Rapid Economic Growth in Rapid Economic Growth in ChinaChina
Economic Growth rates of 9.5% are Economic Growth rates of 9.5% are expected to continueexpected to continue Economic growth of 10.7% from Economic growth of 10.7% from
January to September, 2007January to September, 2007
ManufacturingManufacturing
China is now the world’s China is now the world’s manufacturing centremanufacturing centre
Inflation fearsInflation fears
The rapid growth is leading to The rapid growth is leading to inflationinflation
Monetary PolicyMonetary Policy Beijing is taking measures to cool the Beijing is taking measures to cool the
economy from excessive liquidity and economy from excessive liquidity and huge investmenthuge investment
Money growth leads to lots of money available Money growth leads to lots of money available for lendingfor lending
Tight monetary policy is implemented by Tight monetary policy is implemented by revaluating the currency (pushing up the revaluating the currency (pushing up the value of the Yuan)value of the Yuan)
China’s central bank has increased interest China’s central bank has increased interest rates twice in 2006rates twice in 2006
Other attempts to slow Other attempts to slow down the Chinese economydown the Chinese economy
Lending is being directed away from Lending is being directed away from certain sectors certain sectors
The approval process for certain The approval process for certain investment projects are being investment projects are being delayeddelayed
Emerging East AsiaEmerging East Asia Comprised of China, Indonesia, Comprised of China, Indonesia,
Philippines, Thailand, Vietnam, and Philippines, Thailand, Vietnam, and smaller economies which include smaller economies which include Hong Kong, Singapore, South Korea, Hong Kong, Singapore, South Korea, and Taiwanand Taiwan
The number of people living in poverty The number of people living in poverty (<$1/day) has reduced by 25 million (<$1/day) has reduced by 25 million since 2005 since 2005
Outside factorsOutside factors Outside factors affecting growth, Outside factors affecting growth,
such as a recession in the U.S.such as a recession in the U.S. Not expected to have a huge impact on Not expected to have a huge impact on
Asian growth Asian growth Domestic consumption and domestic Domestic consumption and domestic
investment are expected to support growthinvestment are expected to support growth
Rise in Income statusRise in Income status
East Asia is increasingly becoming a East Asia is increasingly becoming a middle-income regionmiddle-income region
Challenges to the Asian Challenges to the Asian EconomiesEconomies
Rapid urbanizationRapid urbanization
Delivery of servicesDelivery of services
Social cohesionSocial cohesion
CorruptionCorruption
IndiaIndia
India is fast becoming the world’s India is fast becoming the world’s main provider of servicesmain provider of services
India’s Economic GrowthIndia’s Economic Growth
8.1% annually since 2003 (second 8.1% annually since 2003 (second only to China’s)only to China’s)
India’s Rising Middle India’s Rising Middle ClassClass
Since 1986, the middle class has Since 1986, the middle class has quadrupled to about 250 millionquadrupled to about 250 million
Rising IncomeRising Income
India’s per capita income has risen India’s per capita income has risen from $(US)1178 to $3051 over the from $(US)1178 to $3051 over the past 25 yearspast 25 years
EducationEducation
India has the 3India has the 3rdrd largest largest concentration of educated labour in concentration of educated labour in the worldthe world
The price of labour is 1/10 of that in The price of labour is 1/10 of that in the USthe US
ManufacturingManufacturing
Indian corporations have become Indian corporations have become leaders in the production of steel, leaders in the production of steel, motorcycle, auto parts, motorcycle, auto parts, pharmaceuticals, cement and pharmaceuticals, cement and footballs.footballs.
Foreign InvestmentForeign Investment
Over 80% of foreign investment goes Over 80% of foreign investment goes towards manufacturing, which is towards manufacturing, which is growing at 9% per year.growing at 9% per year.
India & ChinaIndia & China
Make up 1/3 of the world’s Make up 1/3 of the world’s populationpopulation
Represent the 2 economies with the Represent the 2 economies with the largest potential for economic largest potential for economic growthgrowth
HistoryHistory
The 2 countries were rivals since The 2 countries were rivals since 1962 over a border dispute1962 over a border dispute
TradeTrade
In 2004, Indian exports to China In 2004, Indian exports to China increased by 80% and trade between increased by 80% and trade between the two countries was worth the two countries was worth $20(US) billion $20(US) billion
Trading PartnersTrading Partners
In the next couple of years, China is In the next couple of years, China is expected to replace the US and the expected to replace the US and the EU as India’s top trading partnerEU as India’s top trading partner
EnergyEnergy
In 2006, the two countries signed an In 2006, the two countries signed an energy cooperation agreement energy cooperation agreement involving the countries’ state oil involving the countries’ state oil companiescompanies
Share of ManufacturingShare of Manufacturing
China & India make up 57% of the China & India make up 57% of the world’s manufacturing outputworld’s manufacturing output
Asia’s total share is 70%Asia’s total share is 70%
Prospects for CanadaProspects for Canada
The economic rise of China & India The economic rise of China & India offer Canada and other middle offer Canada and other middle power countries an alternative power countries an alternative market in which to trade (rather market in which to trade (rather than the US)than the US)