India and China's economy

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INDIA/ CHINA COMPARISON IN
ECONOMY AND DEFENCE(FUTURE)
SUBMITTED BY :

• VISHAL MAHLOTRA
• ACHINT MASIH
• AUSHI SAINI
• ALLWYN THOMAS

ACKNOWLEDGEMENT
• Here is the assignment that we are assigned on the topic as per your request. The
assignment has been completed by the knowledge that we have gathered from
the course of BBA.
• We have tried our level best to complete this assignment
meaningfully and correctly as much as possible. We do believe that
our tiresome effort will help you to get ahead with this sort of
venture. In this case, it will be meaningful to us. However, if you
need any assistance in interpreting this assignment please contact
us without any kind of hesitation.

INTRODUCTION OF BOTH NATIONS:
• China and India are currently among the fastest growing
economics in the globe.
• India flag

INDIA’S
PM

INDIAN
RUPEE-INR

Chinese flag

CHINA’S
PM

CHINESE
YUAN

DEMOGRAPHY OF CHINA AND INDIA:
• India’s current rate of annual population growth is about twice that
of china( 1.55% versus 0.66%);as a consequence its population will
equal China’s in 2025(at about 1.4 billion)
• perhaps India’s population is projected to continue increasing at
least through 2050,while China’s will reach its maximum(about 1.5
billion) in 2032 will decline afterwards
• A large percentage of china’s population has been of working age
(between 15/64),compared with India’s for the past 3 decades, but
the proportion of India’s populations that is of working age will
continue to rise into early 2030s.

DEMOGRAPHY OF CHINA AND
INDIA:HEALTH CONDITION
• China’s population is generally healthier than India’s, has
the benefit of a more-developed health core system & has
more experience in containing the effect of communicable
disease
• Whether booth's nations have several demographics
advantage-increasing numbers younger age, declining
dependency ratios etc.; will add to a dividend or a drag on
future growth depends on the extent to which productive
employment opportunities emerge from on open
competitive, innovative both nation’s economy.

ECONOMY OF INDIA:
• China and India are currently among the fastest growing economies in the
globe. Together the 2 nations represent 38% of the global population
continued growth of the world’s 2nd & 4th largest economics
respectively[ measured by PPP based GNP]
• The financial crisis is present in the both countries simultaneously. However,
India appears better placed than China institutionally & being democracy, to
rectify itself subsequent to a crisis through the electoral process.
• For China, not being a multi-party democracy such rectification would a
major political upheaval
• Therefore, the perception of today is that both economics are going strong &
will fed global growth in the future

Particulars

India

Economic rank by GDP

9th largest

Economic rank by ppp

3rd

China

2nd largest
2nd

Currency

Indian rupee –paise
1$ =Rs 64.75

yuan-renminbi
1$ =6.3039 Rmb

Fiscal year

1ST APRIL -31ST MARCH

1ST JANUARY -31ST
DECEMBER

GDP

$ 1.846 TRILLION

$ 7.43 TRILLION

GDP GROWTH

7.5% (2015)

9.5 % (2015)

GDP BY SECTOR

agriculture: 18.1%,
industry: 26.3%,
services: 55.6%

industry (46.8%),
services (43.6%),
agriculture (9.6%)

INFLATION

6.95%

5.4%

UNEMPLOYEMENT

9.8%

4.2%

INDIA/CHINA:
Living standard indicators
46%
17%

Poverty ratio (% below)

under five malnutrition (%)

44%

3%

Under five mortality(per 1000)

22%
56%

Female adult literacy%
0%

66%

10%

40%
50%
China 30%
Exponential (Column1)

20%

60%
70%
Column1

83%
80%

90%

ECONOMICS OF INDIA AND CHINA:
Average per capital Income(GNI per capital, 2015)
60
50
40
30
20
10
0

AT PURCHASING POWER PARITY
CHINA

Column1

AT OFFICAL EXCHANGE RATES
Exponential (Column1)

ECONOMIC TERMS OF BOTH NATIONS:
Adequacy of foreign Exchange Reserve($ US Billions)
450
400
350
300
250
200
150
100
50
0

INDIA (2014)

CHINA(2014)

TRANSACTION
TOTAL REQUIRED

INDIA(2015)

PRECAUTIONARY
AVALIABLE

CHINA(2015)

SPECULATIVE
Linear (AVALIABLE )

ECONOMIC FACTORS OF BOTH NATIONS:
External sector
350

FDI

340
190

current account balance

210

merchandise exports
0

336

50

100

150

CHINA
Exponential (Column1)

200

250

Column1

289
300

350

400

ECONOMY OF INDIA & CHINA: GDP
• Net present value of foreign debt us more than 37% percent of GDP.
At present, this ratio is 16 % in India and 13% in china
• Current account deficit in the balance of payment A/Cs is larger than
minus 2.5% of GDP. At present this ratio is 1.1% in India & 1.9 % in
china surplus of china declined recently 4.1% for now
• Foreign direct Investment is less than 60% of the total capital inflow.
At present FDI( using IMF data ) is 62% in India & 67% in China
• But this ratio due to rising portfolio investment has been declining
during the 4 years in both countries & on present trend could full
below 60% mark by 2014.

DEFENSE OF INDIA & CHINA :
• Though, India’s & China’s vast growing of populations, increasingly
– sophisticated & diversified economics plus tremendous
technology sectors – contribute to their growing strategy
importance
• The most likely outcome in 2025 is that Chinese-defense spending
will continue to exceed that of India, & the ratio of Chinese to
Indian spending is likely to continue in China’s favor, or even grows
• The china’s GDP is 12.5% and its defense share GDP is -3.0% and
India’s GDP is 5.0% & its defense share GDP is 2.0

DEFENSE/PROCUREMENT EXPENDITURE
OF BOTH NATION:
• India’s defense and defense procurement spending are more transparent than
China’s, because of the public & detailed nature of India’s public budgeting
process.
• For its part, China’s policy of reporting its defense & its procurement spending
in terms of budgetary aggregate probably omits substantial amounts of defense
related spending
• Under many circumstances, the recently observed high levels of double- digit
growth in defense & defense procurement spending in both China & India will
likely be politically unsustainable will before 2025.
• It will therefore be important to carefully monitor the Chinese & Indian
leadership discourse for signs that growth in defense spending will be taping off.

GROWTH RATE FORECASTS OF CHINESE
DEFENSE SPENDING IN 2025( IN
BILLIONS)
China’s defense spending

5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0

DEFENSE 2014
HISTORICAL GDP
Linear (HISTORICAL DEFENSE)

GDP Metal-Analysis
HISTORICAL DEFENSE
Exponential (HISTORICAL DEFENSE)

GROWTH RATE FORECASTS OF INDIA’S
DEFENSE SPENDING IN 2025( IN
BILLIONS)
India’s defense spending
6,000.00
5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
0.00

DEFENSE 2014
GDP Metal analysis
HISTORICAL DEFENSE

Exponential (DEFENSE 2014)
HISTORICAL GDP

INDIA’S NULCEAR POWER:
NUCLEAR WARHEADS

27%

50%
10%
13%

OPERATIONAL

BEING BUILT

PLANNED

TOTOAL

CHINA’S NUCLEAR POWER:
NUCLEAR POWER

14%
50%

OPERATIONAL

5%

31%

BEING BUILT

PLANNED

TOTAL

DEFENSE SPENDING OF CHINA
• It is not clear how much spending on the personnel, operations, and
maintenance of the Chinese 2nd Artillery corps, the component of the
People’s Liberation Army that controls China’s nuclear ballistic &
conventional missiles are included in china’s defense spending (offline data
show up) how much might be hidden elsewhere
• Same similar to Indian defense measure which are unknown facts as china
• Thus, spending on defense nuclear & space activities remain a key area of
uncertainty for both China & India

CONCLUSION:
• A crisis, appears probable in both countries. India is institutionally better
equipped to fire fight the crises once it envelopes the economy because of
the flexibility of democracy in being able to replace failed leadership.
• The Chinese institutional system is still underdeveloped its political order is
more brittle, and the leadership is not only directly accountable but less
capable of political change.
• Therefore, India is potentially more likely to get ahead of china after the
crises in the two economies
• To rectify these imminent bankruptcies, a banking one in china & fiscal one
in India a new generation of financial reforms are required that may hurt
political interest.

CONCLUSION:
• Under the most plausible assumptions, Chinese defense & its defense
procurement spending will exceed that of India in 2025, and the ratio of
Chinese to Indian spending will grow.
• The fact that this result depends on a comparison that favored India
probably underestimated China’s spending, suggests that the gaps in 2025
may favor China by more than our estimates & forecasts suggest.
• Unless India succeeds in major reforms, the gap between China & India in
the production of actual defense capabilities-quantitative and qualitativecould be even larger.

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