2009-10, Source: China 4/18/12 Electricity Council, China Power Year Book, Government of India, Ministry of Statistics & Programme Implementation
INFRASTRUCTURE * INVESTMENTS
Education system
Primary, secondary education, vocational education training in china results in 99.1% literacy rate. Where as in India it is 74 %
Adult literacy India -65% China-91% Expenditure on education India- 11.7% China -12.8%
But coming to quality education India is far more better 4/18/12 than china
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Indian imports amounted to $130.36 billion where as china is 424.59 billion. Installed port capacity in China is 5.6 btpa vis--vis Indias capacity of 0.75 btpa.
Container terminal capacity in China is 100 m teus vis--vis Indias capacity of 8.6 m teus.
The largest container vessel calling at Chinese Port is more than 13,000 teus where as at Indian container terminal (JNPT) is 6,000 teus.
The draft at Shanghai is 19+ m where as at JNPT it is 11.5m and at 4/18/12 Mundra it is 17.5 m.
Rates of investment
The investment rate in China (investment as a share of GDP) has fluctuated between 35 and 44 per cent over the past 25 years, compared to 20 to 26 per cent in India.
Infrastructure investment from the early 1990s has averaged 19 per cent of GDP in China, compared to 2 per cent in India.
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China can afford to have such a high investment rate because it has attracted so much foreign direct investment. But FDI has accounted for only 3-5 per cent of GDP in China since 1990, and at its peak was 8 per cent. In the period after 2000, FDI was only 6 per cent of domestic investment. Where as India is only 4%.
Recent inflows of capital have not added to the domestic investment rate at all, macro 4/18/12 economically speaking, but have led to the further
Structural change
China: classic pattern, moving from primary to manufacturing sector, which has doubled its share of workforce and tripled its share of output. India: Move has been mainly from agriculture to services in share of output, with no substantial increase in manufacturing, and the structure of employment has not changed much. Share of the primary sector in GDP fell from 60 per cent to 25 per cent in four decades, but share in employment still more than 60 per cent.
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Trade patterns
China: Rapid export growth involving aggressive increases on world market shares, based on relocate capital attracted by cheap labour and heavily subsidized infrastructure. India: Lower rate of export growth, with cheap labour due to low absolute wages rather than public provision and poor infrastructure development. So exports have not yet become engine of growth, except in services.
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Trade policies
China: export employment was net addition to domestic employment, since until 2002 China had undertaken much less trade liberalization than most other developing countries. India: increases in export employment were outweighed by employment losses especially in small enterprises because of import competition. lead global anti-dumping
Poverty reduction
China: Officially 4 per cent of the population now lives under the poverty line, unofficially around 12 per cent. (Reflects earlier asset redistribution and basic need provision in China under communism, plus larger mass market and role of agricultural prices.)
India: poverty ratio much higher and persistent, between 26 per cent and 34 per cent depending upon how one interprets the NSS data.
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Queries