David Smith

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David Smith

• The Sunday Times

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China and India

• The Dragon the Elephant

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They were mighty once before
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And theyre becoming mighty again
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A purple patch for the world economy
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Global living standards are rising
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Global price competition
(a) These data have not been adjusted for missing
trader intra-community (MTIC) fraud. (b) Bank
estimate. Defined as food, beverages and
tobacco, basic materials, fuels,
semi-manufactures and other miscellaneous
goods. (c) Data for 2006 are only available up to
September. The full calendar year estimate has
been calculated by applying the annual growth
rate over this period to the 2005 level.
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China becomes a big oil importer
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Energy use and CO2 emissions
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Different models of development

• China, export and investment-led growth
• India, less open to trade and FDI
• Chinese FDI 10x India a source of strength or
  weakness?
• Chinese emphasis on manufacturing, India on
  services

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Exports goods and services
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Share of services in exports
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Chinas trade-led growth
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Sector growth rates - India
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Sector growth rates China
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FDI has been very important
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China still in the lead on FDI
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India is starting to make progress
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But has a long way to go on FDI
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The golden quadrilateral
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India IT spending
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China versus India

• Demographics
• Old-style manufacturing versus IT services
• How much catching-up does India have to do?

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Indias favourable demographics
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Growth and poverty reduction
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Chinas still running hard
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And may have decoupled from the US
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Indias growth is getting stronger
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The world is tilting to the east
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Chinas trade balance
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. And current account surplus
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Chinas lock on the US
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China and India the future?