You are on page 1of 49

Introduction

INDIA
Capital city Total area New Delhi 3,287,590 sq km

CHINA
Beijing 9,596,960 sq km

Population
Population growth rate Literacy rate Government type Currency
Source: CIA World Fact book

1,147,995,904
1.578% 61% Federal Republic 1 Yuan = US $ 6.9385

1,330,044,544
0.629% 92.2% Communist State 1 Rupee = US $ 54.77

Economic Indicators
Economic Indicators China India USA

GDP (current exchange rate) GDP (per capita)

$4.22 trillion

$1.237 trillion

$14.33 trillion

$6,100

$2,900

$48,000

GDP composition

Agri - 10.6% Industry - 49.2% Services - 40.2%

Agri - 17.2% Industry - 29.1% Services - 53.7%

Agri - 1.2% Industry - 19.6% Services - 79.2%

Forex Reserves

$2.033 trillion

$274.2 billion

$70.57 billion

Economic Indicators (contd.)


Economic Indicators China India USA

Exports

$US 1.645 trillion

$US 175.7 billion

$US 1.337 trillion

Imports

$US 1.156 trillion

$US 287.5 billion

$US 2.19 trillion

Current Account Balance

$US 368.2 billion

- $US 38.39 billion

- $US 568.8 billion

Public Debt

15.7% of GDP = $US O.66 trillion

54% of GDP= $US 0.66 trillion

60.8% of GDP = $ US 8.71 trillion

Other Important Measures


Measures China India USA

Labor Force

807.7 million

523.5 million

155.2 million

Oil production

3.725 mn bbl/day

880,500 bbl/day

8.457 mn bbl/day

Oil Exports

399,000 bbl/day

450,700 bbl/day

1.165 mn bbl/day

Oil Imports

4.21 mn bbl/day

2.159 mn bbl/day

13.71 mn bbl/day

Part 2
Infrastructure

Infrastructure Overview
China India USA

Roadways

1,930,544 km

3,316,452 km

6,465,799 km

Railways

75,438 km

63,221 km

226,612 km

Waterways

110,000 km

14,500 km

41,009 km

No. of Airports

467

346

14,947

Worlds Largest Container Ports


Port Singapore Port Shanghai (China) Hong Kong (China) Shenzhen (China) Busan (South Korea) Rotterdam (Holland) Dubai (UAE) Kaoshiung (China) Hamburg (Germany) Qingdao (China) Rank 1 2 3 4 5 6 7 8 9 10 Containers Handled in 2007-08(in mn TEUs) 27.9 26.15 23.88 21.09 13.27 10.79 10.65 10.25 9.9 9.46

Largest Container Ports (contd.)


There are 3 ports of USA among the 20 largest container ports of the world.
Port Los Angeles Long Beach New York Rank 13 15 19 Containers handled in 2007-08 (in mn TEUs) 8.4 7.3 5.4

No Indian port features among the top 20.The Jawaharlal Nehru Port in Navi Mumbai is the largest container port of India. It handled 1.5 mn TEUs in 2007-08.

Core Infrastructure Industries

Steel
Coal Electricity

Steel
Production in million metric tonnes
Country China Japan United States Russia India South Korea Germany Ukraine Brazil Italy Rank 1 2 3 4 5 6 7 8 9 10 2008 502.0 118.7 91.5 68.5 55.1 53.5 45.8 37.1 33.7 30.5 2007 489.2 120.2 98.2 72.4 53.1 51.5 48.6 42.8 33.8 31.5 % 08/07 2.6 -1.2 -6.8 -5.4 3.7 3.8 -5.6 -13.4 -0.2 -3.4

Largest Coal Reserves


Reserves in million tonnes
Country USA Russia Rank 1 2 Coal Reserves 246,643 157,010 Share (in%) 27.1 17.3

China
India Australia South Africa Ukraine Kazakhstan Poland Brazil

3
4 5 6 7 8 9 10

114,500
92,445 78,500 48,750 34,153 31,279 14,000 10,113

12.6
10.2 8.6 5.4 3.8 3.4 1.5 1.1

Largest Coal Producers


Production in million tonnes
Country China USA India Australia South Africa Russia Indonesia Rank 1 2 3 4 5 6 7 2007 2549 981 452 323 244 241 231

Poland
Kazakhstan

8
9

90
83

Largest Electricity Producers


Country USA China Japan Rank 1 2 3 Production in 2007 4.167 tr KWH 3.256 tr KWH 1.195 tr KWH

Russia
India Brazil UK South Africa

4
5 6 7 8

1.016 tr KWH
665.3 bn KWH 437.3 bn KWH 371 bn KWH 264 bn KWH

Coal Usage for Electricity Prod.


Country South Africa China India USA Share of coal in electricity prod. 93% 78% 69% 50%

Part 3
Automobile

Largest Vehicle Producing Countries


Production in million units
Country Japan Rank 1 2007- 08 11

USA
China Germany South Korea France Spain Brazil Canada Mexico India

2
3 4 5 6 7 8 9 10 11

10.5
8.1 6 4 2-3 2-3 2-3 2-3 2-3 1.95

Key Auto Manufacturers


Auto Manufacturer Profit Q308 Sales Q308 (in units) 173,494 Profit Q307 Sales Q307 (in units) 201,738

Maruti Suzuki Ltd.

Rs 2135.7 mn

Rs 3934 mn

Tata Motors

Rs -263.26 cr

98,760

Rs 499.05 cr

144,608

Toyota

- $ 1.8 bn

1,840,000

$ 4.58 bn

2,283,000

GM

-$ 2.5 bn

2,100,000

- $ 39 bn

2,359,551

Ford

-$ 129 mn

1,174,000

-$ 380 mn

1,487,000

Key Auto Manufacturers in China


Auto Manufacturer FAW - Volkswagen Shanghai Volkswagen Chery Automobile Sales (in units) in 2008 467,212 431,771 259,651

This reflects the dominant position of the Volkswagen group in the passenger vehicle market of China. Other prominent manufacturers in China are Geely Automobile and Guangzhou Toyota.

Car Sales in January 2009


Country China USA India Car sales in Jan;09 (in units) 735,000 656,976 110,212

This was the first time that the number of cars sold in China surpassed the number of cars sold in USA.

Some Facts
INDIA
Total Geographical Area 3,287,590 sq km
Arable land: 48.83% Major Crop Production Rice 136.5 mn tonnes Wheat- 78 mn tonnes Sugarcane - 355 mn tonnes

CHINA
Total Geographical Area 9,596,960 sq km
Arable land: 14.86% Major Crop Production Rice - 182 mn tonnes Wheat 96.2 mn tonnes Sugarcane 106 mn tonnes

Chinese agriculture scenario


STRENGTHS China, the world's biggest agricultural country in terms of farm population. WEAKNESSES Large population. Estimated loss of one-fifth of agricultural land since 1949

Increase spending on agriculture by over 20 percent in last 3 years. Arable land loss due to deforestation. OPPORTUNITIES THREATS Potential to increase grain output Severe droughts- hit by the worst in 50 yrs recently (N.China). Organic farming. Water level in dams lowered.

Indian agriculture scenario


STRENGTHS Rich Bio-diversity Climate WEAKNESS Fragmentation of land Poor Infrastructure

Strong and well dispersed research and extension system


OPPORTUNITIES THREATS

Budget focus on agriculture.


Agro-based Industry Untapped potential in the N.E.

Unsustainable Resource Use


Imports

Financial Sector Regulators


India
Banking Reserve Bank of India (RBI) Capital Markets Securities Exchange Board of India (SEBI) Insurance IRDA

China

Central Bank: The People Bank of China (PBOC)

Securities industry: China Securities Regulatory Commission (CSRC) Insurance industry: China Insurance Regulatory Commission (CIRC)

Issues and Challenges - China


The Bank of China' s outstanding loans stood at nearly 1.6 trillion yuan (235.3 billion U.S. dollars) by the end of January, up 87.29 billion yuan compared with the beginning of the year.
Unemployment at 4% officially, but including migrants can be at 9% Inflation: 4.8% for 2007, and 7.1% for Jan.,2008

Hit due to slow down in big economies especially USA

Policies to meet challenges


Redistributing fruits of economic growth to remove inequality in income.

Shifted from a tight monetary policy implemented in early 2008 to a moderately easy one as the international financial turmoil spread in the later half of the year Enhancing financial support to maintain economic growth.
The latest interest rate cut brought the one-year lending rate to 5.31% and the one-year deposit rate to 2.25%. (9th march, dow jones business news) Bank cut its reserve ratio after repeatedly increasing it in 2007 and early 2008. To offer more loans to smaller enterprises.(6th march, reuters)

Issues and Challenges India


Financing SMEs

Rural Consumer Financing


Large Financing Demands for Infrastructure Investment Banks will Need More Capital to Expand Management of Volatility in Capital Flows Measures Needed for Preserving Financial Stability

Policies to meet Challenges


Credit Information Bureau Act (CIBIL) Emphasis on Micro Finance Increase in FDI limits Continuing with Composite Objectivei. Price Stability ii. Sustained Economic Growth iii. Financial Stability

COMPARISONS INDIA - CHINA

India as back office of the world


FACTORS DEMAND RELATED AND SUPPORTING INDISTRIES
HIGH R&D INVESTMENTS AND CAPABILITIES SOFTWARE R&D CENTRES/LABS AND SOFTWARE TRAINING INSTITUTES

FIRM STRATEGIES, STRUCTURE AND RIVALRY


GROUND UP STRATEGY

HIGH PROFILE HUMAN RESOURCES

BACK-OFFICE SOPHISTICATED CONSUMERS AND INDUSTRIAL BUYERS

SKILLED LABOUR

HOMEGROWN ENTREPRENEURSHIP

HIGH LEVEL INFRASTRUCTURE, (RELIABLE/SATELLITE TELECOMMUNICATIO N) AVAILABILITY OF FAST DIGITAL TELECOMMUNICATIO N LINKS

INTERNAL ENTREPRENEURSHIP

ROBUST INFRASTRUCTURE (TELECOM, POWER AND ROADS)

HIGH COMPETITION

IT PARKS (BANGALORE, HYDERABAD, CHENNAI, PUNE,

FAVOURABLE FOREIGN POLICY

China as the work shop of the world


RELATED AND SUPPORTING INDUSTRIES
LOW R&D CAPABILITIES

FACTORS

DEMAND

FIRM STRATEGIES, STRUCTURE AND RIVALRY


STATE INVOLVMENT

UNSKILLED AND LOW COST LABOUR

DIRECT INVESTMENT

BASIC INDUSTRIAL INFRASTRUCTURE

INTERNAL DEMAND (STATE OWNED INDUSTRIES)

DEPENDENT ON FOREIGN TECHNOLOGY

GROWING COMPETITION BETWEEN , INDIGENOUS FIRMS, AND GLOBAL MULTINATIONALS LARGE NUMBER OF STATE OWNED INDUSTRIES MASS PRODUCTION BASED ON ECONOMY OF SCALE

CHEAP RAW MATERIALS EXTERNAL SOURCE OF TECHNOLOGY

EXTERNAL DEMAND

DEMAND OF LABOR INTENSIVE PRODUCTION

Role of the government


INDIA before
Semi-socialist autarkic economy Difficulty to set up a new business due to high protection Foreign investment not welcomed

CHINA before
Socialist economic system State-owned domestic enterprises Strict control

INDIA now
State planning through 5 Year Plan Reduced control on foreign trade and investment Privatization trend

CHINA now
3 Step Development Strategy Government supervision through indirect guidance of a more dynamic economy Many institutions to control and supervise
(People's Bank of China, National Development and Reform Commission, Ministry of Finance)

Published studies
Last year, the Forbes 200, an annual ranking of the worlds best small companies, included 13 Indian firms but just 4 from mainland China.

A report issued in 2000 by the Chinese Academy of Social Sciences concluded that, private and individual enterprises have a lower political status and are discriminated against several policies and regulations.
In a recent survey of leading Asian companies by the Far Eastern Economic Review (FEER), India registered a higher average score than any other country in the region, including China. In a World Bank study published last year, only 52 percent of the Indian firms surveyed reported problems obtaining capital, versus 80 percent of the Chinese companies polled. As measured by exports/GDP ratio, China was already more open than India in 1982.

Who is the winner?


If India has so clearly surpassed China at the grassroots level, why isnt Indias superiority reflected in the numbers? Why is the gap in GDP and other benchmarks still so wide?

Why?

1. Its the history; Indias economic reforms only began in 1991, more than a decade after China. 2. India has had to deal with a national savings rate half that of Chinas and lesser FDI. 3. Moreover, India is an extensive, messy democracy driven by ethnic and religious tensions. 4. Indias over-regulated labour market 5. India has also had a longstanding, volatile dispute with Pakistan over Kashmir. China, on the other hand, has enjoyed two decades of relative tranquility, it has been able to focus almost exclusively on economic development.

Comparing India and China, India is doing a superior job in utilizing their resources and exploiting the institutional advantages.
China and India have pursued different development strategies. China used the fastest route to reach economic development which is foreign direct investment (FDI). Indeed, Indias homegrown entrepreneurs may give it a long-term advantage over the Chinese inefficient financial system and capital market. Indias strategy may enable it to catch up with and perhaps even overtake China.

Answers are now well-known


Walk on Two Legs Traditional Labor-intensive Industry Labor market reforms Infrastructure (power) Fiscal deficit Modern IT Industry Higher Education Urban infrastructure

Looking Ahead: An India-China FTA?


If India and China want to take the bilateral road as they are currently doing, better to have a bilateral with each other

Rapidly growing India and China are windows of opportunities for each other. Huge potential in bilateral trade, linking 1/3 rd of humanity

Strategies for future bilateral trade


For existing commodities in trade, penetrate regions in china. India can be lowest cost producer to china in areas like education, professional and financial services.

China location, culture and human resources can provide India a springboard to enter Japanese and Korean markets.
Leverage Indian technology and management in conjunction with Chinese low cost labor and excellent infrastructure.

Trade facilitation
Reduce shipping and container costs Move towards EDI (Electronic Data Interface) in customs administration Mutual Recognition Agreements on standards Bilateral agreement on investment with investor protection . Use MIGA best practices as both members of MIGA

Engines of global growth


1/3rd of humanity demanding goods and services from the world 1/4th of high skilled labor providing goods and services to the world In 2025, combined gdp of both would be equal to that of g7 minus US (Japan, Germany, France, UK, Canada and Italy).

India and China cannot afford to ignore each other..

Thank You

You might also like