Submitted By:

Ananya Mishra

Khushbu Aggarwala

Nilofar Naaz

Priyadarshi Mohanty

Sushovit Sarthak

Simli Misra
 ACKNOWLEDGEMENT

This report has been completed under the guidance of

Prof.M.K Sahoo,our esteemed faculty .We thank him for his
extended support towards making this report a success.

We even thank our batchmates for their cooperation and help

whenever we required it
 CONTENTS

OVERVIEW

COMPARISION OF ECONOMIES

INTEREST RATES COMPARISION

TRADE DATA COMPARISON

SECTORWISE COMPARISION

FDI

GDP Per Capita

GROWTH RATES OF IMPORTAND EXPORTS

POPULATION

LABOUR FORCE COMPARISION

CONCLUSION
 OVERVIEW

BRAZIL, Russia, India and China, the acronym is BRIC. Out of

these four counties the last two ‘IC’- India and China - are in
limelight in the eyes of worldwide investors. Chinese dailies are
full of the news of huge market capitalisation of top five Chinese
companies, one of which (Petro China) has created a world record
by being first company of the world to have market capitalisation
of over one trillion dollars. This article compares the two hot
countries of Asia.

India and China together account for 40 per cent of the world’s
population, 9 per cent of the world’s gross domestic product
(GDP) at market exchange rates and 16 per cent of the world’s
GDP in purchasing power parity (PPP) terms. Moreover, by
November 2009, India and China had a 3.3 per cent weightage in
the global equity index.

As per current International Monetary Fund (IMF) forecasts for

global economic growth, INCH (which stands of INdia and CHina)
would account for 14.5 per cent of the world’s GDP by 2014 at
market exchange rates and 21 per cent in PPP terms.

Undoubtedly, China and India are today the engines of growth in

the midst of rapid economic transformation in the global economy.
In fact, driven by India and China, the emerging Asian economies
are no longer witnessing a slump, as per a report by the UK
financial services company, Barclays.

As per a report by the global financial services firm, BNP Paribas,

India and China will be able to sidestep contraction in their growth
rates in 2009-2010, despite the ongoing global economic turmoil.
The recovery in the emerging markets can be attributed to the
fiscal measures taken by their respective governments, which
would help them post positive growth in 2010-11, the report said.

A study by the International Finance Corporation (IFC), the private

lending arm of the World Bank, found that India’s policies for the
software sector and China’s promotion of special economic zones
(SEZs) for the manufacturing sector suggest that well-designed and
sector-specific government policies can overcome weaknesses in
investment climate and allow developing countries to compete
globally in new fields.

India and China, without ambiguity, are the economies which have
emerged most strongly through the financial crisis. Their year-on-
year GDP expansion, at 7.9 per cent and 8.9 per cent, respectively,
dominates third quarter world growth.

Moreover, India and China’s high rates of investment have not

declined significantly. At 35 per cent and 42 per cent of GDP,
respectively, the levels of gross domestic fixed capital formation in
India and China are the highest in the world..

India and China are also pushing for reforms and more
representation for the developing countries in multilateral
organisations like the International Monetary Fund and the World
Bank. The two countries are also working in unison at the World
Trade Organisation (WTO). In November 2009, India supported a
proposal by China seeking a more representative composition in
the WTO secretariat in Geneva.

Ahead of the Copenhagen Climate Summit in December 2009,

India and China signed a broad agreement to cooperate in the fight
against climate change and also underlined a common position on
talks for a tougher global climate deal.
Both the countries have contributed to the world GDP.A detailed
study of their contributions in various sectors has been studied
through this report.

Comparision Of Economies

As per IMF (International Monetary Fund) Report, China was the

fourth largest economy of the world by nominal GDP in 2006,
whereas India was 12th.
 
China registered GDP growth rate of 11.3 per cent in the first half
of 2007, whereas India has registered a 9.3 per cent GDP growth in
April-June 2007.
 
Chinese economy is worth $ 3.1 trillion (that is, $ 3100 billion),
whereas Indian economy is worth of $ 900 billion.
 
China’s forex (foreign exchange) reserves exceed one trillion
dollars (excess of $1000 billion) whereas India is having forex
reserves in excess of $ 265 billion. 
 
Chinese largest company Petro China is having M-Cap (market
capitalisation) of $ 1.6 trillion (as on November 5, 2007), whereas
India’s largest company RIL (Reliance Industries Ltd) is having
M-Cap of $ 96.02 billion (as on November 2, 2007).
 
China boasts of having five out of 10 biggest companies of the
world in terms of M-Cap, whereas India has not a single company
listed in top 10 companies of the world in terms of M-cap.
 

Interest Rates Comparision

Nominal interest rate on loan and advances in China is 7.25 per

cent, whereas it is 12.75-13.25 per cent in India.
Real interest rate on loan and advances (interest rate minus
inflation) in China works out to be 3.36 per cent in China, whereas
it is 9.65-10.15 per cent in India.
Deposit rates in China are in the range of 2.07-4.95 per cent,
whereas it is in the range of 7.5-9.6 per cent in India.
One-year yuan lending rate of Peoples Bank of China (China’s
Central bank) is 6.12 per cent, whereas bank rate and reverse repo
rate of RBI is 6 per cent.
Central bank’s prescribed reserve ratio for banks is 13 per cent in
China (October 2007), whereas RBI prescribed 32 per cent (25 per
cent statutory liquidity ratio and 7 per cent cash reserve ratio)
reserve ratio.
 

Trade Data Comparision

China contributes 8 per cent to the world trade, whereas India’s

contribution in the world trade is less than one per cent (0.8 per
cent).
 
China is in surplus in both fiscal and merchandise trade terms,
whereas India was having a trade deficit of $ 21.6 billion in April-
June 2007, which is 7 per cent of India’s GDP.
 
LABOUR FORCE COMPARISION

YEARS CHINA INDIA

2006 784523 457011

2007 792324 465037
2008 799004 474510
2009 805324 484101
2010 811149 493779
2011 816438 503535
2012 821185 513350
2013 825319 523177

From the above graph we can see that China’s Labour Force or
effective manpower is much higher than that of India and is likely
to remain the same over years to [Link] should now opt for
efficient utilization of manpower resources.

SECTORWISE CONTRIBUTION TO GDP

SECTORS CHINA INDIA

Agricultural 11.30% 17.50%

Industrial 48.60% 20%

service 40.10% 62.50%

The above graph shows the growth rates in primary [Link]

evident from the graph that China is leading India in the Industrial
sector whereas India is more competent in Agriculture and service
sector.
FDI(Foreign Direct Investment)

The FDI database presents aggregate inflows, outflows, inward

stocks and outward stocks of foreign direct investment (FDI) for
196 reporting economies . Lets have a look at the FDI of India and
China.

INDIA(LAST 5 YRS DATA)

year 2004 2005 2006 2007 2008

5771 38183 7606 44458 20336 70282 25127 105429 41554 123288
FDI
inward
2179 7759 2978 10033 14344 26799 17281 44080 17685 61765
FDI
outward

CHINA(LAST 5 YRS DATA)

year 2004 2005 2006 2007 2008
FDI 34032 453031 33618 523186 45054 742368 54365 1177461 63003 835764
inward

FDI 45716 403094 27201 471289 44979 677109 61119 1011150 59920 775920
outward
India:

China:

GDP per capita

The per Capita PPP in China is much higher than
countries in South Asia within South Asia Sri Lanka is
way ahead of all other nations followed by India and
then Bangladesh and Pakistan Economic Inequalities
Even the per Capita GDP expressed in PPP does not
reflect the distribution of wealth One index is the
fraction of the population under a nation s poverty line
South
Value of China s gross national product GNP may be
 
the second largest in the world by 2020 For similar
reasons the value of India s output could match that of
a large European country Here are the predictions of
Dinocrat 1 In 15 20 years assuming no calamity the
world s GNP will be around twice as large as it is today
and China s economy will be roughly the size of
GROWTH RATES OF IMPORTS
INDIA and CHINA:

year 2004 2005 2006 2007 2008

Imports 37.51 43.16 22.68 22.83 35.99
(india)
Imports 35.97 17.59 19.95 20.74 18.55
(china)

The imports of China has considerably gone down since 2004 but
we can see considerable fluctuation in the imports of India.
GROWTH RATES OF EXPORTS

INDIA and CHINA:

year 2004 2005 2006 2007 2008

Exports 29.99 29.97 21.32 20.30 21.64
(india)
Exports 35.39 28.42 27.22 25.63 17.31
(china)

The exports of both the countries has gone down since 2004.
POPULATION(COMPARISION)
POPULATION GROWTH RATE
YEAR 2000-05 2005-10 2010-15 2015-20
INDIA 1.62 1.43 1.27 1.09
CHINA 0.7 0.62 0.609 0.49

In 2030 ,China’s population growth rate would be (-

0.002) whereas India’s growth rate would be (0.57).It
has been estimated that India’s population would
exceed China’s by 2030.
COMPARISIONS BASED ON ECONOMIC AND
SOCIAL FACTORS

No. Economic or Social factor Unit of measurement China India

1. Total Area (out of which millions of sq km 9.60 (2.8%) 3.29 (9.5%)
water)
2. Arable Land millions of sq km 1.48 1.79
3. Irrigated Land millions of sq km 0.53 0.61
4. Railways - length in km '000 71.90 63.23
5. Roadways - paved - length in km '000 1,447 2,411
6. Waterways - length in km '000 123 14.5
7. Natural Gas - Proved in billion cu m 2,530 854
Reserves
8. Oil - Proved Reserves billion bbl 18.60 5.70
9. Airports - numbers 489/389/89 334/239/995
Total/paved/unpaved
10. Coastline in km 14,500 7,000
11. Steel Production million tons/year 280 45
12. Food grain production million tons/year 418 210
13. Cement Production million tons/year 650 150
14. Crude Oil production million tons/year 180 40
15. Coal Production million tons/year 1,300 300
16. Electricity generated Billions of Kilowatts 2,190 557
17. Transmission & distribution as % of total power 6.8 23.4
losses
18. Electricity tariff US$ / 100 KW 4 to 5 8 to 10
19. Cost of commercial as % interest/ year 6-7 8 - 16
borrowing
20. Telephone lines connected millions 311 67
21. TV sets in households millions 500 85
22. Mobile/cellular phones millions 400 100
23. Internet users millions 111 51
24. Foreign trade US$ billions/year 1038+923=1961 260
(China+HongKong)
25. External debt (China+Hong US$ billions 242+416= 658 120
Kong)
26. Exports (China+HongKong) US$ billions/year 752+286= 1038 120
27. Imports (China + US$ billions/year 632+291= 923 138
HongKong)
28. Tourist Arrivals millions/year 87 4
29. TV broadcast stations numbers 3240 562
30. Radio broadcast stations AM/FM/short wave 369/259/49 153/91/68
31. FDI inflow (China + Hong US$ billions/year 106 8
Kong)
32. Forex Reserves US$ billions 1017+122= 175
(China+Hong Kong) 1,139
33. GDP (China+Hong Kong) US$ billions 2102+179= 750
2,281
34. GDP Growth (2006) in % rate over last 9.3 7.9
year
35. Labour Composition Agriculture 49/22/29 60/17/23
%/Industry %/
Services %
36. Population millions 1,314 1,095
37. Population increase per year millions 7.2 15.3
38. Birth rate Numbers per 1000 13 22
39. Per Capita income US$ per year/person 1,498 658
40. Life expectancy Years 74 64
41. Investment % of GDP 44 25
42. Poverty line - numbers %/Numbers in 10/131 25/273
millions
43. Inflation Rate % 1.9 4.6
44. Median age Numbar of years 33 25
45. Population Growth Rate % of population 0.59 1.38
46. Infant mortality rate Death Rate per 1,000 23 55
47. GDP (PPP) US$ billions 8,182 3,699
48. GDP (PPP) per person US$ per person/year 6,300 3,400
49. Fertility Rate children 1.73 2.73
born/woman
50. Literacy Rate - Definied as can read & write - % 91 60
age 15 and over of Pop
51. Death Rate Rate per 1,000 pop 6.97 8.18
52. Public Debt % of GDP 29 82
53. Unemployment rate % of workforce 20 30
54. Labour force in millions 797 496
55. People living with '000 (2003) 840 5110
HIV/AIDS
56. Government budget US$ billions 392/424 111/126
Revenues/Expenditure

1 billion = 1000 million, 1 million = 10 lacs, 1 crore = 100 lacs = 10 million

 CONCLUSION
China and India are the world's next major powers. They also offer
competing models of development. It has long been an article of
faith that China is on the faster track, and the economic data bear
this out. The "Hindu rate of growth"-a pejorative phrase referring
to India's inability to match its economic growth with its
population growth-may be a thing of the past, but when it comes to
gross domestic product (GDP) figures and other headline numbers,
India is still no match for China.

However, the statistics tell only part of the story-the

macroeconomic story. At the micro level, things look quite
different. There, India displays every bit as much dynamism as
China. Indeed, by relying primarily on organic growth, India is
making fuller use of its resources and has chosen a path that may
well deliver more sustainable progress than China's FDI-driven
approach. "Can India surpass China?" is no longer a silly question,
and, if it turns out that India has indeed made the wiser bet, the
implications-for China's future growth and for how policy experts
think about economic development generally-could be enormous.

The Indian diaspora has famously distinguished itself in

knowledge-based industries, nowhere more so than in Silicon
Valley. Now, India's brightening prospects, as well as the changing
attitude vis-à-vis those who have gone abroad, are luring many
nonresident Indian engineers and scientists home and are enticing
many expatriate business people to open their wallets. With the
help of its diaspora, China has won the race to be the world's
factory. With the help of its diaspora, India could become the
world's technology lab.
China and India have pursued radically different development
strategies. India is not outperforming China overall, but it is doing
better in certain key areas. That success may enable it to catch up
with and perhaps even overtake China. Should that prove to be the
case, it will not only demonstrate the importance of homegrown
entrepreneurship to long-term economic development; it will also
show the limits of the FDI-dependent approach China is pursuing.
 BIBLIOGRAPHY

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Economic Times

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