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    Dynamics of Growth: India and China: Dr. Jayanta Roy Sr. Advisor, ID (Research) CII

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    atikbarbhuiya1432
    This document discusses the economic growth and development challenges facing India and China. It argues that both countries need high growth to lift hundreds of millions out of poverty and provide basic services. To sustain growth, India and China need to further integrate into the global economy through trade in goods, services, foreign direct investment, and technology transfers. Currently, bilateral trade between India and China is small given their large economies; the document proposes strategies to increase bilateral trade in goods and services to $20 billion and $5 billion respectively by 2009. It emphasizes that facilitating quicker cross-border movement of goods, services, capital and people is essential to building successful economic relations between the two countries.

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    Dynamics of Growth: India and China: Dr. Jayanta Roy Sr. Advisor, ID (Research) CII

    Uploaded by

    atikbarbhuiya1432
    29 views15 pages
    This document discusses the economic growth and development challenges facing India and China. It argues that both countries need high growth to lift hundreds of millions out of poverty and provide basic services. To sustain growth, India and China need to further integrate into the global economy through trade in goods, services, foreign direct investment, and technology transfers. Currently, bilateral trade between India and China is small given their large economies; the document proposes strategies to increase bilateral trade in goods and services to $20 billion and $5 billion respectively by 2009. It emphasizes that facilitating quicker cross-border movement of goods, services, capital and people is essential to building successful economic relations between the two countries.

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    Dynamics

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    This document discusses the economic growth and development challenges facing India and China. It argues that both countries need high growth to lift hundreds of millions out of poverty and provide basic services. To sustain growth, India and China need to further integrate into the global economy through trade in goods, services, foreign direct investment, and technology transfers. Currently, bilateral trade between India and China is small given their large economies; the document proposes strategies to increase bilateral trade in goods and services to $20 billion and $5 billion respectively by 2009. It emphasizes that facilitating quicker cross-border movement of goods, services, capital and people is essential to building successful economic relations between the two countries.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    29 views15 pages

    Dynamics of Growth: India and China: Dr. Jayanta Roy Sr. Advisor, ID (Research) CII

    Uploaded by

    atikbarbhuiya1432
    This document discusses the economic growth and development challenges facing India and China. It argues that both countries need high growth to lift hundreds of millions out of poverty and provide basic services. To sustain growth, India and China need to further integrate into the global economy through trade in goods, services, foreign direct investment, and technology transfers. Currently, bilateral trade between India and China is small given their large economies; the document proposes strategies to increase bilateral trade in goods and services to $20 billion and $5 billion respectively by 2009. It emphasizes that facilitating quicker cross-border movement of goods, services, capital and people is essential to building successful economic relations between the two countries.

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    of 15

    DYNAMICS OF GROWTH:

    INDIA AND CHINA


    Dr. Jayanta Roy
    Sr. Advisor, ID ( Research)
    CII
    The Development Challenge

    The two Asian giants need to….


    Pull 403 million people out of poverty (number of people
    living below US$1 per day).
    Provide access to basic amenities (potable water, basic health
    and education) to around 385 million people who are still
    deprived of such fundamental rights.  
    Face the specter of retraining and reemploying a large section
    of their skilled work force that will be left jobless after PSU
    restructuring.  
    Deal with environment, AIDS, water scarcity, soil erosion and
    threats to national security and ensure that they do not derail
    the development process.
    The Development Challenge

    To do all this the Asian giants need to….


     
    KEEP GROWING!!!
    China has been a fast growth economy for sometime.
    India has finally started showing the kind of growth
    dynamism required to pull itself into the major
    league of economic powers.  
    For both India and China, a large part of this growth
    will come through an outward oriented strategy, i.e.
    integration into the world economy.
    Economic growth and global
    integration
    The Four Noble Truths of the new Millennium.

    Goods (Intra-Industry trade and Value added


    agriculture)
    Services and Knowledge Industries (IT, ITES,
    Professional services, Biotech, Tourism) 
    Foreign Direct Investment:  
    Technology: Moving up the value chain in the
    global production process.
    Options for India and China:
    Short-term
    Concentrate on the North:
    Goods: Strive to be a part of the global supply chain in
    manufacturing and agriculture. 
    Services and Knowledge Industry: Main markets will be in
    the US and EU.  
    Foreign Direct Investment: Main source of FDI will be high-
    income OECD countries, especially the G-7 countries.  
    Technology: Cutting edge will be in US and some extent
    from EU and Japan. Need to build synergies with US and EU
    to leverage vast pool of human resources in cutting edge
    research.
    Options for India and China:
    medium and long-term
    The Asian giants will need newer markets, and greater
    economic integration.

    ASEAN market is increasingly saturated.


     
    Rapidly growing India and China are windows of
    opportunity for each other.
     
    Need to focus on India-China bilateral trade. Huge
    potential, linking 1/3 of humanity.
    India-China bilateral trade:
    Current status
    Abysmally small, given market size, diversity and
    growth dynamics.  
    Indian exports of goods account just about 1% of
    China’s total imports, while Chinese exports of goods
    account for just about 5% of India’s total imports. 
    India-China bilateral trade is focused on a very narrow
    range of goods. Both economies have comparative
    advantage in similar sectors, i.e. chemicals, processed
    metals and alloys, machinery and machine tools and
    textiles.
    India-China bilateral trade:
    Future strategy
    A pragmatic, yet proactive target will be to achieve
    20 billion USD in bilateral trade of goods by 2009,
    bilateral trade growing at 20% annual average.
     
    A target of USD 5 billion in bilateral trade in
    services and knowledge industries is possible,
    given the rapid development and complimentarity
    between India and China in this segment.
     
    India-China bilateral trade:
    Future strategy
    Goods

    Existing commodities in the trade: penetrate


    regions in China; Continental sized economies
    need regional market strategies.
     
    New commodities: Intra-industry trade, business-
    to-business relations need to be built. Feed into
    each other’s supply chains.
    India-China bilateral trade:
    Future strategy
    Services and Knowledge Industries
    Holds great prospects for both countries:
    India and China share complimentarity in many areas
    of services like IT Enabled Services, IT, Biotech.  
    India can be the lowest cost producer to China in
    several areas like education, professional services
    and financial services.  
    Chinese location, culture and human resources can
    provide India a springboard to enter the Japanese and
    Korean market for services
    India-China bilateral trade:
    Future strategy
    Investment
    Invest in China to access the huge domestic market.  
    Invest in China to access third country markets.
    Leverage Indian technology and management in
    conjunction with Chinese low cost labor and
    excellent infrastructure.  
    Use China as a platform for services exports into
    Japan and Korea 
    Invest in JV’s to built globally competitive Indo-
    Chinese integrated supply chains.
    India-China bilateral trade:
    Future strategy
    THE FIRST VITAL STEP

    FACILITATE!!!

    Hassle free and quick flow of goods,


    services, capital, people and ideas across
    borders is essential to building a successful
    bilateral economic relation.
    Trade Facilitation
    Reduce shipping and container costs. 
    Streamlining customs procedures, and moving towards
    Electronic Data Interface (EDI) in customs administration. 
    Having bilateral Pre-Shipment Inspection (PSI) agencies (and
    agreements) to reduce time and cost of trading. 
    MUTUAL RECOGNITION AGREEMENTS (MRA) ON
    STANDARDS: For any meaningful bilateral trade relationship
    to flourish, Non-Tariff Barriers (NTB’s) need to be removed. 
    Bilateral Agreement on Investment with investor protection
    and profit repatriation. Use MIGA best practices. Important to
    note than both India and China are members of MIGA.
    India AND China: Engines of
    global growth
    1/3 rd of humanity: Demanding goods and services
    from the world 
    1/4 th of high-skilled manpower: Providing goods
    and services to the world 
    In 2025, the combined GDP of India and China will
    be roughly equal to that of G-7 minus US (i.e. Japan,
    Germany, France, UK, Canada and Italy).

    India and China cannot afford to ignore each other.


    Thank You!

    Comments and Observations are most


    welcome.

    Email: [email protected]
    Phone: 24629536

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