INDIA/ CHINA COMPARISON IN

ECONOMY AND DEFENCE(FUTURE)

SUBMITTED BY :

VISHAL MAHLOTRA
ACHINT MASIH
AUSHI SAINI
ALLWYN THOMAS

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INTRODUCTION OF BOTH NATIONS:

China and India are currently among the fastest growing
economics in the globe.
India flag

INDIAS
PM

INDIAN
RUPEE-INR

Chinese flag

CHINAS
PM

CHINESE
YUAN

DEMOGRAPHY OF CHINA AND INDIA:

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

DEMOGRAPHY OF CHINA AND

INDIA:HEALTH CONDITION
Chinas population is generally healthier than Indias, 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 nations 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 worlds 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, Indias & Chinas 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 Chinas favor, or even grows
The chinas GDP is 12.5% and its defense share GDP is -3.0% and
Indias GDP is 5.0% & its defense share GDP is 2.0

DEFENSE/PROCUREMENT EXPENDITURE
OF BOTH NATION:
Indias defense and defense procurement spending are more transparent than
Chinas, because of the public & detailed nature of Indias public budgeting
process.
For its part, Chinas 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)
Chinas 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 INDIAS

DEFENSE SPENDING IN 2025( IN
BILLIONS)
Indias 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

INDIAS NULCEAR POWER:

NUCLEAR WARHEADS

27%

50%
10%
13%

OPERATIONAL

BEING BUILT

PLANNED

TOTOAL

CHINAS 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
Peoples Liberation Army that controls Chinas nuclear ballistic &
conventional missiles are included in chinas 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 Chinas 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.