-T.S.Chandrashekar
India and China are the rising economic and military Powers with troubled borders, internal security challenges, domestic inequalities, incomplete economic reforms and uncertain ambitions. However both of them have ambition to become super economic power and play dominant role in the world economy.
Fundamental difference between India and Chinese economic models is India takes a service-dominated pattern, while China follows the more traditional production-dominated pattern. If India can be termed as ‘office of the world’, China is the ‘factory of the world’.
The main character of China’s economic development is the predominance of the production sector, which entails phenomena such as focusing on labor-intensive industries, high domestic saving rate, large-scale infrastructure construction, constant increase of FDI and international trade. This development pattern keeps its eyes on both domestic demand and the foreign market.
India’s development pattern is peculiar in its emphasis on consumption rather than investment, domestic demand rather than foreign market, service sector rather than production sector and high-tech industries rather than labor-intensive industries. The Indian economy excels in finance, software and high-level research, and shows robust long term growth potential.
India has a fast growing software industry which has a global status, but does not absorb a sufficient labor force. As a labor abundant country, India’s capital/technology-intensive industries grow faster than labor-intensive industries, leaving many laborers unemployed. For a densely populated country, it would be very challenging to surpass the phase of industrialization and leap forward to the post-industrial phase directly.
With this we have from China the low cost, labor intensive products which have ruined Indian small and medium Industry if protectionism is not taken then the coming days the Industries are completely routed.
Swiped Industries: H.T. Insulators Chinese Imports 98.17%, Bicycles 95.06%, PVC/Plastic Suitcases 94.07%, Terry Towel 94.3%, Boilers 88.36%, Footwear except Leather 82.23%, Leather Shoes 74.48%, fans, mixers & grinders, tube truck, Telephone instruments including mobile phone and accessories, glass sheet are already dominated with more than 65%.
Major Basic Goods: Major basic goods in terms of value imported from China are aluminum, copper and copper products, aluminum sheets/plates, foils, carbon blocks, wires copper and cement all kinds. Chinese share increased considerably in 2006-09 but moderated thereafter.
Capital Goods: H.T insulators, boilers, grinding wheels, packing machinery, air conditioner, electric printers, industrial blowers, forklift, transformers (small), loaders, dc motors, air break , turbines and accessories and others
Intermediate Goods:
The import of intermediate goods have grown faster than the domestic production, and the imports of intermediate goods from china have grown even faster than the import index intermediate goods which china got hold are parts bicycles, auto ancillary and parts, dyes, welding rods, straw and paper boards, glass bottles, lens of all kinds, colour tv picture tubes, lens of all kinds and ic chips and transsisors.
In Consumer Goods: The imports of consumer durables is growing at much faster rate than even the other use based industries and therefore pushing the share of consumer the items where the china’s share in total imports of the respective items is rising are bicycles, pvc/plastics, mixers & grinders, s air conditioners, razor blades, pens, leather garments, wallets, purses, motor cycle, pressure cooker, vitamins, motor cycles, cycle/rickshaw, battery charger.
Here are some of the lists slowly India local industries are getting swallowed by China.
As China and India have large population employment creation has to be more important for this the growth of small and medium Industry is a must. But the ruin of this industry is done by cheap Chinese products can keep unrest and social problems in India.
India’s trade deficit with China reached a record $ 31.4 billion in 2013, with two-way trade declining last year by 1.5 per cent on account of a sharp decline in Indian exports. Indian exports to China last year totalled $ 17.03 billion – a 9.4 per cent fall from last year – out of $ 65.47 total bilateral trade, according to figures released by the Chinese General Administration of Customs (GAC). Chinese exports to India, in recent years largely comprised of machinery, were up 1.6 per cent.
Presently the two-way trade between India and China is expected to touch $100 billion by 2015 but who gains and who loses have to be seen.
(The author holds his doctorate degree on international relationships and is currently the deputy director of Korea trade promotion agency (KOTRA).He can be reached at kotrabangalore@gmail.com The views expressed in this article are those of the author and do not represent the views of Channel Times or any of the websites managed or operated by Trivone Digital Services)