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June, 2015

  • BCIM map

    Border relations between sweet and sour neighbours India and China are showing slight improvements with the BCIM – Bangladesh – China – India – Myanmar project finally getting off on the right foot. The New Silk road project which has an estimated trade potential of US$132 billion,has just 200 kms of road to be concretized before Kolkata in India will seamlessly be connected with Kunming in China.

    The BCIM economic corridor is expected to add a major boost to India-China trade as India looks at developing her North-East region bordering China and Beijing looks for alternative routes to the strait of Malacca. Both governments hope that the BCIM economic corridor will be a starting point for stronger bilateral relations. An Indian consulate in Kunming and a Chinese consulate in Kolkata are already in place.

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  • india-retail-ecommerce India’s digital space is expanding exponentially and has a huge potential for growth. While the country has already become the cynosure for software, bouyed by the growth of smartphones, an ecommerce revolution is brewing, with B2C and B2B companies vying for top consumer sales.

    Analysts pin the reason to India’s large and growing consumer base whose disposable income is only set to increase, raising the desire to consume more products and drive sales of both smartphones and online retail up. According to an eMarketer report, India’s e-commerce sales in 2014 were US$5.3 billion, 1/80th the size of China’s US$426.26 billion and 1/58th the size of the US’ US$305.6 billion. China will likely exceed US$1 trillion in retail ecommerce sales by 2018, accounting for more than 40 percent of the total worldwide. Similarly, although India has a population of 1.3 billion, making it the world’s third largest market, slightly more than one in 10 own a smartphone, creating a huge potential for growth.

    Considering that India’s population is expected to surpass China’s by 2028, the magnanimity of growth for consumer led digital devices and services is humongous. Its no wonder then, that Jack Ma has decided to start selling in India in August this year. The Hangzhou based entrepreneur millionaire, has already been to India twice this year to meet key decision makers including Prime Minister Modi. Smelling ripe opportunity Ma, has also appointed a startup-genius Suhas Gopinath to help him identify Indian companies in the digital space worth investing in. Confirming the growth potential in the Ecommerce market, Flipkart, India’s largest e-commerce firm, recently raised US$550 million at a valuation of US$15 billion.

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  • In the second part of our India – China in Numbers series, we compare trade in products and services between the sweet and sour neighbours. We also look at the resultant impact both nations have on the world economy and the weight they can thereby leverage on international negotiations. Lastly, we look at the traffic of people – businesmen and tourists between China and India to determine whom is more interested in maintaining better bilateral relations.

    In the chart below, we analyse the reason behind why China is known as the factory of the world and India the global back office.

    China clearly outstrips India in trade of products, while India reigns over China in  services. In 2013, India had a deficit of US$143 billion in goods trade whereas it had a surplus of US$73 billion in services trade. In contrast, China had a surplus of US$360 billion in goods trade but a deficit of US$125 billion in services trade.

    product-trade

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  • The debate for which Asian economy – India or China is growing faster, better or stronger rages on in financial circles as investors and governments vie to fraternize with either nation. To give this argument a logical spin, Inchin Closer presents the Asian giants in numbers. Below are a few charts that will help explain where India and China came from and the direction each nation is heading towards. On a more macro level, we will also help analyse whether polices taken today will augment well for the countries going forward. This is the first in a 2 part series.

    real-GDO-growth

    According to the IMF, as China’s  economy slows and India’s picks up pace, the tiger is supposed to outrun the dragon before the end of this year, albeit marginally. According to real GDP numbers compounded, China has succeeded in growing faster and stronger than India for the past 35 years (except 3 years). However as of the end of 2014, India’s GDP is now expected to be faster than China’s.

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