GDP Comparison of India and China

3219 Words Sep 19th, 2014 13 Pages
A GDP comparison of India and China
China and India are the two giant’s economies of Asia, which are now regarded as the “success stories” for their massive economic development for the past two decades. On their way to economic growth they have more dissimilarities than similarities. The most common things among them are their ancient civilizations, population, covering substantial geographical areas and developing economies of the world. They both apparently benefited from globalization as well sound macro-economic policies. But on the other side they have different socio-economic-political set ups they had followed different development strategies. China followed the socialistic pattern from the very beginning; India resorted for
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In 2009, China attracted $95 billion FDI inflows, accounting for 1.9 percent of its GDP compared with India’s $36.6 billion inflows, equivalent to 2.7 percent of its gross domestic product. China attracted 2.5 % more FDI’s than India in the year 2009.India’s FDI inflow dropped by 14 percent in 2009 and that of China by 12 percent. India should improve its infrastructure as well credibility of the government to attract FDI’s. India is a vast country with many natural resources including metals, minerals and oil deposits. English speaking ability gives edge over China to improve its service sector. India should sustainably increase it’s invest on infrastructure to attract more FDI’s. Foreign investors, who could invest their money anywhere, find more opportunities and less obstacles in China. (Zhou Siyu, 2010)
Source: http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD/countries/1w-CN-IN?display=graph FDI
Foreign Exchange Reserves and Exchange Rate Policy:
China: Policy on Exchange Rate
China’s exchange rate policy in 1950s and 1960s was mostly determined by the nation’s geo-political, security, and strategic interests. China revised its currency reforms on January 1, 1970, by substituting 10,000 renminpiao for one renminbi (RMB) and it fixed an official rate of 2.46 yuan to a dollar. Since July 2005, China has been implementing the managed exchange rate policy, i.e. the RMB is pegged to a basket of foreign currencies, notably the US dollar. Many
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