India vs Chaina

7/29/2019 India vs Chaina

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NATIONAL INCOME OF

CHINA VS INDIA


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Group Members

Moiz Attarwala 02

Shubhangi Khatavkar 13Muruza Kothari 17

Khaty Mistry 20Aziz Motiwala 21


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CONTENTS

INTRODUCTION

CHINA GDP GROTH

INDIA GDP GROWTH

GROWTH STORY OF INDIA

GROWTH STORY OF CHINA

STRENTHS AND WEAKNESS CHINA OVER INDIA


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INTRODUCTION

Rapid catch-up growth in Asia will bring about a historic shift in thecenter of gravity of the world economy. Since 1800, the North Atlanticeconomies have been the worlds dominant economies and politicalpowers. The cataclysms of World War I, the Great Depression, and

World War III did not shake the dominance of the North Atlanticeconomies, though they did shift the balance of geopolitical influenceaway from Europe, especially the British Empire, to the United States.

Now, after many centuries, the unquestioned economic andgeopolitical dominance of the North Atlantic will end. The Americancentury will end sometime in the second quarter of the twenty-firstcentury, when Asia becomes the center of gravity of the world economy,in the sense of producing more than half of the worlds income. Theend of the American century will not be the result of any collapse of

Americas well-being but rather the rise of Asias economic power.


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Growth story of India

Indias economy has come a long way, especially since the start ofthis century. It is impossible to ignore Indias rise in every field.Every nation is keeping a close eye on Indias growth story, and

why not, India is on its way to become a superpower.

GDP at market prices has increased from US$ 20 billion in 1950-51 to US$ 912 billion in 2006-07 and is expected to cross a trilliondollars in the current year. In terms of purchasing power parity(PPP), Indias GDP at US$ 4 trillion in 2006-07 accounted for 6.3per cent of global GDP.

Average annual economic growth, which had been constant andtardy at 3.5 per cent during the first thirty years ofIndependence, increased to 5.7 per cent during the 1990s and,since 2003-04, the average rate has increased further to 8.6 percent. 2006-07, in particular, was a splendid year with the GDPgrowing at 9.4 per cent.


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This growth has not been jobless growth. During 1999-2000 to 2004-05, India added to its workforce about 12million people each year. During this period, the rateof growth of employment was 2.9 per cent per year.India, after China, is the fastest growing economy ofthe world.

The proportion of people living below the poverty linein India has declined from 51.3 per cent in 1977-78 toabout 22 per cent in 2004-05. But in absolute termsthey still number around 250


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More than one third of our 1.1 billion people live onless than one dollar a day.

We have achieved an enrollment ratio of 95 percent in primary education. Of the children inschool, 73 per cent are now reaching Grade V.

India has helped in pushing the Asia Pacific

regions overall enrollment rate to 94 per cent.India is also on target on elimination of genderdisparity in primary and secondary education.

Government have a guaranteed wage employmentprogrammed that assures to the poor work for 100days in a year and provides them a wage of Rs 80(or US$ 2) per day.


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Year

GDP -

real

growth

rate (%)

2000 5.5

2001 6

2002

4.3

2003 4.3

2004 8.3

2005 6.2

2006 8.42007 9.2

2008 8.5

GDP - real growth rate: 9% (2007 est.)


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Growth story of China

1983-85 Double-digit real GDP growth accompanied thefirst wave of foreign investment into China, and non-stateenterprises started to develop.

1989-91 Growth slowed after the government braked theoverheating economy following an aborted effort at

wholesale price reform in 1988 which resulted in panic

buying and runaway inflation. Price stability was achievedby cancelling large fixed investment projects, slowingdomestic demand. Foreign investment fell off after theBeijing Massacre of June 1989.


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1992 Deng Xiaoping's Southern Tour massivelyboosted foreign direct investment inflows into coastalareas and started a wave of government investment inShanghai. Record trade and GDP growth and inflationfollowed.


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Especially after the publication of the 1998 GDP figures,economists, both in China and abroad, have raised seriousdoubts about the quality of China's national accounts,

which appeared in the late 1990s to overstate economicgrowth and are now suspected of understating growth.This may be because the statistical system tends tooverestimate output at the trough of the cycle andunderestimate output at the peak.

However, the country's first production census discoveredat the end of 2005 that GDP has recently been grosslyunderestimated as a result of a failure to take into accountthe rapid growth of the services sector. As a result, growth

rates for 2003-2005 are now recorded at around 10% peryear in real terms.

Despite efforts to cool the overheating economy, theofficially recorded GDP growth rate was 11.4% in 2007.


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Strengths of China over India:

The continuous and steady increasing GDP per year easilyshows the growth and development of country is going onat a smooth rate.

It is a larger country than India in terms of area so landresources are more i.e. less shortage of land though itspopulation is greater than that of India.

There is an increased growth seen in China in theSecondary industries. Hence increasing employmentfacilities.

On the connectivity front, India lags far behind China withabout 40 million Internet users and 116 million telephonesubscribers. However, I hear the word democracy can beused freely at Indian chat sites


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China possesses a better saving rate than India.

China has little political freedom but greater economic

freedom. India has political freedom butcomparatively lesser economic freedom.

China's national per capita national income hasreached US$1,740 in comparison to US$ 950 of India.

At 70th position, India rates low on the infrastructuresub index as compared to China, which is at the 53rdposition


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Weaknesses of China over India:

India has higher investment rate than China

India scores higher in the maturity of her financial

institutions including banking, stock exchangesand monetary system (Reserve Banking).

The 4 richest people in India (Premji, TheAmbanis, Sunil Mittal) are worth more than the

top 40 richest Chinese. 150-200 million people in the middle class and

close to 24% of the population below the poverty

line.


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By mid-century, India is expected to have 1.6 billionpeople - and 220 million more workers than China

According to various surveys, India is considered tobe more innovative than China. India scores over China in both the market

opportunity and regulatory sub indices with 28th and

16th position respectively while the latter holds the50th and 52nd position.


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Thank You

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