China and India: The Reality Beyond the Hype

This is a report from Deloitte. For more deatil, please visit here.

Some facts:

In 2005, China’s merchandise exports were US$764 billion versus US$96 billion for India. By comparison, Korea’s exports were US$290 billion and Thailand’s were US$110 billion.

In 2004, China’s service exports were US$62 billion versus US$40 billion for India. On the other hand, 60% ofChina’s service exports were travel and transportation services while in India the figure was 22%.

Budget deficit: 10% of GDP in India versus 2% in China

In the period 1993-2001, 53% of adult Chinese worked while only 37.7% of Indians worked. This was largely due to the lower female participation in India, itself the result of cultural factors.

In 2002 China spent US$128 billion on power and transport infrastructure compared to US$18 billion for India.

China’s highway network amounts to 1.4 million kilometers compared to 200,000 kilometers for India. Finally, due to insufficient port capacity, the lead time for Indian exports to the US is roughly three to four times greater than Chinese exports.

India’s average tariff fell from 56% in 1990 to 28% in 2004. By comparison, China’s average tariff dropped from 32% to 6% over the same period.

In 2003, India’s exports of commercial services other than travel, transportation, and finance amounted to US$18.9 billion. The figure for China was US$20.6 billion. In other words, China may already be ahead of India in selling IT services to the world.

Roughly 15% of China’s population aged 18 to 23 is enrolled in higher education compared to 7% in India. 91% of Chinese adults are literate versus 61% in India. Among females, the numbers are 87% and 45% respectively. In China, there are 18 pupils per teacher in secondary schoolsversus 34 in India. Clearly, China has an advantage when it comes to education.

China spends more money on research and development, has greater ubiquity of computers and internet users, and publishes more articles in scientific and technical journals.

In 2002 the typical monthly wage of a manufacturing worker in India was US$23.80 while in China the figure was US$110.80, according to the IMF.

In 2004, China received $60.6 billion in foreign investment versus $5.5 billion going to India.