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China — India Cooperation and Opportunities

This chapter provides an overview of the Chinese economy, including its transition from a rural to urban economy and a planned to market-based economy. It also examines key developments such as GDP growth, foreign trade, and foreign exchange reserve. Additionally, it explores the prospects of China in the next five years, focusing on stable economic growth, changing patterns of economic development, and the emergence of new strategic industries. This information is valuable for understanding possible areas of cooperation between China and India.

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China — India Cooperation and Opportunities

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  1. China — IndiaCooperation and Opportunities • Overview of Chinese Economy • Prospects of China in Next Five Years • Chinese Companies In Eastern India • Possible Cooperation Areas Between China and India

  2. Chapter 1Overview of Chinese Economy

  3. Overview of Chinese Economy I. Double Transitions • From Rural Economy to Urban Economy • From Planed Economy to Market-based Economy

  4. Overview of Chinese Economy II. GDP & Other Developments • Average 9.5% annual growth from 1978-2010 • Population growth 1% • Average per capita savings deposit: 23 Yuan in 1978 — 12,400 Yuan In 2006 (About 114 times increase in constant Yuan) • Rural electrification has exceeded 98% • Per capita floor space increased from 8 M2 to 31 M2

  5. Overview of Chinese Economy III. Foreign Trade • 20.6 billion USD in 1978 to 2973 billion USD in 2010 (Annual over 17% growth). • In 2011, the figure is 3642 billion USD. • The target for 2015 is 5400 billion USD, which will make China NO. 1 in terms of international trade.

  6. Overview of Chinese Economy IV. Foreign Exchange Reserve • Due to continuous increase of trade surplus and high investment growth, China’s foreign exchange reserve is rising exponentially. • By 2010, national foreign exchange reserve increased to 2.8 trillion USD. • By 2011, national foreign exchange reserve increased to 3.181 trillion USD.

  7. Overview of Chinese Economy V. Rapid Urbanization • In 1978, China’s urbanization rate was 17.92%. • In 2007, China’s urbanization rate reached 46.59%. • By 2011, China’s urbanization rate exceeded 50%.

  8. Overview of Chinese Economy Graph of China’s Urbanization Rate

  9. Overview of Chinese Economy VI. Three Industries • In 2011, Third Industry made up 43.1% of China’s total GDP.

  10. Overview of Chinese Economy VII. Poverty Reduction • In 1978, the absolute poor numbered 250 million and poverty incidence was 33.1%. • By 2009, among total population of 1.31 billion, the absolute poor numbered less than 35 million with poverty incidence 2%. • By 2010, the absolute poor numbered 26.88 million. • By 2011, China raised poverty line from 1196 Yuan to 2300 Yuan (about 1 USD/day, World Bank Poverty Line is 1.25 USD/day). The absolute poor maybe number around 122 million after the increase of poverty line.

  11. Chapter 2Prospects of China In Next Five Years

  12. Prospects of China in Next 5 Years I. Stable Economic Growth • Chinese economy will maintain 7%-8% growth. • Urbanization is the major driving force: 2015 urbanization target 51.5%, each year 12 million people – about 4 million families will be urbanized; 200 million rural people will become urban population in next 10 years.

  13. Prospects of China in Next 5 Years II. Some Important Figures • Increase service sector contribution from 43% to 47%. • Increase spending on R & D: 2.2% of GDP. • Holding CPI at or below 4%. • Increase non-fossil fuel use to 11.4%. • Reduction of energy use per unit of GDP: 16%. • Increase forest coverage by 21.6%. • Average per capita GDP increase to 6000 USD. (2011 per capita GDP is 5414 USD, world ranking 89)

  14. Prospects of China in Next 5 Years III. Change of the Pattern of Economic Development • Problem: Imbalanced, uncoordinated & unsustainable development. • Goal: From export & investment to consumption, export & investment; From development of second industry to coordinated development of 3 industries; From resource consumption to technology & labor quality and management innovation.

  15. Prospects of China in Next 5 Years V. Lower GDP Growth Target To 7% • Emphasize the quality of economic growth. • Economic structure more important than economic aggregate. • Environmental Protection: Circular economy; Low-carbon economy; Environment friendly economy. • Economic growth with improving people’s livelihood.

  16. Prospects of China in Next 5 Years V. Middle & Western China — New Popular Regions In the Future • Major metropolitans such as Shanghai & Guangzhou restricted by high cost, transportation & population. • Middle & western regions rich in natural resources. • With 18,000 KM border line and neighboring 14 countries, middle & western regions will be the theme for further opening-up to middle, south and southeast Asia. • Middle and western regions will mainly develop and upgrade resources processing industry, equipment manufacturing industry and modern service industry.

  17. Prospects of China in Next 5 Years VI. New Strategic Industries • New energy: nuclear, wind & solar power. • Environment friendly and energy saving: energy reduction technology. • New generation IT: broadband networks, internet security infrastructure, network convergence. • Biotechnology: drugs and medical devices. • New materials: rare earths and high-end semiconductors. • Automobiles of new energy: clean energy vehicles. • High-end equipment manufacturing: aviation equipment, satellite and applications, railway transportation equipment, marine engineering equipment, and smart manufacturing equipment.

  18. Chapter 3Chinese Companies In Eastern India

  19. Chinese Companies In Eastern India I. Details of Cooperation • In the five states of Eastern India (West Bengal, Orissa, Bihar, Jharkhand, Chhattisgarh), about 15 Chinese companies contract 28 projects. • These projects include: metallurgy, power plant, mining, etc. • Chinese companies directly hire around 14,000 Indian employees in these projects.

  20. Chinese Companies In Eastern India II. Projects Contracted By Chinese Companies • Steel plants: 11 projects; • Power plants: 12 projects; • Coal mine: 1 project; • Environmental protection: 4 projects.

  21. Chinese Companies In Eastern India III. Why Come? • Low cost; • Mature technology; • Reliable equipment; • Rich working experience; • High working efficiency; • Short construction period and fast supply of products.

  22. Chinese Companies In Eastern India IV. Trade Between China & India • Trade volume between China & India in 2011: 73.9 billion USD, with 19.7% increase. • Target for 2015: 100 billion USD. • January — May 2012: 28.5 billion USD, 2.8% less than the same period last year. • India’s exports to China: iron ore, machinery, petroleum product, diamond, transportation equipment, etc. • China’s exports to India: electronics, steel, coke, organic chemicals, transportation equipment, etc.

  23. Chapter 4Possible Cooperation Areas Between China & India

  24. Possible Cooperation Areas Between China & India I. Energy Saving Industry • Energy saving is the new strategic industry largely supported by Chinese Government. • China already has the world biggest installed hydro power capacity (230 million kilowatt) and wind power capacity (47 million kilowatt), and the world biggest collector area of solar water heaters. • By 2015, the total production value of energy saving industry is expected to be 4.5 trillion Yuan.

  25. Possible Cooperation Areas Between China & India II. Infrastructure • China’s advantage of infrastructure construction: Mature technology; Reliable equipment; Rich experiences. • India’s ambition for infrastructure construction: 1 trillion USD investment in next five years.

  26. Possible Cooperation Areas Between China & India III. Tourism • The convenient Kunming — Kolkata daily flight is the shortest flight between China and India. • In 2011, Yunnan Province received nearly 4 million (precisely 3,954,000) person times foreign visitors and 163 million person times domestic visitors. Yunnan tourism revenue: 130.03 billion Yuan. • Eastern India has many attractive tourist destinations, such as Tagore literature and Bodh Gaya in Bihar.

  27. Possible Cooperation Areas Between China & India IV. Pharmaceutical Industry • In 2009, India has 175 FDA certified medicine production bases, but China only has 36. • China’s pharmaceutical industry mainly exports drug substance, but India focuses on medicine preparation. • China’s pharmaceutical industry may benefit from India’s researching and talents advantage during the cooperation.

  28. Possible Cooperation Areas Between China & India V. IT Industry • In 2011, India’s IT-BPO (business process outsourcing) industry realized total value of 88.1 billion USD, and created direct employment of 2.5 million and indirect employment of 8.3 million. • New generation IT industry — one of China’s seven new strategic industries in next five years. • China and India can explore more opportunities in the cooperation of IT industry.

  29. Possible Cooperation Areas Between China & India VI. Agriculture • In 2006, China and India signed a MOU for cooperation in agriculture and allied sectors. • Cooperation fields: Tea industry; Agricultural machinery; Irrigation technique, etc.

  30. Thank You!

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