Inida business-standard: India vs China: A tale of two contrasting eco

Discussion in 'China' started by rockdog, Sep 9, 2013.

  1. rockdog

    rockdog Regular Member

    Joined:
    Dec 29, 2010
    Messages:
    180
    Likes Received:
    34
    India vs China: A tale of two contrasting economies | Business Standard

    Barely a year ago, there was talk about China’s economy making a hard landing. Around the same time, there was also chatter about a revival in the Indian economy with P Chidambaram back at the helm in North Block. But fast forward to 12 months later, and it’s astounding how this narrative has done a volte-face.

    Here’s a study in contrast of the two economies basis key economic indicators

    Growth

    Goldman Sachs this Tuesday raised its GDP forecast for China to 7.6%, even as it slashed growth outlook for India to 4% from 6% previously. Several other foreign brokerages including CLSA, Nomura, JP Morgan and HSBC followed suit, cutting India growth estimates by up to 2% as official GDP grew at a four-year low of 4.4% in the first quarter, and other macro-economic indicators deteriorated.

    A spate of recent positive economic data from China, on the other hand has corroborated why Goldman and others are so bullish on China.

    ALSO READ: IMF official praises China's growth story

    PMI:

    Chinese PMI or purchasing managers index for August showed factory activity rising to a 16 month high – up from 50.3 in July to 51 in August. Services PMI at a 5 month high further adds to signs of a recovery. This has fueled expectations of strong August trade data.

    PMI in India on the other hand contracted for the first time in 4 years in August sinking to 48.5 in August from 50.1 in July, with services shrinking at the fastest pace since April 2009 to 47.6 in August from 47.9 in July reflecting a broad-based economic slump.

    ALSO READ: China services PMI at five-month high, adds to signs of recovery

    Auto Sales

    A signal of healthy consumer confidence in the economy is strong auto sales figures. July passenger car sales in China were up 10.5% YOY signaling that confidence was returning after a protracted slowdown.

    Indian automakers on the other hand reported a 7.4% decline in passenger cars compared to the same month in 2012 with overall growth this fiscal expected to be in the negative territory. It is important to note that India was the fastest growing automobile market n 2010 & 2011, next only to China.

    But it will perhaps take a long time to restore this trend. Car buyers are staying away from showrooms amid growing economic gloom, new taxes on SUVs and high interest rates.

    And with the rupee depreciating, a high current account deficit and sticky inflation, maneuvering monitory policy has gotten trickier for India’s policy makers.

    Inflation

    July CPI continued to remain high in India, albeit slowing marginally to 9.64% from 9.87%, but way above the RBI’s comfort zone. Food prices continued to remain in double digits as well.

    In China though, July data showed consumer prices rising 2.7%, well below the 3.5% upper limit set by Beijing, even as producer prices remained deflated, rising calls for a rate cut.

    Currency

    Sanguine calls on the trajectory of China’s currency makes cutting rates their easier.

    A recent poll by news agency Reuters shows that Chinese Yuan will continue to appreciate as the Chinese economy improves. In fact the currency is now within kissing distance of its recent all time highs with the dollar and in line with the Chinese central bank’s decision to allow its currency to slowly appreciate. While that begs the question on what impact this would have on exports, improving economic fundamentals could aid this appreciation say some experts.

    The rupee meanwhile, after a 20% plunge could have bottomed out but is unlikely to appreciate further this year says the same poll – which means inflation will continue to remain high.

    ALSO READ: China turf war over yuan reform rattles foreign firms

    The differences then are stark, but there are also serious doubts raised time and again about the validity of the data China puts out.

    Just recently China’s National Bureau of Statistics admitted that a county government had faked economic figures. The BBC quoting Xinua news agency reports that local officials had induced companies to inflate figures in exchange for loans from state owned banks.

    It further claims (on the discrepancies in data computation between national and local agencies) that “The gap between the national figure and the combined local figures was 2.7 trillion yuan ($440bn; £280bn) in 2009 and rose to 5.8 trillion yuan in 2012. That would have added 11% to China's total GDP last year."

    But data murkiness notwithstanding, and regardless of of the gross imbalances in its economy (including a massive debt burden & overcapacity) China has come in for praise from several quarters recently including the IMF for some critical structural reforms it’s new leadership has undertaken in the past few months.

    China’s Communist Party is expected to advance this reforms drive in a November meeting, setting the country’s economic agenda for the next decade.

    Perhaps it’s time for India to follow suit then and bridge this growing economic chasm. Else, as China’s growth takes a flight, India will have to brace herself for a hard landing.

    ---------------

    Chinese Translation here: 印度vs中国:相互反衬的两个经济体的故事 - 印度经济三泰虎论坛

    I still remember that one year ago some members on this forum just happily waited to see China's ecomony's hard landing, now seems the India's economy is deep in sh*t now, even India's own media said so...
     
    TrueSpirit likes this.
  2.  
  3. badguy2000

    badguy2000 Respected Member Senior Member

    Joined:
    May 20, 2009
    Messages:
    4,957
    Likes Received:
    613
    Re: Inida business-standard: India vs China: A tale of two contrasting

    well, all CHinese datas are cooked while all indian data are credit...
     
    LETHALFORCE likes this.
  4. ersakthivel

    ersakthivel Senior Member Senior Member

    Joined:
    Mar 6, 2011
    Messages:
    6,456
    Likes Received:
    6,647
    Location:
    Erode
  5. rockdog

    rockdog Regular Member

    Joined:
    Dec 29, 2010
    Messages:
    180
    Likes Received:
    34
  6. LETHALFORCE

    LETHALFORCE Moderator Moderator

    Joined:
    Feb 16, 2009
    Messages:
    20,551
    Likes Received:
    6,556
  7. rockdog

    rockdog Regular Member

    Joined:
    Dec 29, 2010
    Messages:
    180
    Likes Received:
    34
  8. bose

    bose Senior Member Senior Member

    Joined:
    Apr 5, 2010
    Messages:
    3,956
    Likes Received:
    2,637
    Location:
    Kolkata, India.
    Re: Inida business-standard: India vs China: A tale of two contrasting

    China's economic data is full of crap and manipulated figures... In reality China's ecomony is no greater than Japan....

    China was dreaming of catching up USA in five years time.... with economic growth rate around 5-6 % and that too slowing down has no other option than to climb down from high horse and now start comparing with Indias economy... very good have a good sleep now...
     
  9. badguy2000

    badguy2000 Respected Member Senior Member

    Joined:
    May 20, 2009
    Messages:
    4,957
    Likes Received:
    613
    Re: Inida business-standard: India vs China: A tale of two contrasting

    CHina's industry output is alreadiy 30% more than USAs.

    In 5-6 years, it will be more than USA+EU+Japan, ,including almost all industry sections,from chip to SHip
     
  10. bose

    bose Senior Member Senior Member

    Joined:
    Apr 5, 2010
    Messages:
    3,956
    Likes Received:
    2,637
    Location:
    Kolkata, India.
    Re: Inida business-standard: India vs China: A tale of two contrasting

    Time will tell... China first have to establish that its economic data are genuine and not inflated...
     
  11. t_co

    t_co Senior Member Senior Member

    Joined:
    Dec 20, 2012
    Messages:
    2,537
    Likes Received:
    699
    Location:
    China
    Re: Inida business-standard: India vs China: A tale of two contrasting

    We're citing figures from the IMF and CIA. How are they "China's" figures?
     
  12. bose

    bose Senior Member Senior Member

    Joined:
    Apr 5, 2010
    Messages:
    3,956
    Likes Received:
    2,637
    Location:
    Kolkata, India.
    Re: Inida business-standard: India vs China: A tale of two contrasting

    I do not see any reference to CIA or IMF figures in this thread...
     
  13. t_co

    t_co Senior Member Senior Member

    Joined:
    Dec 20, 2012
    Messages:
    2,537
    Likes Received:
    699
    Location:
    China
    Re: Inida business-standard: India vs China: A tale of two contrasting

    Select Subjects

    IMF numbers on developing Asia (28 countries incl China and India). Select data series and export as a spreadsheet.

    What you will notice is that the IMF's GDP and Industrial output figures match China's own NBS figures - the figures that we've been citing in this thread.

    On the broader topic of this thread, India's government has under-invested in its workforce ever since 1947 (and I would venture to say since the 1800s). Indian labor lacks the tools (technology, private capital, and public infrastructure), knowledge (education), and basic health (sanitation, disease prevention, cheap female contraception) to deliver enough per-capita output to push wages upwards and nudge the economy into an East Asian "virtuous cycle" of rising wages feeding through banks and subsidizing domestic costs of capital.

    This has nothing to do with a democracy or a dictatorship. This has everything to do with getting Indian decision-makers (both public and private; Mukhesh Ambani is just as guilty here as Sonia Gandhi) to look beyond the next quarter and/or election cycle and invest in your people.

    Instead, Indian decision-makers seem more interested in property speculation, organized racketeering via predatory local governments, building billion-dollar houses, sending their kids to Switzerland, and calling each other names than doing of that.
     
  14. badguy2000

    badguy2000 Respected Member Senior Member

    Joined:
    May 20, 2009
    Messages:
    4,957
    Likes Received:
    613
    Re: Inida business-standard: India vs China: A tale of two contrasting

    well, if based on industrty output index or sale ammount,you can easily find that CHina's GDP might be underestimated ,instead of "inflated".


    For example,
    China's nominal GDP is only 4-5 times of India's

    but
    China's international trade is 10 times of India's
    China's auto sales is 8 times of India's
    China's elelctricity consumption is 8 times of India
    CHina's steel consumption is 8 times of India....
    etc...
     
  15. bose

    bose Senior Member Senior Member

    Joined:
    Apr 5, 2010
    Messages:
    3,956
    Likes Received:
    2,637
    Location:
    Kolkata, India.
    Re: Inida business-standard: India vs China: A tale of two contrasting

    It depends again just as I said the Chinese economic data have been questioned and just because China's steel consumptions is 8 times that of India des not mean that its GDP is 8 times bigger...
     
  16. t_co

    t_co Senior Member Senior Member

    Joined:
    Dec 20, 2012
    Messages:
    2,537
    Likes Received:
    699
    Location:
    China
    Re: Inida business-standard: India vs China: A tale of two contrasting

    Yes, but it does make it more likely that China's GDP has been underestimated, as opposed to overestimated, relative to India's.
     
  17. badguy2000

    badguy2000 Respected Member Senior Member

    Joined:
    May 20, 2009
    Messages:
    4,957
    Likes Received:
    613
    Re: Inida business-standard: India vs China: A tale of two contrasting

    again,

    Chinese buy 2 times of autos than USA, consumes 5 times steels than USA,.
    Chinese alsou consumes much more cellphones, TV sets,AC and other households appliances than USA,

    However, CHina's GDP is only 2/3 of USA, if measued by USD...


    so ,which is more reliable, GDP measued by USD or those real consumption???
     
  18. ersakthivel

    ersakthivel Senior Member Senior Member

    Joined:
    Mar 6, 2011
    Messages:
    6,456
    Likes Received:
    6,647
    Location:
    Erode
    Re: Inida business-standard: India vs China: A tale of two contrasting

    The US based MNCs pull in billions of dollars from world market to US every year.

    And the size of the US services and financial market is massive compared to mainly manufacturing based chinese economy.



    Without consuming such massive amounts of steel US services and financial MNCs pull billions into US every year not to say of the trillions of dollars your govt invests in US treasury bonds for almost zero interest rate,which flows back into US financial services companies further increasing the GDP.

    So that has no impact on GDP calculation perhaps!!!!!!!!!!

    How is that?

    If china consumes more steel in raw material form most of it is meant for creating infra for export and finished export products made of steel and other minerals without doing all this US financial sector produces more GDP.

    Since US population is a fifth of chinese your idea that

    GDP calculation must based on number of cars , Tv sets and cell phone sold is really naive.
     
    Last edited: Sep 18, 2013
  19. ersakthivel

    ersakthivel Senior Member Senior Member

    Joined:
    Mar 6, 2011
    Messages:
    6,456
    Likes Received:
    6,647
    Location:
    Erode
    Re: Inida business-standard: India vs China: A tale of two contrasting

    Most of the big chinese companies recently surveyed are reported to post twice the actual export turnover by illegal accounting process to claim more duty drawbacks .

    And if you have followed Bo Xi lai's case , you would have known the source of funds that were invested by the chinese princelings abroad as well. Most of these comes from illegal accounting practices of such chines companies as well.

    How does make the chinese GDP under estimated?
     
    Last edited: Sep 18, 2013

Share This Page