A little neighbourly love goes a long way, and a little competition between two neighbouring countries can keep both on their toes when it comes to their individual growth With China’s 12th 5-year plan unfolding and showing us how it performs in the global market, it’s time to see how well India measures up to this giant economy across the border.
China has been the world’s largest exporter since its centrally controlled system opened to provide for a global market in the 70s. Ever since, it has led the world as the second largest economy. India too has seen the mantra of liberalisation - globalisation-globalisation work in its favour, and has industries from world over set their eyes on it as a market as well as a producer. With both countries running an intense race of prosperity, innovation and technology play a major role in determining who is really ahead. Here’s an overview of this comparison.
GDP
By Gross Domestic Produce measures, while India isn’t ahead of China, we might take pride in the fact that we have outdone our own GDP from last year. The same cannot be said for China whose GDP growth decelerated. In the year 2012-13, India saw a GDP growth of 45%, and in the following fiscal year, noted a leap with 4.9%. Given the political changes in the country, one only hopes that the growth increases and catches up to that of our neighbours.
China on the other hand, has encountered the lowest rate of GDP growth in the past 14 years. At 7.7% in the year 2013-14, though – it stands far ahead of India. Experts claim this falling back is due to an overall realignment and fail in exports, investments and more, which occurred due to global and domestic factors.
Innovation
Make way for the two countries that hold not only the world’s largest populations, but also the most innovative minds. A maximum number of CEOs in Silicon Valley are Chinese, followed by Indian. So the question is - how are the countries doing between themselves – for the innovative talent they retain?
India’s innovation capacity is not as good as it ought to be –being lower than almost all other BRICS nations, with the exception of Russia. It is, in fact, at a fifth of what China is. On a global sense, India accounts for 3% for gross expenditure on research and development, in purchase power parity. The Economic Survey for 2013-14 by Finance Minister Arun Jaitley mentioned about this growth that, "Its growth has been consistently high at near 20 per cent in the last few years. In 2012-13 growth has been at 20.8 per cent.”
This however occupies second position in India’s GDP – an encouraging stat on its own.
Manufacturing
While the GDP of India has risen from 4.5% to 4.9% in the year 2013-14, the manufacturing sector has not-so-good news. The output has reduced by 0.2% in comparison to the growth observed last year, at 1.1%. The drop has been the worst in 13 years – since the 1999-2000 fiscal year. China on the other hand has seen the rate increase to an astounding 7.2%. As world leader in exports, it’s no surprise that their focus is on keeping that rank.
The world’s looking to the east – yes, at us, and our neighbours, for the future of technology, supporting industries, man power and development. While competition helps get more investment and export opportunities into the country, we should also remember the unique cultural texture of India that heavily influences the manufacturing, technological and other sectors, as well as retaining its indigenous industries.
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