ASSIGNMENT

Name: Subject: Topic: Comparative study of China and India Program: Faculty Name: Semester:

INDEX China..3 India5 Difference between China and India7 Conclusion..8

CHINA China today is investing nearly half of its GDP, something that is unprecedented. No other economy at any other time in history has invented capital on that scale. At the peak of its economic miracle, Japan was investing only 30 percent plus of its GDP; but China is investing 50 percent. The success of command and control capitalism in China has set off a vigorous debate over which political system is most likely to produce a vigorous debate over which political system that matters, it is the stability of the system and even more important, whether the leaders running it understand the basics of economic reform. The chance that any particular system-democratic, authoritarian, or any other-will have a positive impact on a countrys breakout potential is about 50/50. The economists who are most bullish on China predict the economy will grow by 15 percent in dollar terms every year or 8 percent growth in GDP plus 5% appreciation of Yuan and 3 to 4 percent inflation, which would be enough for china to eclipse the Unites States in a decade. In the last decade, the main driver of Chinas boom was a surge in the investment share of GDP from 35 percent to almost 50 percent. Investment Spending includes everything from transportation and telecommunication networks to office buildings and equipments, factories and factory machinery. Due to one child policy in 1979 and the end of significant baby booms, the result is that only five million people between the ages of thirty-five and forty-four will join Chinas core labor force this decade, versus ninety million in the previous decade. So China is losing its edge in youth. For decades the population of the very old and very young had been decreasing. For overcoming this hassle But China on 28 December 2013 formally allowed parents to have a second child. The first major is easing of its 3-decade-old restrictive birth policy. Demographers and policy makers have estimated the
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easing would benefit some 15 million to 20 million Chinese parents mostly in cities and result in 1 million to 2 million extra births per year in the first few years, on top of the 16 million babies born annually in China. They say the easing is so incremental that the extra births are not expected to strain resources such as the health care and education. The aging of the population will put pressure on the working class to increase its productivity, and the shrinking labor pool will put pressure on businesses to raise wages. The declining size of its workforce is the key reason for wage-driven inflation. As of late 2011, the average wage was rising at an average annual rate of about 15 percent. A sudden rise in factory wages was the most important warning sign that at the peak of their boom decades, economic growth in Japan, Korea and Taiwan was about to show sharply. China is hitting that same point. Sharply increasing wages call into serious question of the future of a Chinese economy built on cheap labor and export. Rising wages are compelling manufacturers to move plants to cheaper labor markets like Indonesia and Bangladesh. Developers in China are building ghost cities. Property prices in premier Chinese cities doubled between 2003 and 2008, then jumped by another 40 percent in 2009 and 2010, making houses increasingly unaffordable for the vast majority of the locals. Chinese men cant find a mate as they cant afford a house. 70 percent of single Chinese women say that the first thing they look for in a man is the deed to an apartment. The average Chinese workers cannot afford the property in China. Baidu is the search engine in China and Beijing is the capital of China.

INDIA India has more than 5000 listed companies, including more than a thousand in which foreigners have invested and nearly 150 with total stock market values of over $ 1 billion. In stock market, about listed companies- Indias market has everything, from cars to drug companies. The conventional view is that India will be able to put all those people to work because of its relatively strong educational system, entrepreneurial zeal and strong links to the global economy. In the 1990s India economy grew at about 5.5 percent per year, not much faster than in the 1980, but the reforms prepared India to take off in the global boom that dawned in 2003 with the sudden surge of easy money flowing out of the West. Indias growth rate rose to nearly 9 percent per year between 2003 and 2007, the second- fastest rate of expansion in the world, after China. In 2000 there were no Indian Tycoons among the Worlds top one hundred billionaires and now there are seven, more than all but three countries: the United States, Russia and Germany. In this category, India Outranks China (with one) and Japan (with zero). A recent survey by the consulting firm Aon Hewitt shows that salaries of urban workers are rising faster in India than anywhere else in Asia, with average wages increasing by nearly 13 percent in 2011. Per Capita Income is about $ 1400 in India. There are three layers of life in India: the increasingly cosmopolitan cities, the faceless towns and the often desperate villages. India is the largest pool of talent. India is the most important places in the world to do more knowledge work, ranging from managing business processes to running information technology systems. India has the ability to change companies cost structures and add several hundred basis points to their profitability

The second plus is the intrinsic strength of the economy. It is difficult to ignore the progress that India has made over the past three decades. Several reason account for these economic gains, such as ambitions and drive of Indias youthful population- the so called demographic dividend. A healthy savings rate as well as rising rural incomes driven by pricing support for crops, significant improvements in literacy and education, a culture of entrepreneurship and improvisation, a competent managerial class, a reasonably sound banking system and capital market and a fair and activist supreme court have contributed as well. India is among the three largest publishers of English books in the world, next to the US and UK.

Difference between China and India

BASIS GDP (Gross Domestic Product )

CHINA 8.227 trillion USD (2012)

INDIA 1.842 trillion USD (2012)

Population

1.35 billion

1.237 billion

Per Capita Income

6,091 $

Rs 74,920

Type of economy

Capitalist economy

Mixed economy

Banks

China has four banks in world top 10 lists.

India does not have even a single bank in world top 50 banks. Present in Indians youth

Entrepreneurial Zeal

Does not present in china youth

FDI Inflow

$ 117.6 billion

$ 28 billion

Conclusion: China is the fastest growing economy and India is the second largest growing economy in the world. China is the second biggest consumer of oil. It is the largest producer of electronics and computer components. It is also second largest producer of electricity after the US. China is far better from India in terms of Infrastructure facility, Railway Facility and Health Industry. People in India have strong entrepreneurial zeal. Not a single billionaire in China has a net worth of more than $ 10 billion; compare to eleven billionaires with a net worth of more than $ 10 billion in Russia and six in India, which have far smaller economies. But, India lacks the politicians who have strong leadership quality and free from corrupt. China has its 4 banks in top 10 Banks list of the world, but India dont even have a single bank in top 50 banks of world. Today, we cannot even compare a city or state of India with China. In Agriculture sector also, India is far behind than China. Only Gujarat is the state who is competing with China in this sector. After all, as the Chinese proverb goes, A dead camel is still larger than a horse. The bigger picture is that the Chinese economy is now so large-worth around $ 8 trillion a year-that even at a 6 percent growth rate, it will remain the largest single contributor to global growth in the coming years.