2. 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 Influence
on the World Economy
 Policy and Implications
 Present Economy of India
 Present Economy of China

3. INTRODUCTION
• Both are world’s most
ancient civilizations
• Chinese built 4000-mile
Great Wall some 2000
years ago
• Invented bureaucracy

4. Conti…..
Indian contributions to :-
• Algebra
• Textile
• Chemistry
• Medicine
• Metallurgy and
• Astronomy in the Ancient
and Medieval periods

5. Conti…..
• India and China, lost their edge somewhere during
the 16th and 17th centuries
• Contacts between these two civilizations ceased
during the colonial period because the new rulers
of the world did not encourage such contacts.
• When the contacts revived, they turned into
conflict and hostility over rival territorial claims in
the Himalayan region, the Chinese annexation of
Tibet, and the Exile of Dalai Lama into
(Dharamshala) India

6.  India became independent peaceful transition
of sovereignty from Britain in 1947
 China had a proletarian revolution in 1949
 Both democratic India and Communist China
embarked upon ambitious science,
technology, and economic development
programs through centralized planning.
 That relationship began to crack in 1962
because of the USSR’s reluctance to transfer
nuclear technology to the Peoples Republic

7. Conti…..
 China continued its isolation and suffered
serious stagnation for 20 or so more years
 The Indian economy began to open its door
a bit more widely by the middle of the 1980s
 It missed 20 years of the IT revolution that was
sweeping the world and driving the global
economy
IBM and Coca-Cola were kicked out of
India in the middle of 1970s.

8. Conti….
 Chinese economy has been growing at
about
9-10% per year (1980)
 GDP per capita of China is the world’s 4th
largest economy, overtaking Japan within
next 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, 4th
largest in the world in terms of purchasing
power parity

9. Problems of Chinese
eConomiC Growth…?
1.Pollution
2.Shortage of Power
3.Growing Income Inequality.
4.Property Boom
5.Inefficient Banking Sector.
6. Unemployment
7. Undervaluation of Yuan.
8.Overheating Economy.
9. Huge Balance of Payments
Surplus.

10. Problems faCinG
indian eConomy…?
1. Inflation. (7-8%)
2. Poor educational standards.
3. Poor Infrastructure.
4. Balance of Payments
deterioration.
5.High levels of debt
6.Inequality has risen
rather than decreased.
7.Large Budget Deficit.
8.Rigid labor Laws.

11. Strengths of Indian
Economy
• Demographics of India are
favorable.
• There is much scope for
increases in efficiency.
• India is well placed to
benefit from globalization
and outsourcing.
• Positive Growth Forecasts

12. Conti…..
 If the US finds itself more at ease with India,
rather than China, it makes perfect sense.
 Both are successful, open, and large
democracies with sound, viable democratic
institutions as well as independent media and
judiciary

13. Growth of China and India
and its Influence on the
World Economy!!
 Indicators of the Extent of Integration in
World Markets for Goods and Services
 Shares of China and India in Global GDP and
its Growth
 Sources and Sustainability of Growth
• Factor Accumulation
• Growth in Total Factor Productivity
• External Capital Inflows

14. Policy Implications
• Chinese GDP growth since 1980 - 9%
• India's GDP growth since 1980 - 6%
• With populations of 1.3 and 1.1 billion in
2003, they present huge & fast growing
domestic market for a range of goods and
services,
• and export opportunities for producers in the
rest of the world.

15. Conti….
•Acceleration of global grTheir
increasing competition for the
world’s raw materials and their
increasing shares in the global
markets for a range of goods and
services, is a threat to their
prosperity and growth.
•Growth would increase the
demand for transport and shipping.

16. Present Economy of IndiaPresent Economy of India
India is developing into an open-market economy, yet traces of its past autarkic policies
remain. Economic liberalization, including industrial deregulation, privatization of state-
owned enterprises, and reduced controls on foreign trade and investment, began in the
early 1990s and has served to accelerate the country's growth, which has averaged
more than 7% per year since 1997. India's diverse economy encompasses traditional
village farming, modern agriculture, handicrafts, a wide range of modern industries, and
a multitude of services. Slightly more than half of the work force is in agriculture, but
services are the major source of economic growth, accounting for nearly two-thirds of
India's output, with less than one-third of its labour force. India has capitalized on its large
educated English-speaking population to become a major exporter of information
technology services and software workers. In 2010, the Indian economy rebounded
robustly from the global financial crisis - in large part because of strong domestic
demand - and growth exceeded 8% year-on-year in real terms. However, India's
economic growth began slowing in 2011 because of a tight monetary policy, intended
to address persistent inflation, and a decline in investment, caused by investor pessimism
about domestic economic reforms and about the global situation. High international
crude prices have exacerbated the government's fuel subsidy expenditures, contributing
to a higher fiscal deficit and a worsening current account deficit. In late 2012, the Indian
Government announced reforms and deficit reduction measures to reverse India's
slowdown. The outlook India's medium-term growth is positive due to a young population
and corresponding low dependency ratio, healthy savings and investment rates, and
increasing integration into the global economy. India has many long-term challenges
that it has not yet fully addressed, including poverty, inadequate physical and social
infrastructure, limited non-agricultural employment opportunities, inadequate availability
of quality basic and higher education, and accommodating rural-to-urban migration.

17. Present Economy of China
Since the late 1970s China has moved from a closed, centrally planned system to a more
market-oriented one that plays a major global role - in 2010 China became the world's
largest exporter. Reforms began with the phasing out of collectivized agriculture, and
expanded to include the gradual liberalization of prices, fiscal decentralization, increased
autonomy for state enterprises, creation of a diversified banking system, development of
stock markets, rapid growth of the private sector, and opening to foreign trade and
investment. China has implemented reforms in a gradualist fashion. After keeping its
currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by
2.1% against the US dollar and moved to an exchange rate system that references a
basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi
against the US dollar was more than 20%, but the exchange rate remained virtually pegged
to the dollar from the onset of the global financial crisis until June 2010, when Beijing
allowed resumption of a gradual appreciation. The restructuring of the economy and
resulting efficiency gains have contributed to a more than tenfold increase The Chinese
government is seeking to add energy production capacity from sources other than coal
and oil, focusing on nuclear and alternative energy development. In 2010-11, China faced
high inflation resulting largely from its credit-fuelled stimulus program. Some tightening
measures appear to have controlled inflation, but GDP growth consequently slowed to
under 8% for 2012. An economic slowdown in Europe contributed to China's, and is
expected to further drag Chinese growth in 2013. Debt overhang from the stimulus
program, particularly among local governments, and a property price bubble challenge
policy makers currently. The government's 12th Five-Year Plan, adopted in March 2011,
emphasizes continued economic reforms and the need to increase domestic consumption
in order to make the economy less dependent on exports in the future. However, China has
made only marginal progress toward these rebalancing goals.

18. PRESENTED BY:
Moniksha
Megha
Kanchan
Khushbu
Class: X C