This document compares the economies of India and China over the past 50 years since they were both among the poorest countries. It outlines key differences in their political systems, growth rates, areas of specialization, and economic indicators. China adopted economic reforms earlier in 1978 and has grown faster at 9.5% annually compared to India's 6% growth. While China dominates manufacturing, India is rising in services. Both countries continue facing challenges to transitioning their economies and maintaining growth.

1. A Comparative Analysis

2. ECONOMIES OF BOTH COUNTRIES
Market based system
Foreign trade and foreign
investment are integral part of
Indian economy
Fastest growing economy
World’s second largest labor
force
Centrally planned Economy
Private businesses and
capitalism were suppressed
Privatization of Farmland
Promotion of foreign
investment
Flourishing small scale
entrepreneurs

3. 50 yrs ago, India and China were among the poorest and
economically most isolated countries in the world.
How did China and India emerge as
economic giants?

4. What are India & China famous for
today?
CALL CENTRES &
COMPUTER ENGINEERS
LOW PRICED
CONSUMER GOODS

5. Comparing India and China’s Growth
Stories
Indicators India China
Political System Multi-party
Democracy
One-party
authoritarian rule
Speed of
Growth
Economic reforms
started in 1991.
Average 6% growth
rate in past two
decades.
Economic reforms
started in 1978.
Average 9.5%
growth rate in past
two decades.
Areas of
Specialization
Rising power in
software, design,
services, and
precision industry.
Dominant in mass
manufacturing,
electronics and
heavy industrial
plants

6. India and china – Economic Fact Sheet
GDP- real growth rate:
INDIA CHINA
7.6% (2015) 6.9% (2015)
7.2% (2014) 7.3% (2014)
GDP – per capita (PPP – Purchasing power parity)
INDIA CHINA
$5,730 (2015 est.) $13,400 (2015 est.)
$5,391 (2014 est.) $12,599 (2014 est.)
GDP – Composition by sector:
INDIA CHINA
agriculture: 16.11% agriculture: 10%
industries: 31.37% industries: 43.9%
services: 52.52% services: 46.1%
(2015 est.) (2015 est.)

7. AGRICULTURAL SECTOR
• 33 million- over 45% of labor
force still makes living from
farming.
• Farming methods have been
improved in China.
• China produces wheat, rice,
potatoes, peanuts, millet, cotton.
• Only 15 percent of the total land
available in China can be
cultivated.
 Growth of service sector is
pushing down the contribution of
agriculture.
 Largely depends on monsoon.
 Provides employment to two-
thirds of the total population.
 15% of export earnings.
 Rural women play a vital role,
50% of rural labor force.

8. MANUFACTURING SECTOR
• India rank’s among top 12 producers of
manufacturing value added products.
• There are many Companies who wants to
make India as their manufacturing hub,
they are:
• LG wants to make India its global
manufacturing hub for its mobile
handsets.
• Hyundai has make India the
manufacturing & exporting hub for its
small cars. Their i10 is being
manufactured only in India & exported
to the world.
• Its economy growth in average of
almost 8% every year.
• Chinese manufacturing sector ranks 4th
in the world after US, Japan, &
Germany.
• China has 50% share of worldwide
camera market & 30% of Air
conditioners .
• 25% of Washing Machines & 20% of
Refrigerators.

9. Service sector
INDIA CHINA
Since 1978 to 2011 :
Average Annual Growth rate is 8.1% Average Annual Growth rate is 10.8%
Employment Opportunities :
Low
Employment Opportunities :
High
Most advanced service sector :
Delhi with a GDP share of 77 per cent
Most advanced service sector :
Beijing with a GDP share of 61 per cent
A net exporter of services A net importer of services

10. India’s Problem
Infrastructure sector.
Insufficient investments.
Losing the best and the brightest abroad.
Constraint's in labor market needed for
manufacturing Industry.

11. China’s Problem
Middle Income Trap (transition from middle income to high
income status).
Ageing population - "one child" policy.
High domestic savings rate and correspondingly low
domestic demand.
As China's per capita income rises, its 1.34 billion people
will increasingly yearn for real freedom: a free press, an
open Internet and, most crucially, democracy.

12. INDIAAND CHINA IN 2020
According to a recent report from international economic
think tanks, India and China soon plans to form a trade
coalition in Asia and that is projected to boost 65% of
world trade by near 2020.Both the countries India and
China are determined to achieve that and create a huge
impact on world economic bodies.

13. India’s long-term prospects look
Stronger
India is no. 1 talent supplier in the world.
India's advantage in having a large pool of
English speaking people.
India has the advantage of having a
vibrant, energetic and creative NGO sector.

14. “Growth has to be aimed within a
relevant country context. India has its
own unique past, a very different
present, and will chart her own
version of the future. In that future,
the most critical component is to keep
democracy safe.”
India shouldn’t try to grow as rapidly as
China