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Priyanka Sahoo
Saptasindhu Basu
Rick Bose
Rahul Singh
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Keshav Goyal
Kaushik Agarwal
Nalin Singhal
INDIAN ECONOMY
VERSUS
CHINESE
ECONOMY: AN
ANALYSIS
INTRODUCTI
ON
India and China, two of the Asian giants
have locked horns against one another to
become a world superpower.
Historically, inevitable comparisons of
economies between these two giants has
shown that China usually emerges on
top. The economists attribute this to the
Chinese fast-acting government
implementing new policies making Indias
political system appear sluggish.
Both countries are consistently analysing
their economic strengths and reinforcing
their political and financial systems to
sustain and establish themselves as a
superpower in the global economy.
PRESENT ECONOMIC STATUS OF INDIA AND
CHINA
Together accounting for 2.5 billion people,
China and India are today the engines of
growth in the midst of rapid economic
transformation in the global economy.
The economies of India and China are
influenced by a number of factors like social ,
political , economic and other factors.
The economy of China is more developed than
that of India. In terms of exchange rates, India
is the 9th largest economy while China is in the
2nd position surpassing Japan. Today, Indias
GDP is estimated at around $1.537 trillion
while Chinas average GDP is around $ 5.878
trillion. Chinas GDP growth has been
marginally yet consistently ahead of its Indian
counterpart. However, India lags far behind
China in the case of per capita GDP.
India enjoys an upper hand in the IT/BPO industry
with the BPO sector alone contributing $49.7 billion
while China earned $35.76 billion.
The Chinese capital market lags behind the Indian
capital market in terms of predictability and
transparency. Owing to the quality of listed
companies and Indias stock markets adhering to the
international guidelines , the Indian stock markets
establish financial transparency and are more stable.
As on date, China lags far behind in the business
forefront owing to its lack of management reform and
its inability to increase mergers and acquisitions with
several organizations across the world. On the other
hand, India has rapidly emerged and is still
expanding its mergers and acquisitions with several
international organizations.
With trade and manufacturing being the key sectors
in the Chinese economy ahead, India still strives to
strike the perfect balance between its service,
manufacturing and trading sectors.
CHALLENGES FACED BY
INDIA
To lead the economy back to the high GDP growth rate of
9 percent per annum.
Handling overpopulation resulting in low per-capita
income and increasing poverty.
High levels of debt and growth in lending by 30%
because of a property boom.
Sharp and growing regional variations among different
states and territories in terms of poverty, availability of
infrastructure and socio-economic development.
Literacy rate of 74% is still lower than the worldwide
average and there exists a severe disparity in literacy
rates and educational opportunities between males and
females, urban and rural areas, and among different
social groups.
Corruption and Unemployment.
CHALLENGES FACED BY CHINA
NPL- Chinese bank loans stood at USD 6500 per
capita in 2014 compared to Gross Domestic Product
(GDP) per capita of USD 4400.
Expansion in economy is bringing inflation and
property boom.
Shortage of Power: More power is required with a
growing Chinese economy.
Growing Income Inequality: Chinas economic growth
has benefitted the south and eastern regions more
creating a growing disparity between north and south
which has led to migration of farmers from north to
south.
Unemployment mainly due to many state-owned
enterprises which are grossly inefficient.
A demographic transition. By 2050, China will be
older and more age-challenged on every important
measure.
COMPARISON OF
INDIAN AND
CHINESE
ECONOMIES UNDER
VARIOUS SECTIONS
NOMINAL GDP(CURRENT
PRICES)
Nominal GDP (Current Prices)
7000
6000
16
14
Year India (% change) China (% change)
12
6
1995 10.225 17.1
4
0
2005 4.246 1.817 1985 1990 1995 2000 2005 2010
70
60
40
1985 9.104 57.348
30
10
1995 18.915 14.679
0
1985 1990 1995 2000 2005 2010
2000 0.127 24.796
-10
35
30
Year India (% change) China (% change)
25
10
1995 12.972 18.225
5
35
30
Year India (% change) China (% change)
25
1985 0 25.322
20
0
2005 18.379 17.218 1985 1990 1995 2000 2005 2010
90%
80%
60%
1985 0 3.305
50%
1990 0 6.948
40%
30%
1995 67.393 6.137
20%
0%
2005 78.838 17.635 1985 1990 1995 2000 2005 2010