Wealth and size: India is smaller and poorer than China [with a gross national income per capita of approximately $620 ($3,000 in PPP) to China’s $1,500 ($5,000 PPP].
Population growth: in both Giants, population growth has been slowing and is expected to continue to do so. China’s population grew by only 0.6 percent a year during 2001-05, to reach 1.32 billion; it is expected to peak in 2032 and decline thereafter. India’s population grew by 1.4 percent in 2001-05, reaching 1.1 billion, and its growth is expected to slow to 0.7 percent a year between 2030 and 2040 (by which time it will have overtaken China).
Growth of output and income: China accounted for 13 percent of the world growth in output over 1995-2004; India accounted for 3 percent, compared with the United States’ 33 percent.
Domestic markets: The principal drivers in the Giants are their huge workforces, their ability to adapt technology and theirlarge domestic middle-class markets (currently about $1 trillion per year in China and $250 billion in India).
The textile industry: In 2005, exports of textiles and garments amounted to $9.5 billion and $7.5 billion, respectively, versus China’s respective $77 billion and $40 billion. Textiles and clothing account for 7 percent of world exports. China is the leading producer, followed by India. In 2004, Wal-Mart purchased $18 billion worth of goods from China.
Pharmaceuticals: Developing a drug in India can cost as little as $100 million, compared with a cost of $1 billion or more in the United States.
Electronics: China has doubled the scale of the electronics industry, which now accounts for more than 8 percent of industrial output. In India the electronics sub-sector accounts for less than 3 percent of a much smaller industrial sector.
Services sector: Services account for 41 percent of GDP in China versus 51 percent in India.
International balance sheets: In terms of their underlying equity positions (portfolio and FDI holdings), China and India are quite different. In China, equity liabilities primarily take the form of foreign direct investment -- FDI liabilities were equivalent to 25.7 percent of China’s GDP in 2004 versus 6.4 percent for India. Meanwhile, portfolio equity liabilities matter more in India – equal to 9.1 percent of GDP in 2004, while they were just 2.9 percent of China’s GDP.
Naturally available water: Water is scarce in both of the Giants. In 2004, China’s naturally available water flow was 2,206 m3 /person, and India’s was 1,754 m3 / person, compared with an average of 7,762 m3 for developing countries and a world average of 8,549 m3/person.
Energy efficiency: China’s energy use per unit of GDP at market prices and actual exchange rates is 3.5 times that of the US. India’s is 2.7 times larger.
Global carbon emissions: China and India currently contribute 17 percent and 5 percent of global carbon emissions, respectively.
- Dancing with Giants: China, India, and the Global Economy
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