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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