presentaion on economic deveopment of china and india

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presentaion on economic deveopment of china and india

  1. 1. CONTENTS…..CONTENTS….. Introduction Recent Development History Problems of Chinese Economy Problems of Indian Economy Strengths of Indian Economy Growth of China and India and its Influenceon the World Economy Policy and Implications Present Economy of India Present Economy of China
  2. 2. INTRODUCTION• Both are world’s mostancient civilizations• Chinese built 4000-mileGreat Wall some 2000years ago• Invented bureaucracy
  3. 3. Conti…..Indian contributions to :-• Algebra• Textile• Chemistry• Medicine• Metallurgy and• Astronomy in the Ancientand Medieval periods
  4. 4. Conti…..• India and China, lost their edge somewhere duringthe 16th and 17th centuries• Contacts between these two civilizations ceasedduring the colonial period because the new rulersof the world did not encourage such contacts.• When the contacts revived, they turned intoconflict and hostility over rival territorial claims inthe Himalayan region, the Chinese annexation ofTibet, and the Exile of Dalai Lama into(Dharamshala) India
  5. 5.  India became independent peaceful transitionof sovereignty from Britain in 1947 China had a proletarian revolution in 1949 Both democratic India and Communist Chinaembarked upon ambitious science,technology, and economic developmentprograms through centralized planning. That relationship began to crack in 1962because of the USSR’s reluctance to transfernuclear technology to the Peoples Republic
  6. 6. Conti….. China continued its isolation and sufferedserious stagnation for 20 or so more years The Indian economy began to open its doora bit more widely by the middle of the 1980s It missed 20 years of the IT revolution that wassweeping the world and driving the globaleconomyIBM and Coca-Cola were kicked out ofIndia in the middle of 1970s. 
  7. 7. Conti…. Chinese economy has been growing atabout9-10% per year (1980) GDP per capita of China is the world’s 4thlargest economy, overtaking Japan withinnext 5-10 years India has left behind its “Hindu growth rate”of 3% to hit an annual growth rate of 8+%.  India’s per capita GDP - 12th largest, 4thlargest in the world in terms of purchasingpower parity
  8. 8. Problems of ChineseeConomiC Growth…?1.Pollution2.Shortage of Power3.Growing Income Inequality.4.Property Boom5.Inefficient Banking Sector.6. Unemployment7. Undervaluation of Yuan.8.Overheating Economy.9. Huge Balance of PaymentsSurplus.
  9. 9. Problems faCinGindian eConomy…?1. Inflation. (7-8%)2. Poor educational standards.3. Poor Infrastructure.4. Balance of Paymentsdeterioration.5.High levels of debt6.Inequality has risenrather than decreased.7.Large Budget Deficit.8.Rigid labor Laws.
  10. 10. Strengths of IndianEconomy• Demographics of India arefavorable.• There is much scope forincreases in efficiency.• India is well placed tobenefit from globalizationand outsourcing.• Positive Growth Forecasts
  11. 11. Conti….. If the US finds itself more at ease with India,rather than China, it makes perfect sense. Both are successful, open, and largedemocracies with sound, viable democraticinstitutions as well as independent media andjudiciary
  12. 12. Growth of China and Indiaand its Influence on theWorld Economy!! Indicators of the Extent of Integration inWorld Markets for Goods and Services Shares of China and India in Global GDP andits Growth Sources and Sustainability of Growth• Factor Accumulation• Growth in Total Factor Productivity• External Capital Inflows
  13. 13. Policy Implications• Chinese GDP growth since 1980 - 9%• Indias GDP growth since 1980 - 6%• With populations of 1.3 and 1.1 billion in2003, they present huge & fast growingdomestic market for a range of goods andservices,• and export opportunities for producers in therest of the world.
  14. 14. Conti….•Acceleration of global grTheirincreasing competition for theworld’s raw materials and theirincreasing shares in the globalmarkets for a range of goods andservices, is a threat to theirprosperity and growth.•Growth would increase thedemand for transport and shipping.
  15. 15. Present Economy of IndiaPresent Economy of IndiaIndia is developing into an open-market economy, yet traces of its past autarkic policiesremain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in theearly 1990s and has served to accelerate the countrys growth, which has averagedmore than 7% per year since 1997. Indias diverse economy encompasses traditionalvillage farming, modern agriculture, handicrafts, a wide range of modern industries, anda multitude of services. Slightly more than half of the work force is in agriculture, butservices are the major source of economic growth, accounting for nearly two-thirds ofIndias output, with less than one-third of its labour force. India has capitalized on its largeeducated English-speaking population to become a major exporter of informationtechnology services and software workers. In 2010, the Indian economy reboundedrobustly from the global financial crisis - in large part because of strong domesticdemand - and growth exceeded 8% year-on-year in real terms. However, Indiaseconomic growth began slowing in 2011 because of a tight monetary policy, intendedto address persistent inflation, and a decline in investment, caused by investor pessimismabout domestic economic reforms and about the global situation. High internationalcrude prices have exacerbated the governments fuel subsidy expenditures, contributingto a higher fiscal deficit and a worsening current account deficit. In late 2012, the IndianGovernment announced reforms and deficit reduction measures to reverse Indiasslowdown. The outlook Indias medium-term growth is positive due to a young populationand corresponding low dependency ratio, healthy savings and investment rates, andincreasing integration into the global economy. India has many long-term challengesthat it has not yet fully addressed, including poverty, inadequate physical and socialinfrastructure, limited non-agricultural employment opportunities, inadequate availabilityof quality basic and higher education, and accommodating rural-to-urban migration.
  16. 16. Present Economy of ChinaSince the late 1970s China has moved from a closed, centrally planned system to a moremarket-oriented one that plays a major global role - in 2010 China became the worldslargest exporter. Reforms began with the phasing out of collectivized agriculture, andexpanded to include the gradual liberalization of prices, fiscal decentralization, increasedautonomy for state enterprises, creation of a diversified banking system, development ofstock markets, rapid growth of the private sector, and opening to foreign trade andinvestment. China has implemented reforms in a gradualist fashion. After keeping itscurrency tightly linked to the US dollar for years, in July 2005 China revalued its currency by2.1% against the US dollar and moved to an exchange rate system that references abasket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbiagainst the US dollar was more than 20%, but the exchange rate remained virtually peggedto the dollar from the onset of the global financial crisis until June 2010, when Beijingallowed resumption of a gradual appreciation. The restructuring of the economy andresulting efficiency gains have contributed to a more than tenfold increase The Chinesegovernment is seeking to add energy production capacity from sources other than coaland oil, focusing on nuclear and alternative energy development. In 2010-11, China facedhigh inflation resulting largely from its credit-fuelled stimulus program. Some tighteningmeasures appear to have controlled inflation, but GDP growth consequently slowed tounder 8% for 2012. An economic slowdown in Europe contributed to Chinas, and isexpected to further drag Chinese growth in 2013. Debt overhang from the stimulusprogram, particularly among local governments, and a property price bubble challengepolicy makers currently. The governments 12th Five-Year Plan, adopted in March 2011,emphasizes continued economic reforms and the need to increase domestic consumptionin order to make the economy less dependent on exports in the future. However, China hasmade only marginal progress toward these rebalancing goals.
  17. 17. PRESENTED BY:MonikshaMeghaKanchanKhushbuClass: X C

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