CHINA IN 1980s

India in 1980s

CHINA IN 2010

INDIA IN 2010

Trade relations between two Asian

giants

INDIA & CHINAPresented to-

Dr.Ranjan UpadhyaySenior FacultyFMS-WISDOM

Presented By-

Priya Maloo(7257)Swati Pahwa(7328)Unnati Gupta(7337)

Topics to be covered-

1 Basic information of 2 countries2 Comparison between India and China3 Import and Export Volume4 Bilateral trade flows5 Import and export items6 Trade disputes7 Trade settlement8 Why India lag behind China?9 India & China-friend or foes?10 Roadblocks in trade relations11 Stumbling blocks in trade relations12 Strategic dimensions13 Analyzing the backdrop14 What India and China can do together?15 Future prospects and suggestive measures16 Recent news17 Conclusion

Analogy representing Indo-China relationship

FACTS INDIA CHINAGDP $ 1.3213 trillion $ 4909.28 billion

GDP growth 8.9% 9.6%

Inflation 8.62% 4%

Labor force 467 million 813.5 million

FDI $ 12.40 billion $ 9.7 billion

World prosperity index 88th position 58th position

Mobile users 842 million 687.71 million

Internet users 123.16 million 81 million

Foreign exchange reserves

$ 2.41 billion $ 2.65 trillion

AGRICULTURE

INDIA CHINA

Traditional methods Modern Techniques

Information technology & BPO

•India enjoys an upper hand over China in IT & BPO industry•Earnings from BPO In India stood US $ 49.7 billion (2010) and China earnings stood US $ 35.76 billion.

LiberalizationIndiaChina

China was an early Bird in initiating liberalization in 1980 whereas India’s liberalization took place in 1991.

Infrastructure

China has well developed infrastructure facilities in comparison to India in terms of highways, water management, health care facilities, civic amenities , communication, manpower and so on.

INDIA CHINA

Shanghai Stock Exchange

Bombay Stock Exchange

Capital market

• Shanghai stock exchange (SSE) larger than BSE in terms of capitalisation with US $1.7 trillion & 849 listed Co’s in comparison to BSE with US $ 1 trillion & 4833 listed companies.• SSE is behind BSE in terms of transparency,stability and predictibilty

Company Management capabilities

India enjoys an upper hand in terms of company management capabilities because its not the Chinese exports that drove their economy rather it’s the export product of its outsiders who set up their industries in China.

INDIA CHINA

Mergers & Acquisitions

•Indian companies are rapid in doing Mergers & Acquisitions in comparison to Chinese companies.•Recent examples include-Tata steel acquisition of Corus for $13.6 billion.•Ranbaxy acquisition of Romania’s Terapia.

Imports volume of India and China

Exports volume of India and China

Trade volumes between India and China in Billions

Import items from China to India

• Electrical Machinery

• Machinery

• Plastic

• Organic Chemicals and Inorganic • Chemicals

• Iron And Steel, Iron/Steel Products

• Rare Earth Metals

• Fertilizers

• Manmade Filament, Fabric

• Impregnated Text Fabrics

• Silk; Silk Yarn, Fabric

• Vehicles

• Mineral Fuel, Oil Etc

• Aluminum

Export items from India to China.• Machinery

• Plastic

• Ores, Slag, Ash

• Iron And Steel

• Metals

• Organic Chemicals Salt

• Inorganic Chemicals

• Cotton and Yarn, Fabric

• Copper and Articles Thereof

• Hides And Skins

• Artificial Flowers, Feathers

• Tanning, Dye, Paint, Putty

• Precious Stones

• Fish And Seafood

Trade Disputes•Fraudulent trade practices•Tall claims broken by Chinese companies•Building a relationship of distrust•Problems faced by Embassies•.

Trade SettlementsAdvisory committee's suggestions:

• Company should desist making an advance payment• Company should operate through bank guarantee• Company must not release Letter of credit without inspecting

INDIA CHINA

Why India lag behind China ??

INFRASTRUCTURE DIFFERENCE

DIFFERENCE IN TRANSPORT MODES

HARE AND TORTOISE

COULD INDIA CATCH CHINA BY 2030

NOW

BY 2030

Friends OR

FOES?

See-saw like relationships

China seen as a threat to India

Road-Blocks in relations

Stumbling Blocks in relations

No territorial

ambition

China’s image as a benefactor to Pakistan

Soviet Union invasion in Afghanistan

India’s possession on Tibetan Autonomy

ROAD-BLOCKS

STUMBLING-BLOCKSMore commonalities than difference a)Agreement upon bilateral trade

Exports and imports

Indian companies in China

a)Cadilla d)Infosys

b)Workherdt e)Tata imports

c)Torrent f)Lupin lab.

SINO-INDIAN TIES: The strategic dimension

Improved trade at the grass root level

Joining ASEAN’s collaborate

India joining China’s Shanghai co-operation

China joining SAARC

Establishment of common market

Future relations

What the two giants can do together?

Improve bilateral trade

Steel,constructions,minerals,auto components, software,travel and tourism,etc

Co-operation including China’s stance on Sikkim and India’s on Tibet

Reshaping Global economic and security system

Opening up Agricultural markets

Oil exploration and purchase agreement

Tariff rationalization

Educational exchanges

Cultural exchanges and public diplomacy

ANALYSIS OF THE BACKDROP

Need to improve economic and political relations

Moving forward to the global arena

FUTURE PROSPECTS AND SUGGESTIVE MEASURES

1.Sub regional co-operation

Health care

Energy

Education

Environment 2.Foreign Direct Investment

India’s focus on its strengths

3.Trade Scenario

China as the second largest oil consumer in the world

Natural gas as an important source of trade

Joint ventures of steel production

Renowned Indian companies entering into the Chinese market

Investment in intellectual capital

China’s products exhibition to be held in Mumbai

Oversees energy deals: India catching up on China