Is India really growing faster than China?

[randomradio]

I have high anticipation that India should grow at more than 8-9%. Otherwise, when automation matures in East Asia and Germany in the next decade (In Germany industry 4.0 and in China made-in-China 2025), it would be harder for India to progress at a higher speed.

If you ask me, as far as India is concerned, 10% is the new 8%. If we achieve 10% with the new method, then according to the old method we would only be at 8%. India Inc will not be satisfied with today's 10% growth, we have to aim for higher.

And we are not particularly distressed by manufacturing. Our manufacturing capability is very poor anyway. It's only 17% of the economy.

As far as companies are concerned, automation is a bigger boon to India than it is to China and Europe. Our workforce is unskilled, so there is no extra expenditure necessary to train and pay the workforce if machines take over production. Nor will there be political backlash when the people will be replaced by machines like in China and Europe. This unskilled workforce will just find alternative employment. All that automation worldwide will require back office work also, we can use our English education to good use then.

In the short term, normal agriculture should add 1% to the GDP, our new upcoming transport infrastructure should add another 1% and GST should add 1%. At the very best, transport and GST could add 2% each. India must aim for 10-12% growth.

 

[Jlaw]

Wow.......Japan is so far ahead in this field.
France why do you always have to be almost similar/equal to us in most fields??@vergeness

Another EA nation, SK is ahead of France and UK in many areas

 

[ito]

There is no use comparing China and India, both have billion plus populations. So both will be two of the largest economies on earth. Yes, China has larger economy than India as of now, but given the population sizes, and growth rates both country economies will be similar in size by 2050.

 

[randomradio]

There is no use comparing China and India, both have billion plus populations. So both will be two of the largest economies on earth. Yes, China has larger economy than India as of now, but given the population sizes, and growth rates both country economies will be similar in size by 2050.

Maybe even by 2035.

 

[ito]

Maybe even by 2035.

IMO that would be hard. For that India has to grow at a rate higher than 10% for next decade or so with China staying at 6%.

 

[Offshore]

Maybe even by 2035.

No, you wrong.. It should be around 2020

 

[Echo_419]

I have high anticipation that India should grow at more than 8-9%. Otherwise, when automation matures in East Asia and Germany in the next decade (In Germany industry 4.0 and in China made-in-China 2025), it would be harder for India to progress at a higher speed.

More reforms will be announced shortly, so I think before Modi's reelection in 2019 we can hope to get 8-9%

 

[randomradio]

IMO that would be hard. For that India has to grow at a rate higher than 10% for next decade or so with China staying at 6%.

Yeah, that's the only way. But it's not impossible.

No, you wrong.. It should be around 2020

Jokes aside, China's economy will have to collapse for that to happen, like Japan in 1990.

 

[Jlaw]

Yeah, that's the only way. But it's not impossible.



Jokes aside, China's economy will have to collapse for that to happen, like Japan in 1990.

Japan is still third in GDP with world's highest value added output and highly skilled workforce. Since you said Japan collapse in 1990, why is India still lagging way behind in Japan in all HDI category , forget economics. You won't catch up with them not in our life time

 

[jkroo]

It seems that the topic changed from the speed to the scale.

Let's just do some simple mathematics.
Assume that India have a 10% increasing rate every year and give it a 20 years.
In 2035 India has 1.1^20=6.7275 times bigger GDP.
Assume that China have a 5% increasing rate for 20 years.
In 2035 China has 1.05^20=2.6533 times bigger GDP.
Something wrong? Need another 20 years?

Actually the quickest way is to appreciate rupee by 5 times now, done! india surpass China tomorrow, why wait for 2050 or 2035?

Oh, wait!
There's another way which inspired by the west: India can borrow debts and increase defence spends to $8T, the GDP will surpass China right away, done and super power appear!

PS: GDP=C+G+I+NX

 

[faithfulguy]

It seems that the topic changed from the speed to the scale.

Let's just do some simple mathematics.
Assume that India have a 10% increasing rate every year and give it a 20 years.
In 2035 India has 1.1^20=6.7275 times bigger GDP.
Assume that China have a 5% increasing rate for 20 years.
In 2035 China has 1.05^20=2.6533 times bigger GDP.
Something wrong? Need another 20 years?

Actually the quickest way is to appreciate rupee by 5 times now, done! india surpass China tomorrow, why wait for 2050 or 2035?

Oh, wait!
There's another way which inspired by the west: India can borrow debts and increase defence spends to $8T, the GDP will surpass China right away, done and super power appear!

PS: GDP=C+G+I+NX

Why is India so obsessive with China when there are so many other economies ahead of India.

 

[ohmrlobalobayeh]

Why is India so obsessive with China when there are so many other economies ahead of India.

Both are Asian countries, yet the disparity is huge. some sort of complex in play.

 

[Nilgiri]

China's growth figures are also subject to deep doubt world wide.



Because agriculture is still a decent part of India's economy, and a large fraction of our farmers depend on monsoons. So a poor or good monsoon can effect GDP growth rates to the tune of 1-2%.



Automation of everything is impossible with current technology.

Remember, China's textile industry is declining, china's textile exports are shrinking, China's electronic production is also gradually moving into South East Asia. If everything was automatable this would not happen.





I said every human is capable of equal. And that is true. India will be growing at >5% GDP per capita for at least the next 20 years. China won't be doing that.

I don't deny that culture, state system can't have an influence. They can, and do, but they will not have so drastic a difference that India's GDP per capita can't reach within 10% of China's.



What you are talking about in your opening is total Internet Market, which is different from Online Retail Market. In online retail market, only hard stuff that is purchased online counts. Stuff like etickets, online payments, travel etc. are not counted.

And the graph that @AndrewJin gave was correct. We have a lot of catching up to do in e-commerce.

http://scroll.in/article/734941/indias-e-commerce-sector-is-1-80th-the-size-of-chinas

Those e-commerce numbers are old. It already hit 20 billion for India in 2015 - end.

 

[ohmrlobalobayeh]

There are 4 components of an self-dependent, all weather economy.

1)Heavy Industries (raw material production like iron smelting, steel casting, chemical extraction, rare earths extraction and purification, etc)

then comes(supported by Heavy industries)

2)Manufacturing industries(finished goods production like FMCGs, components with raw materials obtained from the heavy industries)

then comes(supported by a mature Manufacturing industrial base)

3)Hi-tech industries(advanced goods production like electronics, computers, precision parts, microchips, semiconductors, nanotechnology-related components)

with all of the above accompanied by

4)Office sectors to support all 3 industries.

1)Japan lacks heavy industries. Hence she couldn't sustain her economic burst as she has to be heavily dependent on importing raw materials.
2)India has office sectors- but it is in oversupply as she has a lack of the other 3 components- specially manufacturing.
3)Singapore has a lack of all 3, but is in abundance of the last 1. Hence, while she is a global hub for MNCs all over the world, she is EASILY affected by even the slightest recession in other countries.
4)China is an example of a self-dependent(almost, except for oil), all weather, critical mass-filled economy.

 

[Nilgiri]

@Nilgiri

China's E-Commerce Addiction Has Serious Market Potential

I am admittedly an Amazon shopping addict, so it was interesting to have a long conversation recently with Chinese colleagues in Nanning about their own growing addictions to online shopping. They are big fans of Taobao, although they also use other e-commerce sites like JD.com and Suning.com. My colleagues are representative of a larger trend of Chinese consumers shifting partly from brick-and-mortar shopping to online shopping, and expanding online shopping in its own right. E-commerce now represents a high-growth sector.

Though relatively new to online shopping, Chinese consumers already make up for almost half of global online retail sales, and are only growing in numbers. Online retail sales amounted to $581.61 billion in 2015, surging 33.3% from the previous year. The volume of online sales in China now exceeds that in the US, and online sales are expected to grow 20% annually by 2020. Furthermore, online shoppers represent the vanguard of China’s growth story, since they tend to be young, urban, and highly educated. They have a different attitude toward shopping than older generations, which were shaped as savers by more challenging political and economic circumstances. Younger shoppers are more willing to spend.

Compared to brick-and-mortar retailing in China, e-commerce sales often experience fewer licensing requirements and quicker customs clearance. As a result, e-commerce is to some extent replacing shopping in physical marketplaces, and will comprise 42% of growth in private consumption by 2020 according to Boston Consulting and AliResearch. For this reason and others, hypermarkets such as Carrefour and Walmart have shut down a number of stores. Online shopping also allows consumers to access products that are not available in stores, including organic foods and some luxury products from overseas.

As consumers in Tier 1 and Tier 2 cities (think Beijing, Shanghai, but also Chongqing and Chengdu) become increasingly savvy online shoppers, there continues to be large potential for online sales particularly in Tier 3 and 4 cities. E-commerce penetration amounts to 89% in Tier 1 and 2 cities, but only amounts to 62% in Tier 3 and 4 cities, as per the McKinsey iConsumer China 2016 Survey. The online shopper base in Tier 3 and 4 cities is 257 million, a population number that is larger than that of almost all countries in the world (except India, China as a whole, and the United States). That is serious market potential.

To keep up with increasing demand from smaller urban and rural areas, online retailers are seeking to expand logistics infrastructure and services. For example, Alibaba ’s logistics arm, Cainiao, now owns 180,000 express delivery stations for the shipment of products and has recently expanded its fresh food distribution centers across China. The firm recently completed its first external funding round and is expected to spend $16 billion over the next five to eight years to expand its network. Growth in China’s underdeveloped logistics sector can certainly be expected to accompany the expansion of e-commerce.

China’s torrid growth in online shopping reflects increasing incomes, higher education, and more sophisticated consumption patterns of the typical consumer. Due to the expansion of online retail shopping and the necessary logistical services, e-commerce is at the frontier of consumption growth in China.

http://www.forbes.com/sites/sarahsu/2016/07/16/chinas-growing-e-commerce-addiction/#71f1cf7f3b01

NEver doubted China's level, just saying India is at a much lower base but its growing rapidly now after stalling for quite a bit (so the earlier projections are way off since they didnt take into account what happened in 2014 and 2015).

Of course we gotta give it a few years to see how it continues and if the projections of it reaching 100 - 200 billion by 2020 manifest. The real middle class growth (both broadening and deepening) in India starts from 2020 onwards.