INDIA VS CHINA
India and China are core competitors in Asia region, economically and strategically both nations are struggling for dominance. Recent slowdown in china filled our analyst with euphoria, most of them claiming that Tiger beat Dragon somewhere near 2017-18. Perhaps it may come in terms of GDP % .but this % wise comparison would be very opaque for who doesn't belong to economy discipline so it's very much needed to take a look at some actual statistics, before filling ourself of FALSE pride.
comparison between these two Nation is very inevitable, both are competing in same niche for ascendancy. For instance both Nations lack energy security, dependent on other Nations for their oil and gas need.Mainstays of both's economy are Agriculture and demography(labour force),both have big consumer market. Last but not least both are indulged in a territory dispute because of which had a war between them in 1962. But as far as economic concern lets discuss every parameter separately
INDIA and CHINA both are major exporter of wheat,rice,tea,coffee and cotton but China is leading in most of these agriculture commodities .basically China is largest grain producer and exporter of world.
But in comparison it is necessary to mention some facts like India has 46 % of its land under sown area and China has only 15 % . Even if we talk in terms of land area ,for India it is 141 million hectares and for China it is 80 million hectare. Means Indian is way ahead, India also has some more advantages like fertile soil and tropical climate which gives it some more natural potential for agriculture than China. But India's land to productivity ratio is very less than China.
MANUFACTURING-
India's manufacturing share in its GDP is 19% while China's share is nearly~52% but recently Mr.Modi's pet initiative to boost manufacturing"MAKE IN INDIA" raised hope among optimistic economists. How this initiative will effects India is remains to be seen but when china embarked on manufacturing their was no labour laws, no trade Union, so no strikes,neither any other regressive company act nor any other boundations of democracy, not having all these are not good Oman for a democracy but certainly beneficial to shot up countries manufacturing sector's growth. It is stark truth that this is how all major developed countries started growth in time of World War II like Germany,Japan,Russia(erstwhile Soviet Union) and USA.
If we look at government policies, Chinese policies are growth promoting, for instance unlike India Chinese government give subsidy on LPG, Electricity and land for factories and for SEZ so it incentivized growth.while in India we get subsidy for domestic purposes. Nearly 2000 Major SEZs are in China which export a lot every year ,just because of this China is a export driven economy ,they export 59 % out total while India export only 24% of its manufacturing.
India's land rate electricity rates and interest rates are highest in the world comparative to other countries like U.K ,USA and Germany
India's manufacturing share in its GDP is 19% while China's share is nearly~52% but recently Mr.Modi's pet initiative to boost manufacturing"MAKE IN INDIA" raised hope among optimistic economists. How this initiative will effects India is remains to be seen but when china embarked on manufacturing their was no labour laws, no trade Union, so no strikes,neither any other regressive company act nor any other boundations of democracy, not having all these are not good Oman for a democracy but certainly beneficial to shot up countries manufacturing sector's growth. It is stark truth that this is how all major developed countries started growth in time of World War II like Germany,Japan,Russia(erstwhile Soviet Union) and USA.
If we look at government policies, Chinese policies are growth promoting, for instance unlike India Chinese government give subsidy on LPG, Electricity and land for factories and for SEZ so it incentivized growth.while in India we get subsidy for domestic purposes. Nearly 2000 Major SEZs are in China which export a lot every year ,just because of this China is a export driven economy ,they export 59 % out total while India export only 24% of its manufacturing.
India's land rate electricity rates and interest rates are highest in the world comparative to other countries like U.K ,USA and Germany
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| GIVEN DATA is of 2006-07 |
SERVICE SECTOR-
as far as service sector is concerned India is doing well ,we are rising power in design, software, outsourcing and precision industry. India's service sector contribute 51% in its GDP while China's share is 41 %.
All leading credit rating agencies including IMF and World Bank saying India will overtake China soon in terms of GDP percentage but still there is something important to keep in mind that China is 10.35 trillion dollars economy because of 10 % average growth rate since its economic reforms 1978 and india is 2.047 trillion dollars economy.
So even if India growth at 10 % ratetill 2035 ,It Would Still Be 15.5 trillion dollar economy with the compound growth rate which will still be lower than Chinese economy's anticipated growth till 2035 at lowest level
India's population growth is almost double of China (1.55 %of india and 0.66 % of China ) and by 2025 India may overtake China as world's most populous country .which means the per capita GDP gap widen further with comparison to China and western countries. India's per capita GDP is 1625.64 dollar and for China is 7572.36 dollar so finally to beat China soon India has to seize its demographic dividend with a fine economic strategy and better policy
as far as service sector is concerned India is doing well ,we are rising power in design, software, outsourcing and precision industry. India's service sector contribute 51% in its GDP while China's share is 41 %.
So even if India growth at 10 % ratetill 2035 ,It Would Still Be 15.5 trillion dollar economy with the compound growth rate which will still be lower than Chinese economy's anticipated growth till 2035 at lowest level
India's population growth is almost double of China (1.55 %of india and 0.66 % of China ) and by 2025 India may overtake China as world's most populous country .which means the per capita GDP gap widen further with comparison to China and western countries. India's per capita GDP is 1625.64 dollar and for China is 7572.36 dollar so finally to beat China soon India has to seize its demographic dividend with a fine economic strategy and better policy
Hey Prathvi, You have explained very nicely and precisely about all the economic sectors of both the countries , China economically is way too ahead of India, but there still is hope , as India beign the only in world to have highest youth population of 356 million !! Although we are less populated then China , China still is on second number for the youth population in the world .
ReplyDeleteLet's hope the youth together can bring emmense change nd growth to our country.
Hi prithvi, this is very good for our knowledge also this type of blogs can improve and increase our mind set to divert towards what is going on now a days, so thank you so much for this blog.
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