The Elephant VS The Dragon






India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and served to accelerate the country's growth, which averaged fewer than 7% per year from 1997 to 2011. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly less than half of the work force is in agriculture, but, services are the major source of economic growth, accounting for nearly two-thirds of India's output with less than one-third of its labour force.

Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries.



BRIC: a brief overview of the new economic powerhouses in 2030



Many analysts believe the fate of the future global economic systems will fall into the hands of not only India and China, but Russia and Brazil, as well. The economic growth of these "BRIC" countries up through 2030 is overwhelming. Their real GDP will grow by 7.9% p.a. over the next 20 years. The emerging equity markets will grow significantly by 9.3% p.a. to USD 80 trillion by 2030, while global equity market capitalization (in fixed 2010 USD) will increase. Real GDP proportions in 2010 and 2030 (Source: Goldman Sachs; EIU; IMF; MIGA; World Bank; Roland Berger).

The purchasing power of billions of people in the BRIC markets will increase significantly by 2030. China's real GDP will grow by 7.9% p.a. over the next 20 years, much faster than over the past 20 years (5.6%). The BRIC countries will generate 36% of global GDP in 2030, compared to today. The annual real GDP growth rate will be the strongest at 9.0%, followed by India (8.4%), Brazil (5.5%) and Russia 8% (5.3%). China will overtake the United States to become the world's largest economy by the mid to late 2020s. India's will be one economy in 2030, accounting for 5.7% of the world's GDP.

Brazil will overtake Japan in 2030. Real exports of the BRIC countries will increase at the same rate as their GDP at 7.8% p.a. –- quarter the size of the Chinese i.e. faster than the average for the developing countries (6.7% p.a.), but slower than over the last 20 years (10% p.a.). The BRIC countries' share of global exports (23%) will be almost on a par with that of Europe. Today it is only 14%, up from 5.8% in 1990. China and India will become the global suppliers of manufactured goods and services, Brazil and Russia of raw materials. India's real exports will grow the fastest at 13% p.a. up to 2030, followed by China (7.1%), Brazil (6.5%) and Russia (4.9%). China will generate 14% of the world's export, India 6.4%.

All the BRIC countries will still be among the world's most attractive locations for FDI in 2030, due to their prospects for economic growth and wealth in resources. The strongest FDI growth rates are expected for India, followed by Brazil, Russia and China.The reason for China's slower growth is the strong basis it already has today (9% of world FDI). As India catches up to China, it around 70% of China's FDI inflows as early as 2014.The road to global prosperity will eventually go through.

STATS
China
India
Business >Companies >Corporate governance (overall rating)
3.37 
Ranked 34th.
4.54 
Ranked 20th. 35% more than China
Business >Companies >Specific companies > Carrefour > First store
1,995 
Ranked 20th.
2,010 
Ranked 3rd. 1% more than China
Debt > Government debt >Gross government debt, share of GDP
22.85 IMF 
Ranked 142nd.
66.84 IMF 
Ranked 43th. 3 times more than China
Debt > Government debt >Public debt, share of GDP
31.7 CIA 
Ranked 110th.
49.6 CIA 
Ranked 64th. 56% more than China
Debt > Interest rates > Central bank discount rate
6% 
Ranked 60th.
7.5% 
Ranked 48th. 25% more than China
Government >Revenue > Tax >Taxes foreign income of nonresident citizens
no
no
Government >Revenue > Tax >Taxes foreign income of resident foreigners
yes
yes
Government >Revenue > Tax >Taxes local income of nonresident individuals
yes
yes
Government >Revenue > Tax >Taxes local income of resident foreigners
yes
yes
Size of economy >Share of world GDP
3.47% 
Ranked 5th. 2 times more than India
1.45% 
Ranked 11th.






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