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The Rise of China & India. Rapid Economic Growth in China. Economic Growth rates of 9.5% are expected to continue Economic growth of 10.7% from January to September, 2007. Manufacturing. China is now the world’s manufacturing centre. Inflation fears. The rapid growth is leading to inflation.

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Rapid economic growth in china
Rapid Economic Growth in China

  • Economic Growth rates of 9.5% are expected to continue

    • Economic growth of 10.7% from January to September, 2007


  • China is now the world’s manufacturing centre

Inflation fears
Inflation fears

  • The rapid growth is leading to inflation

Monetary policy
Monetary Policy

  • Beijing is taking measures to cool the economy from excessive liquidity and huge investment

    • Money growth leads to lots of money available for lending

    • Tight monetary policy is implemented by revaluating the currency (pushing up the value of the Yuan)

    • China’s central bank has increased interest rates twice in 2006

Other attempts to slow down the chinese economy
Other attempts to slow down the Chinese economy

  • Lending is being directed away from certain sectors

  • The approval process for certain investment projects are being delayed

Emerging east asia
Emerging East Asia

  • Comprised of China, Indonesia, Philippines, Thailand, Vietnam, and smaller economies which include Hong Kong, Singapore, South Korea, and Taiwan

  • The number of people living in poverty (<$1/day) has reduced by 25 million since 2005

Outside factors
Outside factors

  • Outside factors affecting growth, such as a recession in the U.S.

    • Not expected to have a huge impact on Asian growth

      • Domestic consumption and domestic investment are expected to support growth

Rise in income status
Rise in Income status

  • East Asia is increasingly becoming a middle-income region

Challenges to the asian economies
Challenges to the Asian Economies

  • Rapid urbanization

  • Delivery of services

  • Social cohesion

  • Corruption


  • India is fast becoming the world’s main provider of services

India s economic growth
India’s Economic Growth

  • 8.1% annually since 2003 (second only to China’s)

India s rising middle class
India’s Rising Middle Class

  • Since 1986, the middle class has quadrupled to about 250 million

Rising income
Rising Income

  • India’s per capita income has risen from $(US)1178 to $3051 over the past 25 years


  • India has the 3rd largest concentration of educated labour in the world

  • The price of labour is 1/10 of that in the US


  • Indian corporations have become leaders in the production of steel, motorcycle, auto parts, pharmaceuticals, cement and footballs.

Foreign investment
Foreign Investment

  • Over 80% of foreign investment goes towards manufacturing, which is growing at 9% per year.


  • India has 23 billionaires

India china
India & China

  • Make up 1/3 of the world’s population

  • Represent the 2 economies with the largest potential for economic growth


  • The 2 countries were rivals since 1962 over a border dispute


  • The border dispute was resolved


  • In 2004, Indian exports to China increased by 80% and trade between the two countries was worth $20(US) billion

Trading partners
Trading Partners

  • In the next couple of years, China is expected to replace the US and the EU as India’s top trading partner


  • In 2006, the two countries signed an energy cooperation agreement involving the countries’ state oil companies

Share of manufacturing
Share of Manufacturing

  • China & India make up 57% of the world’s manufacturing output

  • Asia’s total share is 70%

Prospects for canada
Prospects for Canada

  • The economic rise of China & India offer Canada and other middle power countries an alternative market in which to trade (rather than the US)

Challenges for india
Challenges for India

  • India’s rural poor have benefited little from its economic boom

  • India has fallen from 124th to 127th on the HDI