IS

CHINA
A THREAT TO
INDIA
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 consume
r goods

c om pu ter
al l c e nt e rs &
C
engineers
 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 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% growth Average 9.5% growth
rate in past two rate in past two
Areas of Rising
decades.power in Dominant
decades. in mass
Specialization software, design, manufacturing,
services, and electronics and heavy
precision industry. industrial plants
Comparing India and China ’ s Growth
Stories
Indicators India China
Gini index 47.0 (up 10 points
(standard measure 36.8 from 15 yrs ago)
of inequality)
Foreign Direct 6.8% (up from 0.3% 17.8%
Investment in 2004)
Future Areas of R&D, bio- IT business, services
growth technology, high- and continued
value IT enabled manufacturing
services (legal,
medical, engineering
architecture),
manufacturing, agro-
based 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 of the

15% of export earnings

Rural women play a vital role, 50% of rural

Yields 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

                (Value in Rupees 
Crore)

Year Agriculture  Total National %age Agriculture Agriculture Total National %age Agriculture

Imports Imports 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 
2007-08(P) 29777.01   964849.76 3.09  77769.71   640172.14 12.15 
P     Provisional
Source : DGCI&S, Ministry of Commerce, Kolkata. 
 China
Agriculture accounted for 10.6 % of the

33o million- over 45% of labor force still

Farming methods have been improved in

China produces wheat, rice, potatoes,

Only 15 percent of the total land available

more 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 to CSO the industrial output clocked an annual

There 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 brands like Louis Vuitton are looking at India

Skoda 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 sector is the largest employer which

Employment growth rate is 2.78%

 China ’ s Manufacturing
Sector
Chinese manufacturing sector accounts for 43% of

Its economy growth in average of almost 8% every

Chinese manufacturing sector ranks 4th in the world


 China ’ s Manufacturing
Sector
China’s fast growing domestic market worldwide

Purchasing Manager’s Index (PMI) which measures

PMI 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 :
Low High

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 8.01 10.78 6.06 10.47 6.72 6.62 10.35
Organizations
Real Estate 6.07 11.64 29.15 22.34 30.66 32.16 30.92
Wholesale, Retail Trade 23.57 30.39 19.15 17.98 18.54 20.81 20.05
and Catering
Transport, 16.96 19.18 12.11 13.09 8.91 10.00 7.89
Telecommunications etc
Transport and Storage 8.76 10.86
Post and 8.20 8.32
Telecommunications
Education, Health, 28.87 14.73 21.69 20.59 25.40 23.51 20.44
Research etc
Education, Culture and 8.71 7.98
Arts
Health, Sports and Social 2.96 2.14
Welfare
Scientific Research and 2.25 0.89
Polytechnic
Others 14.95 3.71
Total 100 100 100 100 100 100 100
Service Sector Share over
Total GDP
Economic Structure and
Level of Development
 CURRENCIES
INDIA CHINA
 History of Exchange
rate
Year 1 INR = % 1 USD = % I USD = %
CYN Change INR Change CYN Change
2000 0.1910 43.55 8.2798
2001 0.1774 (7.12) 46.75 7.34 8.2773 (0.20)
2002 0.1714 (3.38) 48.28 7.15 8.2766 (0.20)
2003 0.1723 0.52 48.05 (0.47) 8.28 0.40
2004 0.1817 5.45 45.55 (5.20) 8.2767 (0.40)
2005 0.1912 5.22 43.35 (4.83) 8.2765 0.00
2006 0.1796 (6.06) 44.92 3.62 8.0702 (2.50)
2007 0.1764 (1.78) 44.24 (1.51) 7.8051 (3.28)
2008 0.1853 5.04 39.26 (11.08) 7.2755 (6.78)
2009 0.1409 (23.96) 48.41 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 DISCOUNT ACCOMMODATIONS ACCOMMODATIONS
CHANGE WITH COLLATERAL WITHOUT COLLATERAL

2009-02-19 1.25 1.625 3.5

2009-01-08 1.500 1.875 3.750
2008-12-12 2 2.375 4.25
2008-11-10 2.75 3.125 5
2008-10-30 3 3.375 5.25
2008-10-09 3.25 3.625 5.5
2008-09-26 3.5 3.875 5.75
2008-06-27 3.625 4 5.875
2008-03-28 3.5 3.875 5.75
2007-12-21 3.375 3.75 5.625
2007-09-21 3.25 3.625 5.5
2007-06-22 3.125 3.5 5.375
2007-03-30 2.875 3.25 5.125
2006-12-29 2.75 3.125 5
2006-09-29 2.625 3 4.875
INDIA AND CHINA IN 2020
According to a recent report from



THANK