A Comparison between India

and China
 Flow Of the Presentation
• Geographic Location
• Introduction
• Liberalization of market
• Economy
• Political Set up
• Infrastructure
• Manufacturing Sector
• Services Sector
• Banking sector
• Retailing
• Currency System
• Macro economic Variables
• Real Comparison
• Issues confronting India
• Issues confronting China
 Geographic Location

Two territories which are currently the disputed territories are Arunachal
Pradesh and Aksai Chin. Two countries share borders across Himalayas,
Nepal and Bhutan. Both countries respect the Actual line of control.
 INTRODUCTION
CHINA INDIA
• International hub for • India specializes in
hardware design and Pharmaceutical
manufacturing. sector and IT/BPO
• Growth rate between services, call centers,
8-9%. back office operations
• FDI is much more and R&D.
than what India • Growth rate between
attracts. 6-8%.
• FDI in India is 7- 8
times lesser than
China.
SIMMILARITIES-
Both the countries have enormous populations, low labour costs, both
benefit from highly skilled engineers and active entrepreneurial sectors.
 Liberalization of The Market
• China started towards the liberalization of its
market economy that was in 1978.

• India was very slow in embracing globalization

and open market economies, liberalization
policies started in the 1990’s in India.

• China welcomed FDI’s and PI’s in the mid

1980s. This made a significant change in its
economy and the GDP increased considerably
 Economy
CHINA INDIA
Third Largest in Twelfth largest in
the world by the world by
nominal value. nominal value.

Exports : $1.43 Exports :

trillion $175.7 billion

Imports : $1.13 Imports : $287.5

trillion billion

Gross external debt :

Gross external debt :
$227.70 billion(30 June
$374.66 billion(2008)
‘09)
 Political Set Up

CHINA INDIA

Authoritarian Democratic
Regime Set Up

More Quick, Difficult and time

Enduring and consuming in
unpopular Democracy
decisions

Better Infrastructure Free flow of Information

enables efficient offers economic
investment advantage
 Infrastructure
CHINA INDIA

Better physical
and modern Lacks capital
infrastructure

Spends Spends
considerably considerably
more more

Highway
Highway
coverage
coverage in
much lesser
million kms
than China
 Manufacturing Sector

CHINA INDIA

49.2% of 29% of India’s

Chinese GDP. GDP

Hub for
Ranks 4th in the companies like
world after US, Suzuki, Skoda
Japan, & Germany. Auto, Samsung
etc.
 Services Sector

CHINA INDIA

40% of Chinese 53.7% of Indian

GDP. GDP.

Net importer of Net exporter of

services services
 Banking Sector
CHINA INDIA

Banks owned by central govt-9, 88 Commercial Banks , 27

Public Sector Banks.
Banks owned by local govt- 7

Nationalized banks with

Many others like privately owned higher quality, as they
banks, banks incorporated in the have 53000 branches and
special administrative regions etc. 17000 ATMs

The People’s Bank Of China Is

Central Bank Of China Reserve Bank Of India Is
Central Bank Of India
 Retailing

CHINA INDIA

Modernized and Retail

massive Liberalization
investment has just begin

Standardized
Highly
production and
fragmented
distribution
industry
system
 Currency System

CHINA INDIA

Renminbi
Only legal tender-
denominated as
Indian Rupee
Chinese Yuan.

Subdivided into 100 Subdivided into

fen 100 paise

Issued by People’s Issued by Reserve Bank

Bank Of China Of India
 Macroeconomic Variables
FACTS INDIA CHINA
around $1.209
GDP around $7.8 trillion
trillion

GDP growth 6.7% 9.1%

Per capital GDP $1016 $6,100

Inflation 7.8 % -1.2 %

Labor Force 523.5 million 807.7 million

Unemployment 6.8 % 4.3 %

 CHENGDU- The New Destination
• Chengdu Tianfu Software Park.
• Support from government
• An abundant reserve of talent,
• Low costs
• Well-established infrastructure.
• As of December 2009, there are over 100 companies
operating in the park (40% foreign invested) for a total of
14,000 people
• IBM, Accenture (2009), Symantec, Huawei, SAP, Nokia-
Siemens, EMC (2009), Siemens (2009),China Mobile
and now recently - Wipro.
Comparing India and China’s Growth Stories
Indicators India China
Political System Multi-party One-party
Democracy authoritarian rule

Speed of Growth Economic reforms Economic reforms

started in 1991. started in 1978.
Average 6% Average 9.5%
growth rate in past growth rate in past
two decades. two decades.

Areas of Rising power in Dominant in mass

Specialization software, design, manufacturing,
services, and electronics and
precision industry. heavy industrial
plants
 Comparing India and China’s Growth Stories
Indicators India China
Foreign Direct 6.8% (up from 17.8%
Investment 0.3% in 2004)
Future Areas of R&D, bio- IT business,
growth technology, high- services and
value IT enabled continued
services, manufacturing.
manufacturing,
agro-based
industry.

Labour Force 807.7 million 523.5 million

(first in the world) (second in the
world)
 Issues confronting India

• Inadequate power supply.

• Inadequate port facilities.
• Lack of investment in rail network, roadways and water
management.
• Terrorism and border disputes.
• Corruption.
• Unemployment.
• Declining contribution of agriculture sector to the GDP.
 Issues confronting China
• High inflation.
• Border disputes.
• Banking sector risk.
• Heavy dependency on exports.
• Less consumption.
• Very high volatility in markets.
• Ageing population.
Cheers to CHINDIA !!!!
 Thank You!
• Tanu Mahajan
• Sorav Gupta
• Divya
• Nitin
• Rishav
• Surbhi
• Mansi
• Aastha
• Disha
• Shivani Kathuria
• Vikas