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China vs. India

Economy

ChinaIndia
Economy - overviewSince 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, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. After keeping its currency tightly linked to the US dollar for years, in July 2005 China 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 and expanded the daily trading band within which the RMB is permitted to fluctuate. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2013 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2011 more than 250 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources.India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and served to accelerate the country's growth, which averaged under 7% per year from 1997 to 2011. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly less 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 labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services, business outsourcing services, and software workers. India's economic growth began slowing in 2011 because of a decline in investment, caused by high interest rates, rising inflation, and investor pessimism about the government's commitment to further economic reforms and about the global situation. In late 2012, the Indian Government announced additional reforms and deficit reduction measures, including allowing higher levels of foreign participation in direct investment in the economy. The outlook for India's long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. However, India has many challenges that it has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities, high spending and poorly-targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration. Growth in 2013 fell to a decade low, as India's economic leaders struggled to improve the country's wide fiscal and current account deficits. Rising macroeconomic imbalances in India and improving economic conditions in Western countries, led investors to shift capital away from India, prompting a sharp depreciation of the rupee. However, investors' perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee.
GDP (purchasing power parity)$13.39 trillion (2013 est.)
$12.43 trillion (2012 est.)
$11.54 trillion (2011 est.)
note: data are in 2013 US dollars
$4.99 trillion (2013 est.)
$4.833 trillion (2012 est.)
$4.63 trillion (2011 est.)
note: data are in 2013 US dollars
GDP - real growth rate7.7% (2013 est.)
7.7% (2012 est.)
9.3% (2011 est.)
3.2% (2013 est.)
5.1% (2012 est.)
7.5% (2011 est.)
GDP - per capita (PPP)$9,800 (2013 est.)
$9,100 (2012 est.)
$8,300 (2011 est.)
note: data are in 2013 US dollars
$4,000 (2013 est.)
$3,900 (2012 est.)
$3,800 (2011 est.)
note: data are in 2013 US dollars
GDP - composition by sectoragriculture: 10%
industry: 43.9%
services: 46.1%
(2013 est.)
agriculture: 17.4%
industry: 25.8%
services: 56.9% (2013 est.)
Population below poverty line6.1%
note: in 2011, China set a new poverty line at RMB 2300 (approximately US $3,630)
(2013)
29.8% (2010 est.)
Household income or consumption by percentage sharelowest 10%: 1.7%
highest 10%: 30%
note: data are for urban households only (2009)
lowest 10%: 3.6%
highest 10%: 31.1% (2005)
Inflation rate (consumer prices)2.6% (2013 est.)
2.6% (2012 est.)
9.6% (2013 est.)
9.7% (2012 est.)
Labor force797.6 million
note: by the end of 2012, China's population at working age (15-64 years) was 1.0040 billion (2013 est.)
487.3 million (2013 est.)
Labor force - by occupationagriculture: 33.6%
industry: 30.3%
services: 36.1%
(2012 est.)
agriculture: 49%
industry: 20%
services: 31% (2012 est.)
Unemployment rate4.1% (2013 est.)
4.1% (2012 est.)
note: data are for registered urban unemployment, which excludes private enterprises and migrants
8.8% (2013 est.)
8.5% (2012 est.)
Distribution of family income - Gini index47.3 (2013)
47.4 (2012)
36.8 (2004)
37.8 (1997)
Budgetrevenues: $2.118 trillion
expenditures: $2.292 trillion (2013 est.)
revenues: $181.3 billion
expenditures: $281.6 billion (2013 est.)
Industriesworld leader in gross value of industrial output; mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products (including footwear, toys, and electronics); food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, aircraft; telecommunications equipment, commercial space launch vehicles, satellitestextiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals
Industrial production growth rate7.6% (2013 est.)0.9% (2013 est.)
Agriculture - productsworld leader in gross value of agricultural output; rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed; pork; fishrice, wheat, oilseed, cotton, jute, tea, sugarcane, lentils, onions, potatoes; dairy products, sheep, goats, poultry; fish
Exports$2.21 trillion (2013 est.)
$2.049 trillion (2012 est.)
$313.2 billion (2013 est.)
$296.8 billion (2012 est.)
Exports - commoditieselectrical and other machinery, including data processing equipment, apparel, radio telephone handsets, textiles, integrated circuitspetroleum products, precious stones, machinery, iron and steel, chemicals, vehicles, apparel
Exports - partnersHong Kong 17.4%, US 16.7%, Japan 6.8%, South Korea 4.1% (2013 est.)UAE 12.3%, US 12.2%, China 5%, Singapore 4.9%, Hong Kong 4.1% (2012)
Imports$1.95 trillion (2013 est.)
$1.818 trillion (2012 est.)
$467.5 billion (2013 est.)
$488.9 billion (2012 est.)
Imports - commoditieselectrical and other machinery, oil and mineral fuels; nuclear reactor, boiler, and machinery components; optical and medical equipment, metal ores, motor vehicles; soybeanscrude oil, precious stones, machinery, fertilizer, iron and steel, chemicals
Imports - partnersSouth Korea 9.4%, Japan 8.3%, Taiwan 8%, United States 7.8%, Australia 5%, Germany 4.8% (2013 est.)China 10.7%, UAE 7.8%, Saudi Arabia 6.8%, Switzerland 6.2%, US 5.1% (2012)
Debt - external$863.2 billion (31 December 2013 est.)
$737 billion (31 December 2012 est.)
$412.2 billion (31 December 2013 est.)
$378.9 billion (31 December 2012 est.)
Exchange ratesRenminbi yuan (RMB) per US dollar -
6.2 (2013 est.)
6.3123 (2012 est.)
6.7703 (2010 est.)
6.8314 (2009)
6.9385 (2008)
Indian rupees (INR) per US dollar -
58.68 (2013 est.)
53.437 (2012 est.)
45.726 (2010 est.)
48.405 (2009)
43.319 (2008)
Fiscal yearcalendar year1 April - 31 March
Public debt22.4% of GDP (2013 est.)
26.1% of GDP (2012)
note: official data; data cover both central government debt and local government debt, which China's National Audit Office estimated at RMB 10.72 trillion (approximately US$1.66 trillion) in 2011; data exclude policy bank bonds, Ministry of Railway debt, China Asset Management Company debt, and non-performing loans
51.8% of GDP (2013 est.)
51.7% of GDP (2012 est.)
note: data cover central government debt, and exclude debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions
Reserves of foreign exchange and gold$3.821 trillion (31 December 2013 est.)
$3.388 trillion (31 December 2012 est.)
$295 billion (31 December 2013 est.)
$296 billion (28 December 2012 est.)
Current Account Balance$182.8 billion (2013 est.)
$215.4 billion (2012 est.)
-$74.79 billion (2013 est.)
-$91.47 billion (2012 est.)
GDP (official exchange rate)$9.33 trillion
note: because China's exchange rate is determine by fiat, rather than by market forces, the official exchange rate measure of GDP is not an accurate measure of China's output; GDP at the official exchange rate substantially understates the actual level of China's output vis-a-vis the rest of the world; in China's situation, GDP at purchasing power parity provides the best measure for comparing output across countries (2013 est.)
$1.67 trillion (2013 est.)
Stock of direct foreign investment - at home$1.344 trillion (31 December 2012 est.)
$1.232 trillion (31 December 2011 est.)
$310 billion (30 November 2013 est.)
$225.1 billion (31 December 2012 est.)
Stock of direct foreign investment - abroad$541 billion (31 December 2013 est.)
$531.9 billion (31 December 2012 est.)
$120.1 billion (31 December 2013 est.)
$118.1 billion (31 December 2012 est.)
Market value of publicly traded shares$6.499 trillion (31 December 2013 est.)
$5.753 trillion (31 December 2012)
$3.389 trillion (31 December 2011 est.)
$1.263 trillion (31 December 2012 est.)
$1.015 trillion (31 December 2011)
$1.616 trillion (31 December 2010 est.)
Central bank discount rate2.25% (31 December 2013 est.)
2.25% (31 December 2012 est.)
7.75% (31 December 2013 est.)
8% (31 December 2010 est.)
note: this is the Indian central bank's policy rate - the repurchase rate
Commercial bank prime lending rate5.73% (31 December 2013 est.)
6% (31 December 2012 est.)
10.6% (31 December 2013 est.)
10.63% (31 December 2012 est.)
Stock of domestic credit$11.79 trillion (31 December 2013 est.)
$10.02 trillion (31 December 2012 est.)
$1.379 trillion (31 December 2013 est.)
$1.401 trillion (31 December 2012 est.)
Stock of narrow money$5.532 trillion (31 December 2013 est.)
$4.911 trillion (31 December 2012 est.)
$303.1 billion (31 December 2013 est.)
$317.4 billion (31 December 2012 est.)
Stock of broad money$18.15 trillion (31 December 2013 est.)
$15.5 trillion (31 December 2012 est.)
$1.376 trillion (31 December 2013 est.)
$1.396 trillion (31 December 2012 est.)
Taxes and other revenues19.4% of GDP (2013 est.)10.3% of GDP (2013 est.)
Budget surplus (+) or deficit (-)-2.1% of GDP (2013 est.)-5.7% of GDP (2013 est.)
GDP - composition, by end usehousehold consumption: 36.3%
government consumption: 13.7%
investment in fixed capital: 46%
investment in inventories: 1.2%
exports of goods and services: 25.1%
imports of goods and services: -22.2%
(2013 est.)
household consumption: 56.4%
government consumption: 12.4%
investment in fixed capital: 29.6%
investment in inventories: 8.2%
exports of goods and services: 25.2%
imports of goods and services: -31.8%
(2013 est.)
Gross national saving50% of GDP (2013 est.)
51.2% of GDP (2012 est.)
50.1% of GDP (2011 est.)
33.7% of GDP (2013 est.)
28.8% of GDP (2012 est.)
30.3% of GDP (2011 est.)

Source: CIA Factbook