India vs China: Miles to cover for Indian economy
As Chinese President Xi Jinping meets Prime Minister Narendra Modi in Chennai and talks on several issues ranging from geopolitics to trade, here is a look at the two economies and their performance over the years.
Although India is frequently pitted against its northern neighbour in terms of economic growth, data shows that the Indian economy is much behind China. With a gross domestic product (GDP) of $13.60 trillion in 2018, as per data from the World Bank, the Chinese economy is around five times larger than India which was at $2.72 trillion last year.
Chinese GDP had reached $2.75 trillion way back in 2006, the data from World Bank showed. This shows that in economic terms, Indian is around 12 years behind China.
India now has set a target of reaching the $5 trillion by end of the financial year 2024-25.
Similar is the trend in per capital Gross National Income (GNI), whereby China is over seven times ahead of India. The per capita GNI of China in 2018 was $9,470, compared to $2,020 in India.
Although, the two countries have immense trade potential, India stands with a major trade deficit with the world's second largest economy.
Data from PHD Chamber of Commerce showed that China exported goods worth around $60 billion in 2016 to India, while India exported products worth $9 billion to China in the same year.
"The trade figures between India and China witnessed a tremendous jump from $2.71 billion in 2001 to around 70 billion in 2016. Importantly, majority of the trade remained in favour of China as it exported around $60.48 billion and imported $9 billion during 2016," a report by the chamber said.
"China's share in India's total trade stood at around 11 per cent during 2016. Further, its share in India's total exports stood at 3.7 per cent whereas its share in India's overall imports stood at 16 per cent during the same period. Comparatively, the growth of India's imports from China was laggard with respect to exports. The trend in trade deficit gap for India exponentially widened over the years," it said.
A major difference between the two countries is the ability to grow fast. China has been able to grow rapidly on a sustained basis instead of short spans of growth spike.
The two countries, although with a huge gap in economic terms form the biggest markets in the world and are major players in world economy.
As Modi and Xi go ahead with their informal talks, the trade deficit and issues of trade tensions between the two countries would come up, and hopes remain that the talks aid early resolution of the issues and help in better economic ties between the world's second and the fifth largest economies.IANS