INDIA AND CHINA EMERGING GLOBAL POWERS

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INDIA AND CHINA EMERGING GLOBAL POWERS. :INDIA AND CHINA EMERGING GLOBAL POWERS. KARTIK JAIN BBA Ist -C

INTRODUCTION :INTRODUCTION China and India: emerging global economic players High economic growth rates Rapidly rising share in world exports Large inflows of foreign investment Engines of demand growth in commodities Positive demographics

Slide 3:China’s admirers have two typical openings gambits in any comparison of China with India . The first is , “Look at China with Infrastructure – where is China and where is India !” The second commiserates with the presence of drags to growth in India’s political system. If China opened up in 1978, India did so in1991, i.e., 14 years after China therefore , any comparison of India of today should be made with China as it was more than a decade ago as emerging global powers now. Since the two countries had similar labour endowments and development lags due to government controls and the protected nature of their economies , they can be expected to follow similar growth paths on opening up. Chart follows:-

Comparisons 1995 to Most Recent :Comparisons 1995 to Most Recent ©cjd

Slide 5:Emerging Markets Compared

Slide 6:India's greater expertise with market also shows in the financial sector, which is more deeper and more robust then Chinese counterpart . Chinese delegation used to ask Indian only about the ICT sector ; in recent year Chinese want to know how bank non- performing assets were lowered and how exchange rates are flexible even without full capital account convertible.

China Vs. India- A Comparative Snapshot (2007) :China Vs. India- A Comparative Snapshot (2007)

PRE-CONDITIONS FOR A PEACEFUL GLOBAL POWER TRANSITION :PRE-CONDITIONS FOR A PEACEFUL GLOBAL POWER TRANSITION Much of China ‘s dazzling new infrastructure was built in the late 1990s , and India is gearing up to the repeat that performance in the latter part of this decade . Foreign inflows into China jumped substantially in the early 1990s ,and those into India have ,as was to be expected, jumped in the mid-2000s.

Slide 9:Good education and health facilities are necessary for inclusive development they are state subjects in India ,in china also , local government has a large share of the responsibility for their provision. The Chinese culture is more homogenous , while India has greater diversity. India's greater expertise with market also shows in the financial sector, which is more deeper and more robust then Chinese counterpart .

Slide 10:Very high economic growth, large internal market Very high savings and investment rate Excellent at tapping into global knowledge through direct foreign investment and Chinese Diaspora Becoming world’s manufacturing base Very large supply of excess labor will continue to give it low wage advantage But moving rapidly up value chain from labor intensive to more technology intensive exports Efficient export trade logistics Critical mass in R&D is beginning to be deployed to increase competitiveness Strong investments in education and training Government with strong sense of national purpose ©cjd China--Strengths

Slide 11:Jumped from traditional rate of 2-3% growth in past decades to 6-8% last decade Strong science and engineering capabilities centered in chemical and software areas Is becoming worlds service center for software development and back office offshore outsourcing Is also becoming center for contract innovation work for multinational companies Has large critical mass of educated, skilled, and English speaking knowledge workers and can increase this stock Has network of successful Indians in US and Europe providing links to markets, technology, and finance Relatively deep financial markets Is strengthening export orientation, and seeking strategic alliances, but strength is limited more to intangible trade rather than tangibles trade because of high infrastructure and regulatory costs ©cjd India -- Strengths

Slide 12:Importance of nation state in developing long term strategy for country, providing stable macroeconomic framework, pragmatism in transition to market economy developing an institutional means for development to take place focusing for several decades on the importance of education and science and technology Importance of integration to world economy and of trade in goods as engine of growth Very effective use of direct foreign investment to move up technology ladder Strong investments in human capital as fundamental step to make the transition Effective use of Chinese Diaspora in high tech parks and to bring in technology and access to markets ©cjd China -- Lessons

Slide 13:Importance of investments in high level technical, scientific, and managerial capital through network of Indian Institutes of Technology and Indian Management Institutes Importance of turning brain drain to brain gain by harnessing Indian Diaspora in global high tech industry Importance of moving from self-reliance to greater international integration to accelerate and sustain growth Importance of improving the whole legal and regulatory environment to stimulate greater innovation and get more out of growing critical mass of resources allocated to R&D Importance of tackling necessary reforms in regulatory regime and improving infrastructure and education to really emerge as major export power ©cjd India -- Lessons

Slide 14:CONCLUDE

Slide 15:The two countries can develop similar position on international negotiations to counter pressure from lobbies that would make developing countries bear much of the cost of moderating the climate change created by current develop nations. At the same time , promoting technology and renewable energy based solutions will mitigate the need for intense future competition over energy. SO IT COULD BE CHINA AND INDIA IN THE FUTURE, NOT CHINA VERSUS INDIA. Thank you!