COMPARISION BETWEEN INDIA & CHINA
GROUP 5
Managerial Economics
7/29/12
INTRODUCTION
?
This presentation is not intended as a political comment, but instead focuses on the bare facts of the economic status of the two countries. It’s a fiscal showdown with two of the fastest growing economies in the world.
?
7/29/12
Comparing India China on the basis of GDP
7/29/12
INDIA GDP RATE
?
India's average annual economic growth rate is expected to stand at about 8%
?
India’s GDP growth for 2010-11 is expected for 8.5 to 9.6%
7/29/12
YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 7/29/12 2009
GROWTH (%) 5.5 6.0 4.3 4.3 8.3 6.2 8.4 9.2 9.0 7.4
CHINA GDP RATE
?
It is predicted to grow with 9.5 percent for the period of 2011-2015. China now has the world's second largest nominal GDP at 39.8 trillion Yuan
7/29/12
?
YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 7/29/12
GROWTH RATE (%) 7.6 7.5 8.1 9.3 9.4 10.7 12.0 13.6 9.1 8.6
7/29/12
Foreign exchange reserves
Foreign exchange reserves are stores of international currency held by the central banks of nations around the world. The primary purpose of the foreign exchange reserve is for the international settlement of debts and payments between governments (also called as forex reserves)
7/29/12
Foreign Exchange Reserve from 2001-10
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
7/29/12
India (in US billion) 42.2 54.1 76.1 113.0 141.5 151.6 199.9 309.7 251 278
China (in US billion) 212.2 286.4 403.3 609.9 818.9 1066.3 1528.2 1946.0 2399.2 2454.3
12
10
8
6
4
2
0 Years 7/29/12
?
INDIA The quantum of reserves rose impressively to US $ 113.0 billion by the end of March 2004. In March 2005 the reserves touched US $ 141.5 billion, US $ 151.6 billion in 2006 March.
7/29/12
? Ø
CHINA The World Trade Organization (WTO) in 2001 contributed to rapid growth in imports, but exports also expanded at a fast pace, while FDI inflows exceeded US$ 60 billion a year by 2004 - 2006. In October 2006, China's foreign
Ø
Ø
Ø
?
INDIA It rose further to US $199.9 billion by the end of March 2007. The reserves have further increased and shot up to US $ 309.7 billion, end March 2008. Thereafter the reserves declined to US $ 251 billion by end March 2009.
7/29/12
? Ø
CHINA By the end of September 2008, the reserves topped US $ 1.9 trillion, equal to nearly US $ 1, 500 per head for the entire population of China. It remained around this level until the end of 2008 as trade growth slowed and
Ø
Ø
Ø
?
INDIA The reserve accumulation picked up since then and stands at US $ 278 billion as on 5 March 2010. The growth of reserves .This unparalleled rise in reserves may be attributed mainly to increased foreign 7/29/12 capital inflows in the
? Ø
CHINA Then, as 2009 progressed , the upward march resumed, with reserves rising above US $ 2 trillion in April and reaching a record US $2, 272.585 billion at the end of September
Ø
Ø
Current issues
China Plans World's Biggest Dam on Brahmaputra River
7/29/12
Ø
China has admitted that it is building a dam on the Yarlung Zangbo River.
Ø
The river originates in Tibet, but then flows into India where it is called Brahmaputra and is a major water source for millions of people.
7/29/12
Ø
Moreover, the dam will be built in the area near the border disputed between the two countries.
Ø
India is however very worried about the plan, fearing a decrease in the flow of the river water in India and the destruction of the Himalayas ecosystem. In this project China will directly control more than 90,000 sq m of land the sovereignty of which is disputed between India and China.
Ø
7/29/12
Human Development Index
7/29/12
INDIA HDI
?
The country ranks a low 119 among 169 countries on the 2010 Human Development Index.
YEAR 2000 2004 2005 2006 2007 2010
7/29/12
RANK 124 126 128 132 134 119
CHINA HDI
?
China has been ranked much higher at 89 on the index published annually by the United Nations Development Programme.
YEAR 2000 2005 2010
7/29/12
RANK 96 81 89
INFLATION
In economics, the word “inflation” refers to a general rise in prices measured against a standard level of purchasing power.
7/29/12
? ?
INDIA
?
?
CHINA
The inflation rate in India was last reported at 9.47 percent in December of 2010. India's annual inflation rate fell to a new low this year in the week ended October 6 largely due to stable energy 7/29/12 costs, abundant grain
The inflation rate in China was last reported at 4.9 percent in January of 2011. As a result, China has gone from being poorer than India in the 1970s to having over twice the per capita income today. Even now, the narrowing of the gap is questionable at best, as India is amazingly
?
?
Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
INDIA
3.779 4.297 3.806 3.767 4.246 6.177 6.372 8.349 10.882 13.187
CHINA
0.4% 0.8% -0.8% 1.2% 4.1% 4.1% 1.7% 4.7% 6% 5.9%
7/29/12
7/29/12
INVESTMENT
?
Investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns
7/29/12
? ?
INDIA The Indian economy has witnessed a paradigm shift since the last decade and is on a robust growth trajectory. Today, the Indian economy boasts a stable annual growth rate, booming capital markets, and rising foreign exchange 7/29/12 reserves.
? ?
CHINA China needs to maintain a high level of investment to keep the economy growing at a healthy clip. Xie Fuzhan, commissioner of the National Bureau of Statistics, said that China needed large amounts of investment because it was still undergoing
International Market
7/29/12
INDIA
?
While, India is the 11th largest economy in terms of the exchange rates. The Indian capital or stock market is both transparent and predictable. India has Asia's oldest stock exchange which is the BSE or the Bombay Stock Exchange.
7/29/12
?
7/29/12
CHINA
?
The economy of China is more developed than that of India. China occupies the second position surpassing Japan. Tax incentives are one area where China is lagging behind India. The Chinese capital market lags behind the Indian capital market in terms of predictability and transparency.
?
7/29/12
7/29/12
CONCLUSION
?
India is already on its way to becoming a developed country. India is growing all the time and it is only a matter of time before it is a "developed nation". It's economy is one of the fastest growing in the world10 things that it needs to do in order to achieve its potential and grow 40 times by 2050. China has achieved rapid economic 7/29/12 development in the past 20 years and has been
?
THANK YOU
7/29/12
doc_420862005.pptx
GROUP 5
Managerial Economics
7/29/12
INTRODUCTION
?
This presentation is not intended as a political comment, but instead focuses on the bare facts of the economic status of the two countries. It’s a fiscal showdown with two of the fastest growing economies in the world.
?
7/29/12
Comparing India China on the basis of GDP
7/29/12
INDIA GDP RATE
?
India's average annual economic growth rate is expected to stand at about 8%
?
India’s GDP growth for 2010-11 is expected for 8.5 to 9.6%
7/29/12
YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 7/29/12 2009
GROWTH (%) 5.5 6.0 4.3 4.3 8.3 6.2 8.4 9.2 9.0 7.4
CHINA GDP RATE
?
It is predicted to grow with 9.5 percent for the period of 2011-2015. China now has the world's second largest nominal GDP at 39.8 trillion Yuan
7/29/12
?
YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 7/29/12
GROWTH RATE (%) 7.6 7.5 8.1 9.3 9.4 10.7 12.0 13.6 9.1 8.6
7/29/12
Foreign exchange reserves
Foreign exchange reserves are stores of international currency held by the central banks of nations around the world. The primary purpose of the foreign exchange reserve is for the international settlement of debts and payments between governments (also called as forex reserves)
7/29/12
Foreign Exchange Reserve from 2001-10
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
7/29/12
India (in US billion) 42.2 54.1 76.1 113.0 141.5 151.6 199.9 309.7 251 278
China (in US billion) 212.2 286.4 403.3 609.9 818.9 1066.3 1528.2 1946.0 2399.2 2454.3
12
10
8
6
4
2
0 Years 7/29/12
?
INDIA The quantum of reserves rose impressively to US $ 113.0 billion by the end of March 2004. In March 2005 the reserves touched US $ 141.5 billion, US $ 151.6 billion in 2006 March.
7/29/12
? Ø
CHINA The World Trade Organization (WTO) in 2001 contributed to rapid growth in imports, but exports also expanded at a fast pace, while FDI inflows exceeded US$ 60 billion a year by 2004 - 2006. In October 2006, China's foreign
Ø
Ø
Ø
?
INDIA It rose further to US $199.9 billion by the end of March 2007. The reserves have further increased and shot up to US $ 309.7 billion, end March 2008. Thereafter the reserves declined to US $ 251 billion by end March 2009.
7/29/12
? Ø
CHINA By the end of September 2008, the reserves topped US $ 1.9 trillion, equal to nearly US $ 1, 500 per head for the entire population of China. It remained around this level until the end of 2008 as trade growth slowed and
Ø
Ø
Ø
?
INDIA The reserve accumulation picked up since then and stands at US $ 278 billion as on 5 March 2010. The growth of reserves .This unparalleled rise in reserves may be attributed mainly to increased foreign 7/29/12 capital inflows in the
? Ø
CHINA Then, as 2009 progressed , the upward march resumed, with reserves rising above US $ 2 trillion in April and reaching a record US $2, 272.585 billion at the end of September
Ø
Ø
Current issues
China Plans World's Biggest Dam on Brahmaputra River
7/29/12
Ø
China has admitted that it is building a dam on the Yarlung Zangbo River.
Ø
The river originates in Tibet, but then flows into India where it is called Brahmaputra and is a major water source for millions of people.
7/29/12
Ø
Moreover, the dam will be built in the area near the border disputed between the two countries.
Ø
India is however very worried about the plan, fearing a decrease in the flow of the river water in India and the destruction of the Himalayas ecosystem. In this project China will directly control more than 90,000 sq m of land the sovereignty of which is disputed between India and China.
Ø
7/29/12
Human Development Index
7/29/12
INDIA HDI
?
The country ranks a low 119 among 169 countries on the 2010 Human Development Index.
YEAR 2000 2004 2005 2006 2007 2010
7/29/12
RANK 124 126 128 132 134 119
CHINA HDI
?
China has been ranked much higher at 89 on the index published annually by the United Nations Development Programme.
YEAR 2000 2005 2010
7/29/12
RANK 96 81 89
INFLATION
In economics, the word “inflation” refers to a general rise in prices measured against a standard level of purchasing power.
7/29/12
? ?
INDIA
?
?
CHINA
The inflation rate in India was last reported at 9.47 percent in December of 2010. India's annual inflation rate fell to a new low this year in the week ended October 6 largely due to stable energy 7/29/12 costs, abundant grain
The inflation rate in China was last reported at 4.9 percent in January of 2011. As a result, China has gone from being poorer than India in the 1970s to having over twice the per capita income today. Even now, the narrowing of the gap is questionable at best, as India is amazingly
?
?
Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
INDIA
3.779 4.297 3.806 3.767 4.246 6.177 6.372 8.349 10.882 13.187
CHINA
0.4% 0.8% -0.8% 1.2% 4.1% 4.1% 1.7% 4.7% 6% 5.9%
7/29/12
7/29/12
INVESTMENT
?
Investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns
7/29/12
? ?
INDIA The Indian economy has witnessed a paradigm shift since the last decade and is on a robust growth trajectory. Today, the Indian economy boasts a stable annual growth rate, booming capital markets, and rising foreign exchange 7/29/12 reserves.
? ?
CHINA China needs to maintain a high level of investment to keep the economy growing at a healthy clip. Xie Fuzhan, commissioner of the National Bureau of Statistics, said that China needed large amounts of investment because it was still undergoing
International Market
7/29/12
INDIA
?
While, India is the 11th largest economy in terms of the exchange rates. The Indian capital or stock market is both transparent and predictable. India has Asia's oldest stock exchange which is the BSE or the Bombay Stock Exchange.
7/29/12
?
7/29/12
CHINA
?
The economy of China is more developed than that of India. China occupies the second position surpassing Japan. Tax incentives are one area where China is lagging behind India. The Chinese capital market lags behind the Indian capital market in terms of predictability and transparency.
?
7/29/12
7/29/12
CONCLUSION
?
India is already on its way to becoming a developed country. India is growing all the time and it is only a matter of time before it is a "developed nation". It's economy is one of the fastest growing in the world10 things that it needs to do in order to achieve its potential and grow 40 times by 2050. China has achieved rapid economic 7/29/12 development in the past 20 years and has been
?
THANK YOU
7/29/12
doc_420862005.pptx