Date post: | 29-Jan-2018 |
Category: |
Economy & Finance |
Upload: | yougal-chettri |
View: | 47 times |
Download: | 0 times |
RISE OF CHINA_ SUMANTH
INDIA RISING_ ASHISH
PROBLEMS OF India AND CHINA_ MARUTHI
IMPLICATION OF THE RENAISSANCE_ YOUGAL
CHINESE ACHEIVEMENTS
The Greatest economic success stories in Modern times.
China’s real GDP grew at an average annual rate of nearly 10% for three decades.
679 million people in China were raised out of extreme poverty.
The world’s largest manufacturer, merchandise exporter and importer, and holder of foreign exchange reserves.
FACTORS FOR RISE OF CHINA
High productivity in Manufacturing
Export led Growth
Infrastructural advancement
Human resources
Govt. initiatives
Foreign Investment
HIGH PRODUCTIVITY IN MANUFACTURING
Manufacturing plays a considerably more important role.
Reallocation of resources to more productive uses.
Focused on low-cost, labor-intensive manufactures.
Rise of market-oriented and more efficient non-state enterprises.
Large-scale capital investment.
Measures to boost exports and to promote and protect certain industries.
EXPORT LED GROWTH
It is the largest trading partner for 130 countries.
Active policy of boosting trade and investment ties.
Abundance of low-cost labor has made it internationally competitive.
Undervalued currency and subsidies given to domestic producers.
Assembly into finished products.
Seeks to capture Advanced technology exports market.
INFRASTRUCTURAL ADVANCEMENT
Electricity production now doubles nearly every 10 years.
Road network has more than tripled in length in the last two decades.
Expansion of high speed railway and city wide metros.
Establishment and expansion of coastal ports.
Government stimulus investment programme.
HUMAN RESOURCES
• Human resources growing in scale.
• Remarkable improvement of education.
• Optimized employment structure.
• Good progress in talent development.
• Efforts have been mobilized to build up the public health system.
• Key player in transition to services led and consumption driven economy.
GOVT. INITIATIVES
SOEs continue to dominate such as petroleum and mining, telecommunications, utilities, transportation.
Elevated markets to decisive role.
Liberalization of foreign investment.
Establishment of free trade zones.(SEZs)
Response to 2008 crisis by sharply increasing spending on fixed investment.
China’s leaders initiated a new “go global” strategy.
FOREIGN INVESTMENT
China is the world’s largest destination for FDI inflows.
China’s trade and investment reforms and incentives.
Major source of China’s productivity gains and rapid economic and trade growth.
FIEs in China dominate China’s high technology exports.
The actual level of FDI in China may be overstated.
CONCLUSION
Chinese growth fuelled by exploiting competitive advantage in areas of Manufacturing, exports.
Infrastructure is impressive but not up to full potential.
Rapid growth rates no longer possible.
Need for transition to services led and consumption driven economy.
Need for more transparency in areas of Banking and transparency.
REFERENCES
China’s Economic Rise: History, Trends, Challenges, and Implications for the United States by Wayne M. Morrison.
www.beijingreview.com.cn
www.bloomberg.com
www.globalresearch.org
www.ft.com
“Report for Selected Countries and Subjects”. IMF
"Export Partners of People Republic of China". CIA World Factbook.
"Labor force, total". World Bank.
Even though there has been a phenomenal rise in India as a global economic power, its growth
story is not new. In fact it started way back in1991.
19
GDP Growth Rate
India's GDP growth during January–March period of 2015 was at 7.5% compared to China's 7%, making it the fastest growing economy.
India's services sector grew by 10.1%, manufacturing sector by 7.1% & agriculture by 0.2%.
30% to 40% of GDP growth is due to the rising productivity.
20
Agriculture
India holds the second position worldwide in terms of farm output.
It generates works for more than 60% of the total workforce.
India exports many agro products like Rice, milk, tea and many others cash crops.
22
Industrial Output India is 10th in the world in factory output.
Manufacturing sector in addition to mining, quarrying, electricity and gas together account for 27.6% of the GDP.
India’s major exports are petro products, transport parts, electronics etc.
It employs 17% of the total workforce.
23
Services India is a service sector led economy
IT and Pharma are the biggest contributors
This is because of the reforms that favoured growth faster in this sector than any other sector.
Quality of population: presence of large number of people educated in engineering.
India is 2nd in Services Output.
ITES – BPO Sector has become a big source of employment for number of youth.
24
LATEST UPDATE , JANUARY 2016 :
India’s technology and BPM sector (including hardware) is estimated to have generated US$ 146 billion in revenue during FY15 compared to US$ 118 billion in FY14, implying a growth rate of 23.72 per cent.
TCS is the market leader, accounting for about 10.1 per cent of India’s total IT & ITeS sector revenue.
[Source: Nasscom ,TechSci Research]
25
REASONS FOR INDIA’S GROWTH
• Domestic Demand
• New Government Reforms
• Lower Crude oil Prices
• Lower External Vulnerabilities
• Better among EMs
DIRECT
CAUSES
• Investment in Infrastructure
• Human Resource
• Increase in Capital Inflows
• India’s growing trade
• Role of govt.
INDIRECT
CAUSES
26
Investment in Infrastructure
The Indian power sector
The Indian construction and real estate industry
Transport industry.
27
HUMAN RESOURCE
Working population will increase from 60.1% to 68.4% (age 15-64) from 2001-2026.
Literacy rate at more than 75%
Better Female Literacy rate
Regional Imbalances narrowing down
Population Growth Rate is slowing.
Poverty is Declining.
28
Banking and Finance
Role of banks in India
India’s saving rate
India’s investment rate
Increase in no. of banks and its branches
The Indian banks are also said to have clean, transparent and strong balance sheets comparing to their Asian counterparts.
29
GROWTH OF TRADING ACTIVITY
India a trade deficit country
Increase in volume
Increased no. of trading partners
Increase in no. of commodities
Top exports: petro products, vehicles, machines, pharma etc
Top imports: crude oil, gold, electronics etc
31
Export and Import Graph
0.0
100000.0
200000.0
300000.0
400000.0
500000.0
600000.0
Exports Imports
32
GOVERNMENT INITIATIVES
Lowering tax rates for homegrown industries
Subsidies
SEZs
Investment in social goods
Initiatives by the new govt. like MAKE IN INDIA, skill India, MUDRA.
33
CONCLUSION
India, today, has a vibrant economy and is recognized as a leader among the emergent countries with a huge potential for growth.
India is now initiating the second generation reforms intended for a faster integration of the Indian economy with the world economy.
In the present decade India has witnessed unprecedented levels of economic expansion and also seen healthy growth of trade.
34
2PROBLEMS FACING INDIAN ECONOMY…..?
1. INFLATION 7-8%
2. Poor educational standards
3. Poor infrastructure
4. Inefficient agriculture
3Conti…..
5. High levels of debt
6. Large budget deficit
7. Rigid labour law
8. Inequality has risenrather decreased
4Problems of Chinese economic growth
1. pollution
2. Property boom
3. Growing income inequality
4. Inefficient banking sector
COMPARING INDIA AND CHINA
Form of Govt.
Purchasing power parity
Growth path
Infrastructural advancement
Human resource
Drivers of growth
IMPLICATIONS FOR THE FUTURE
Increase in per capita income dramatically
Well equipped armed forces + economic muscle
This will lead to a multipolar world
Environmental hazards
Energy demands
ECONOMIC IMPACTS ON THE GIANTS
Huge increase in GDP
Increasing standard of living
“knowledge intensive” trade
Increase in trade in both volume and composition
Trade to GDP ratio
LEAD ERODED
A. Production lead
B. Technological lead
C. Relative income lead
Domination in international affairs eroded
Eg : Britain in 20th century
SCARCE RESOURCES
Increase in demand for natural resources
This will lead to increases in prices
Loss of real income for advanced countries
GLOBAL KNOWLEDGE POOL
More resources devoted to R&D
Technology becomes cheaper in China and India
Rest of the world will gain from import of these technologies
COMPARATIVE ADVANTAGE
Rise in productivity
Productivity higher in “ knowledge intensive” goods and services
Educated v/s Uneducated workers
Increase in prices of labour intensive products
How it affects rich countries and LDCs ?
The “Flying Geese Theory” (Ozawa 2005)
Shift in TERMS OF TRADE a long term phenomenon
ABSOLUTE ADVANTAGE
Productivity and wage lag. Eg china
Abundance in labour supply and its impact
Investment gets choked in advanced countries
“Round tripping”
CONCLUSION
Expensive fuel, resources and labour intensive goods
More investment on research and development
Expanding market
Investment shifts and its effects
Structural changes