Chinese and Indian Economic

Dynamics and Nepals Benefit

Presenters:
Anjana Chaudhary
Kailash Bhatta
Kalpana Chaudhary
Manjit Shrestha
Manisha Mahato
Presentation Outline

Background of India and China

PESTEL Analysis of India and China
Trade relation between India and China
Nepals trade relation with India and China
Can Nepal became transit for these two economies?
How can Nepal benefit from this vision?
Background of CHINA
China is a communist nation with a socialist market
economy.
It is the world's second largest economy by nominal GDP.
It has increasingly engaged in trade organizations and treaties
in recent years.
It has one of the oldest cultural identities in the world, but is
a young nation in terms of its current economy and
government structure.
Background of INDIA

Behind China, India is the second fastest growing economy.

Its population is expected to overtake China's in 2028 to become the
world's most populous nation.
It is the world's seventh largest by nominal GDP.
In 1991, India became one of the fastest-growing major economies and
is considered a newly industrialized country.
Through increased investment, Indian economy has strengthened in
terms of infrastructure, human capital and labor productivity.
It is the worlds largest recipients of FDI.
PESTEL Analysis
 Political
INDIA CHINA

India is a Sovereign, Secular, Democratic The peoples republic of China is fundamental

Republic with a Parliamentary form of political system.
Government.

The President is the constitutional head of the The Constitution of the PRC provides that
executive of the Union of India. state power belongs to the people.

In India a recognized political party is Multi-party cooperation and political

categorized either as a National Party or a consultation under the leadership of the CPC
State Party. constitute the basic party system in China

Current leader is Narendra Modi. Current leader is Xi Jinping.

 Economic
INDIA CHINA
Capital New Delhi Beijing
Area 3,287,259 km2 9,562,911 km2

Population 1,326 million 1,382 million

Currency Indian rupees (1 EUR=75.2920 INR Chinese yuan (1 EUR=7.8949 CN

Total GDP(PPP)
US$9.49 trillion US$23 trillion
Total GDP Nominal
US$2.628 trillion US$ 12.4 trillion
Per Capital (GDP) $ 17000
$ 1990
Growth rate 7.2% 6.7%
Defence Budget $ 550 billion $ 215 billion
FDI Stock Inward 318.50 billion 1.7 trillion
outward 144.13 billion
 INDIA CHINA
Average salary $ 8671 $ 10 thousands
Human Development 0.624 out of 1 0.727 out of 1
Index
Labour Force 513.7 million 807 million
Education 74.64% 97%
Unemployment 5.0% 4.04%
Corruption 65 out of 100 60 out of 100
Poverty 20.6% 5.1%
Main income source Agriculture, industry & others. Service, industry & others.
Export $ 262.3 billion $ 2.3 trillion
Exports partners European union, US, United Arab Emirates, Us, Hongkong Japan, South korea
Hongkong
Import $ 381 billion $ 1.7 trillion
Import partners China, European Union, Saudi Arabia, South korea, Japan, US, Taiwan
Switzerland
 Social
INDIA
Population of 1,343,490,466
Population growth rate of 1.2%
32.8 % of the population is urban
population density in India is 452 per Km2
The median age in India is 26.9 years.
India population is equivalent to 17.86% of the total
population.
22 official languages
Hinduism (79.8%), Islam (14.2%), Christianity (2.5%),
Sikhism (1.9%) Buddhism (0.8%), Jainism (0.4%) other
religions (0.6%)
CHINA
Population of 1,388,624,023
Population growth rate of 0.5%
59.1 % of the population is urban
population density in China is 148 per Km2
The median age in China is 37.3 years.
China population is equivalent to 18.47% of the total
population.
4 official language
>10% each: non-religious, folk religions and Taoism,
Buddhism. <10% each: Islam, Christianity, Bon.
 Technological & Environmental
INDIA
India's IT Services industry was born in Mumbai in 1967 with
the establishment of the Tata Group in partnership with
Burroughs.
21% of Indians say they use the internet .
14% adults are connected with social networking sites.
Telephone main lines in use is 25.518 Million total
subscriptions.
Industrial production increased by 1.7%
Climate varies from tropical monsoon in south to temperate in
north.
Land use agricultural land: 60.5%
arable land 52.8%; permanent crops 4.2%; permanent pasture
3.5%
forest: 23.1%
other: 16.4% (2011 est.)
CHINA
Science and technology have developed rapidly in the
Peoples Republic of China during the 1990s to 2010s.
71% of Chinese say they use the internet
60% adults are connected with social networking sites.
Telephone main lines in use is 230.996 Million total
subscriptions.
Industrial production increased by 7.6%
Climate is extremely diverse; tropical in south to subarctic in
north
Land use agricultural land: 54.7%
arable land 11.3%; permanent crops 1.6%; permanent pasture
41.8%
forest: 22.3%
other: 23% (2011 est.)
 LEGAL
India China

In recent years in the India, there have been The legal framework for e-commerce is still
many significant legal changes . in its early stage.

Indian Government has made many legal China has little experience for drafting e-
changes and introduced disability commerce legislation for topics like
discrimination legislation and has increased intellectual property rights protection and tax.
the minimum wage.
In India many type of act like license permissi There arent any regulations supporting the
on,copyright permission, and many types of o privacy, recognition of digital signatures,
ther permission.1 consumer rights and validation of electronic
contracts yet.
 Trade between India and China

India and China officially resumed trade in 1978.

In 2008, China replaced United States as Indias largest
Goods trading partner.(51.8 billion US$)
The bilateral trade :
$70.73 billion in (2016) $72.34 billion(2015)
India's trade deficit with China:
$52.68 billion in (2016) $48.48 billion(2015)
Indian companies in China

(Reliance Industries, Binani Cements,Mahindra & Mahindra)

Indian enterprises operating in China either as representative

offices, wholly owned foreign enterprises or joint ventures
with Chinese companies are into manufacturing, IT and IT-
enabled services, trading, banking and allied activities.
Chinese companies in India

( Huawei Technologies, Shanghai Electric, Harbin

Electric)

More than 100 Chinese companies have established

offices/operations in India. Many large Chinese state-
owned companies in the field of machinery and
infrastructure construction have won projects in India
and have opened project offices in India.
Period In $ million
2010 53.05
2011 102.56
2012 240.87
2013 313.02
2014 453.82
2015 1322.81
2016 1611.66
 Cold war
1) Border Dispute
India sees China as occupying 38,000 sq km of its territory in
Aksai Chin(Jammu and Kashmir), while China claims 90,000 sq
km in Arunachal Pradesh.
2) China and Pakistan
China has provided all out military assistance to Pakistan on three
critical fronts: export of defense equipment, assistance in building
Pakistans indigenous defense capability and its nuclear arsenal
 Big project funded by China
Budhigandaki Hydroelectric Project: Gezhouba Group Corporation (CGGC)
1,200 MW 9 (estimated cost $2.5 billion)
West Seti Hydropower Project (750 MW) (Cost: $2 billion)
Pokhara International Airport (Cost: $217 million)
Kathmandu Ring Road Expansion project (Cost: $55 million)
Aircrafts for NAC (Cost: $70 million)
Lumbini Development Project (Cost: $3 billion)
Upper Arun and Tamakoshi V HPP(422 Mw) (Cost: $633 million)
Chameliya Hydropower Project (30 MW )
Upper Trishuli 3A Hydropower Project (60 MW )
 Big Project by India

Arun III hydro electric project (900 MW)

Upper Karnali (900 MW)

Patanjali ayurvedic organic medicine through out Nepal.

Establish and construction of Water treatment at Sundarijal.

 Date COUNTRY NO. OF TOTAL AMOUNT TOTAL PROJECT NO. OF %
PROJECTS OF FDI (Rs. in COST (Rs. in EMPLOYMENT
millions) millions)
2011-12 INDIA 24 3887.82 2,298.00 1754 32%
CHINA 77 1,009.53 986.03 3,326 14%
2012-13 INDIA 41 9,187.11 2,691.57 3,471 14%
CHINA 97 5,956.60 2,771.80 4,943 14%
2013-14 INDIA 22 8,378.69 6,540.83 2,108 32%
CHINA 120 23,292.00 7,334.44 4,648 36%
2014-15 INDIA 25 43,416.19 34,719.00 712 51%
CHINA 154 4,858.66 4,363.25 5,858 6%
2015-16 INDIA 24 2,349.70 1,946.91 789 13%
CHINA 128 6,868.54 6,291.81 5,666 41%
(2016/17) INDIA 28 900.66 702.85 886.00 7%
(6months)
CHINA 122 5747.26 5271.24 3788.00 49%
 One belt one road
Goal is to maintain an open world economic system, and achieve diversified,
independent, balanced, and sustainable development, and also a Chinese
proposal intended to advance regional cooperation, strengthen communications
between civilizations, and safeguard world peace and stability.
 FDI IN NEPAL
Time Period India China Others
2005/06 52 % 9% 39 %
2006/07 33 % 6% 61 %
2010/11 71 % 12 % 17 %
2011/12 32 % 14 % 54 %
2014/15 42 % 12 % 36 %
2015/16 13 % 42 % 45 %
How can Nepal benefit from this vision?
Nepal can attract investment in industries and infrastructure
building by taking advantage of its geostrategic location between
China and India.

Help promote Nepals tourism

Reduce the time and cost of Nepals international trade.