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.
Furthermore, as India’s economy grows and China’s share of exports to the world stablises, India and China will both have an equal playing feel on global negotiations in the near term. However, since the past 35 years+ China has been the dragon economy, therefore analysts expect her to continue to have command and higher authority in international discussions for w while longer. India will gradually catch up, and pull her weight, however expect it to take a while before you see an international impact from India. As a result of India’s rising influence on the global economy, also expect her to be more exposed to global problems such as currency fluctuations. It is a known fact that India imports more goods from China than she exports, leading to a ballooning trade deficit between the nations. A sour point that has been brought up in innumerable bilateral talks, India’s low value of exported goods, corruption and policy restrictions are at the basis of this deficit.In 2013, India-China bilateral trade accounted for 8.5 percent of India’s total trade, but only 1.6 percent of China’s. India’s trade deficit with China accounted for 22 percent of the country’s total trade deficit in 2013. Concluding with a a softer analysis, we look at the number of travelers between both countries. While trade and GDP numbers give us a real idea of the economic strength of China and India, bilateral human traffic gives us an idea of the importance average people in one country give to the other nation. According to the chart below, in 2014, 0.7 million Indians traveled to China, 3.5 times the number of Chinese traveling to India. While the number of Chinese traveling to India is expected to increase due to an rise in investments from China to India, analysts expect the number of India’s in China to be more over the longer term, owning to an understanding that China is still the golden goose for Indians.