China — India Cooperation and Opportunities  Overview of Chinese Economy  Prospects of China in Next Five Years  Chinese Companies In Eastern India  Possible Cooperation Areas Between China and India

Chapter 1 Overview of Chinese Economy

Overview of Chinese Economy  From Rural Economy to Urban Economy  From Planed Economy to Market-based Economy I. Double Transitions

Overview of Chinese Economy II. GDP & Other Developments  Average 9.5% annual growth from  Population growth 1%  Average per capita savings deposit: 23 Yuan in 1978 — 12,400 Yuan In 2006 (About 114 times increase in constant Yuan)  Rural electrification has exceeded 98%  Per capita floor space increased from 8 M 2 to 31 M 2

Overview of Chinese Economy III. Foreign Trade  20.6 billion USD in 1978 to 2973 billion USD in 2010 (Annual over 17% growth).  In 2011, the figure is 3642 billion USD.  The target for 2015 is 5400 billion USD, which will make China NO. 1 in terms of international trade.

Overview of Chinese Economy IV. Foreign Exchange Reserve  Due to continuous increase of trade surplus and high investment growth, China’s foreign exchange reserve is rising exponentially.  By 2010, national foreign exchange reserve increased to 2.8 trillion USD.  By 2011, national foreign exchange reserve increased to trillion USD.

Overview of Chinese Economy V. Rapid Urbanization  In 1978, China’s urbanization rate was 17.92%.  In 2007, China’s urbanization rate reached 46.59%.  By 2011, China’s urbanization rate exceeded 50%.

Year 2007ChinaUKAustraliaUSAFranceGermanyJapanRussiaBrazilIndia Urbanization (%) Overview of Chinese Economy Graph of China’s Urbanization Rate

ItemFirst Industry Second Industry Third Industry %47.9%23.9% %46.86%42.96% Year 2010ChinaUSAJapanUKFranceIndia Third Industry (GDP %) Overview of Chinese Economy VI. Three Industries  In 2011, Third Industry made up 43.1% of China’s total GDP.

Overview of Chinese Economy VII. Poverty Reduction  In 1978, the absolute poor numbered 250 million and poverty incidence was 33.1%.  By 2009, among total population of 1.31 billion, the absolute poor numbered less than 35 million with poverty incidence 2%.  By 2010, the absolute poor numbered million.  By 2011, China raised poverty line from 1196 Yuan to 2300 Yuan (about 1 USD/day, World Bank Poverty Line is 1.25 USD/day). The absolute poor maybe number around 122 million after the increase of poverty line.

Chapter 2 Prospects of China In Next Five Years

Prospects of China in Next 5 Years  Chinese economy will maintain 7%-8% growth.  Urbanization is the major driving force: 2015 urbanization target 51.5%, each year 12 million people – about 4 million families will be urbanized; 200 million rural people will become urban population in next 10 years. I. Stable Economic Growth

Prospects of China in Next 5 Years II. Some Important Figures  Increase service sector contribution from 43% to 47%.  Increase spending on R & D: 2.2% of GDP.  Holding CPI at or below 4%.  Increase non-fossil fuel use to 11.4%.  Reduction of energy use per unit of GDP: 16%.  Increase forest coverage by 21.6%.  Average per capita GDP increase to 6000 USD. (2011 per capita GDP is 5414 USD, world ranking 89)

Prospects of China in Next 5 Years III. Change of the Pattern of Economic Development  Problem: Imbalanced, uncoordinated & unsustainable development.  Goal: From export & investment to consumption, export & investment; From development of second industry to coordinated development of 3 industries; From resource consumption to technology & labor quality and management innovation.

Prospects of China in Next 5 Years V. Lower GDP Growth Target To 7%  Emphasize the quality of economic growth.  Economic structure more important than economic aggregate.  Environmental Protection: Circular economy; Low-carbon economy; Environment friendly economy.  Economic growth with improving people’s livelihood.

Prospects of China in Next 5 Years V. Middle & Western China — New Popular Regions In the Future  Major metropolitans such as Shanghai & Guangzhou restricted by high cost, transportation & population.  Middle & western regions rich in natural resources.  With 18,000 KM border line and neighboring 14 countries, middle & western regions will be the theme for further opening-up to middle, south and southeast Asia.  Middle and western regions will mainly develop and upgrade resources processing industry, equipment manufacturing industry and modern service industry.

Prospects of China in Next 5 Years VI. New Strategic Industries  New energy: nuclear, wind & solar power.  Environment friendly and energy saving: energy reduction technology.  New generation IT: broadband networks, internet security infrastructure, network convergence.  Biotechnology: drugs and medical devices.  New materials: rare earths and high-end semiconductors.  Automobiles of new energy: clean energy vehicles.  High-end equipment manufacturing: aviation equipment, satellite and applications, railway transportation equipment, marine engineering equipment, and smart manufacturing equipment.

Chapter 3 Chinese Companies In Eastern India

Chinese Companies In Eastern India I. Details of Cooperation  In the five states of Eastern India (West Bengal, Orissa, Bihar, Jharkhand, Chhattisgarh), about 15 Chinese companies contract 28 projects.  These projects include: metallurgy, power plant, mining, etc.  Chinese companies directly hire around 14,000 Indian employees in these projects.

Chinese Companies In Eastern India II. Projects Contracted By Chinese Companies  Steel plants: 11 projects;  Power plants: 12 projects;  Coal mine: 1 project;  Environmental protection: 4 projects.

Chinese Companies In Eastern India III. Why Come?  Low cost;  Mature technology;  Reliable equipment;  Rich working experience;  High working efficiency;  Short construction period and fast supply of products.

Chinese Companies In Eastern India IV. Trade Between China & India  Trade volume between China & India in 2011: 73.9 billion USD, with 19.7% increase.  Target for 2015: 100 billion USD.  January — May 2012: 28.5 billion USD, 2.8% less than the same period last year.  India’s exports to China: iron ore, machinery, petroleum product, diamond, transportation equipment, etc.  China’s exports to India: electronics, steel, coke, organic chemicals, transportation equipment, etc.

Chapter 4 Possible Cooperation Areas Between China & India

Possible Cooperation Areas Between China & India I. Energy Saving Industry  Energy saving is the new strategic industry largely supported by Chinese Government.  China already has the world biggest installed hydro power capacity (230 million kilowatt) and wind power capacity (47 million kilowatt), and the world biggest collector area of solar water heaters.  By 2015, the total production value of energy saving industry is expected to be 4.5 trillion Yuan.

Possible Cooperation Areas Between China & India II. Infrastructure  China’s advantage of infrastructure construction: Mature technology; Reliable equipment; Rich experiences.  India’s ambition for infrastructure construction: 1 trillion USD investment in next five years.

Possible Cooperation Areas Between China & India III. Tourism  The convenient Kunming — Kolkata daily flight is the shortest flight between China and India.  In 2011, Yunnan Province received nearly 4 million (precisely 3,954,000) person times foreign visitors and 163 million person times domestic visitors. Yunnan tourism revenue: billion Yuan.  Eastern India has many attractive tourist destinations, such as Tagore literature and Bodh Gaya in Bihar.

Possible Cooperation Areas Between China & India IV. Pharmaceutical Industry  In 2009, India has 175 FDA certified medicine production bases, but China only has 36.  China’s pharmaceutical industry mainly exports drug substance, but India focuses on medicine preparation.  China’s pharmaceutical industry may benefit from India’s researching and talents advantage during the cooperation.

Possible Cooperation Areas Between China & India V. IT Industry  In 2011, India’s IT-BPO (business process outsourcing) industry realized total value of 88.1 billion USD, and created direct employment of 2.5 million and indirect employment of 8.3 million.  New generation IT industry — one of China’s seven new strategic industries in next five years.  China and India can explore more opportunities in the cooperation of IT industry.

Possible Cooperation Areas Between China & India VI. Agriculture  In 2006, China and India signed a MOU for cooperation in agriculture and allied sectors.  Cooperation fields: Tea industry; Agricultural machinery; Irrigation technique, etc.

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