3. Source CIA World Factbook
India China
Population (July 2006) 1.1 b (1.38% ) 1.3 (0.59%)
GDP (exh rate) (2006) $796.1 billion $2.512 trillion
GDP (PPP) $4.042 trillion $10 trillion
GDP Real Growth 8.5% 10.5%
Per Capita GDP $3,700 $7,600
Agriculture 19.9% 11.9%
Industry 19.3% (g = 7.5%) 48.1% ( g = 22.9%)
Services 60.7% 40%
Labor Force 509.3 million 798 million
Inflation rate (CPI) 5.3% 1.5%
Investment 29.2% of GDP 44.3% of GDP
Debt - external $132.1 billion $305.6 billion
5. Why China is growing fast?
Prior to the 1978 reforms, nearly four in five Chinese worked in
agriculture; by 1994, only one in two did.
6. Pillars of Performance
Chinese reforms started with agriculture.
Incentive to use underutilized land and labor resources
intensively.
When rural incomes rose, the demand for non-agricultural
output increased proportionately.
Labor-intensive manufactures for export promotion
by developing infrastructure mainly in the southern
coastal cities using FDI
Diaspora to substitute lack of local entrepreneurship
& technology
7. Pillars of Performance …
Marry Chinese cheap labor resources with
Hong Kong's market-based institutions,
business organizations and supply chain
networks to make a successful entry into the
world market
19. Red Indian
How will India rein in its fiscal deficit?
How will India discipline its political class?
How will India deregulate its over-regulated
economy?
23. Chinese Whisper
Infirmities in its microeconomic, institutional and
entrepreneurial bases raise doubts on the sustainability of
its superior performance.
High capital-output ratio suggests excess capacities, and
probably misallocation and wastage of capital resources.
Industrial structure fragmented by scale and location
leading to poor efficiency
Legal framework of business is still rudimentary
Lack entrepreneurial groups
Collapse of D'Long - China's largest private company
with operations worldwide
24. China’s Capi-toll
Capital stock grew by nearly 7 percent a year
over 1979–94
But capital-output ratio has hardly budged.
Production of goods and services per unit of
capital remained about the same.
Financing of unprofitable investment – Political
rather than economic decision logic!
NPA between 25 – 50% of GDP
