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Thursday, July 25, 2024

The development duel: India vs China in 2023


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A major talking point all across the globe during the current times is the rapidly developing economies of the two most populated countries of the world, India and China. And while the world is keeping close tabs on their economy and rise, both the countries are aspiring to become the strongest economy in the continent of Asia, hence turning into a superpower in the region which could lead the continent with ease.

At this point in time, it is crystal clear that India and China are not only at loggerheads as far as diplomatic relations are concerned, but are economic nemesis as well; and in order to see at what level both the countries stand, as far as economic development is concerned, and to determine who is currently winning the battle, we can turn to the latest report released by 3One4 Capital, India- A Startups Nation, which provides us with a comparative study between both the ambitious nations.

As mentioned in the report, as per the estimates of 2023, India’s population growth rate is 0.80 percent, while that of China is 0.1 percent. The male life expectancy in India is, as per estimates of 2021, 68.71 years, and that of China is 75 years. The female life expectancy in both India and China, as per estimates of 2021, is 71.49 years and 80.88 years respectively. As per 2022 estimates, the literacy rate of India is 78 percent, while that of China is 96.8 percent. As far as the GDP of the countries is concerned, according to estimates of 2022-23, the GDP (current) of India is US$ 3, 469 billion, and that of China is US$ 17, 734 billion.

As of 2022 estimates, the GDP growth (Real) is 7 percent in India and 5.2 percent in China; and as of 2023 estimates, the GDP (in PPP) of India is US$ 12, 200 billion, and that of China is US$ 30, 074 billion. Next, if we talk about the per capita income (current) of both the countries as per 2022-23 Second Advance Estimates (SAE), India stands at US$ 2, 467 and China at US$ 12, 970. As per the SAE of 2022-23, the exports (goods and services) of India are at US$ 763 billion, while those of China are US$ 3, 828 billion.

On the other hand, the imports (goods and services) of India are at US$ 916 billion, and those of China are at US$ 2, 720 billion. As of January 2023, the foreign currency reserves of India are US$ 578.8 billion, and of China are US$ 3, 188 billion. As per December 2022, the external debt of India is US$ 613.3 billion, while that of China is US$ 2, 482 billion. Finally, as per 2022 estimates, the debt/GDP ratio in India is 82 percent, and that in China is 273 percent.

As mentioned in 3One4 Capital’s report, according to commercial real estate services and management firm, CBRE, India could achieve a projected GDP of US$ 8 trillion by the year 2030, and a per capita income of US$ 5, 625, on account of India’s demographic dividend and a sharp rise in the working population. It is further mentioned that if India wants to build a US$ 10 trillion economy by 2030, it needs to grow at 16.7 percent CAGR (Compound Annual Growth Rate), and to reach the same by the year 2033, it needs to grow at 11.4 percent CAGR.

And while there is a long way to go for India to achieve these gigantic feats, the GDP growth rate was adversely affected during the spread of the pandemic, similar to all the other countries of the world, but post the COVID-19 period, a new ray of hope has emerged which states that the GDP growth momentum is being regained by India. As per the Economic Survey and budget, India’s real GDP and nominal GDP is expected to grow approximately at 6.5 percent and 10.5 percent respectively during 2023-24.

Sonakshi Datta
Sonakshi Datta
Journalist who wants to cover the truth which others look the other way from.

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