Chinese-Indian Trade
- The world's most populous countries
Prof. Natalia Navrotskaya
|
International Trade: Modern Trends, Methods of Analysis
Presented by Mark Spektor
10.12.2021
Overview
Motivation, general Statistics
2. Trade History
3. Current Trade (main part including many KPI’s)
4. Conclusion
1.
Why is Chinese – Indian Trade interesting?
These are the two most populous countries in the world
o
o
o
o
Together 36.3% of world population (2019)
Analyzing their trade in a sense looking at trade of 1/3 of world population
The two major regional powers in Asia
Both among worlds fastest growing major economies | avg growth CHN 7.01; IND 7.16 (2013 – 2018)
 India-China trade volume touched $100 bln. mark on 02.11.2021 (September 2021: 90.37 bln.) 5, 6
1. Basic Info (2019)
GDP:
Population:
Country-Size:
Import:
Export:
Trade balance:
China
$ 14 280
1.434
9 596 961
$ 2 068.95
$ 2 498.57
$ 429.62
billion
billion (18.59%)
km²
billion
billion
billion
India
$ 2 871
1.366
3 287 263
$ 478.88
$ 323.25
- $ 155.63
billion
billion (17.71%)
km²
billion
billion
billion
C/I
5x
1.05x
3x
4x
8x
xx
1. Basic Info (2019) Summary
 Both Countries almost equal population
But:
o China exceeds on all comparisons




5x GDP
8x Export
But also 4x Import
//
CHN positive trade balance!
8x more export, but only 4x more import = higher productivity
Not taken into account:
• China 3x the land size  India 3x as dense (less resources per capita)
• Historical background
• Political Regime
2. Trade History (Sino-Indian relations | Indo-Chinese relations)
o China and India historically peaceful relations for thousands of years
•
More tension since rule of Communist Party (border disputes, nationalism)
•
Silk Road used for trade in ancient times (200 BCE to 18th Century CE)
•
In 2008, China became India’s largest trading partner (one-sided)
o Nowadays Joint Economic Group and Business council (institution)
•
Focus: avoid double taxation
Tarun Khanna (HBS) in Harward Business Review:
“The simplest, and most powerful way of combining China and India is to focus on hardware in China and
on software in India.” 7
2. Trade Agreements
Both part of 1975 Asia-Pacific Trade Agreement (APTA | Bangkok Agreement, renamed 2005)
o Multilateral (involves 2.92 bln. People)
o Oldest preferential trade agreement in
Asia-Pacific Region
o Market Size: $14.616 trn. (GDP FY 2015-2016)
8
2. Trade Volume (History  Present)
1. China’s exports increase
faster than Indian
2. China: increasing Trade
Balance surplus (annual)
3. China aggregated Trade
Surplus: $506 bln. (2019)
4. Nov2021: 100bln reached
5. Increasing Trend
https://comtrade.un.org/data
3. Chinese exports to India (broad categories)
3.0% of Chinese Exports:
$74.92 bln to India
$2 498.6 bln Total Exports
(reported by China)
3. Indian Exports to China (broad categories)
5.35% of Indian Exports:
17.28 bln to China
323.25 bln Total Exports
(reported by India)
3. Bilateral Export (more Detailed)
Product
code
'TOTAL
Product label (at HS4)
All products
Value in 2017
'2710
'7207
Semi-finished products of iron or non-alloy steel
$
'2902
Cyclic hydrocarbons
Flat-rolled products of iron or non-alloy steel, of
a width >= 600 mm, hot-rolled, not clad, ...
Crustaceans, whether in shell or not, live, fresh,
chilled, frozen, dried, salted or in brine, ...
containing >= 85% cotton by weight (excluding
that put ...
$ 144.594,00 $
'7208
'0306
Value in 2019
$ 960.525,00 $ 1.349.875,00 $
$ 698.256,00 $
$
-
946.965,00 $ 1.809.983,00 $ 3.376.689,00
974.448,00 $ 3.064.067,00 $ 2.026.557,00 $ 1.186.572,00
$
- $
11,00 $
108.473,00 $ 1.098.879,00
554,00 $
7,00 $
27,00 $
23.122,00 $
781.244,00
593.546,00
$ 1.004.559,00 $
956.844,00 $ 1.158.355,00 $
763.562,00 $
572.196,00
$
245.248,00 $
768.421,00 $
719.302,00 $
515.346,00
'7403
Polymers of ethylene, in primary forms
Copper, refined, and copper alloys, unwrought
(excluding copper alloys of heading 7405)
$ 619.283,00 $ 1.361.199,00 $
619.775,00 $
244.293,00 $
464.255,00
'5201
$
64.817,00 $
Cotton, neither carded nor combed
$ 228.563,00 $
297.649,00 $
272.362,00 $
460.627,00
72.031,00 $
92.694,00 $
170.859,00 $
Ranked by 2020 export volume (https://www.trademap.org/)11
India to China9:
'8529
'8541
'8542
966.006,00 $
'3901
'8471
840.461,00 $ 1.725.796,00 $ 1.740.420,00 $ 1.070.888,00
302.734,00 $
'5205
'TOTAL
Value in 2020
$ 8.914.967,00 $ 12.500.767,00 $ 16.503.442,00 $ 17.278.833,00 $ 19.008.267,00
,
pyrites
bituminous minerals (excluding crude);
preparations containing ...
'2601
Value in 2018
China's exports to India (in 1000 USD)
Value in 2016
'8517
India's exports to China (in 1000 USD)
Value in 2016
Product
Product label (at HS4)
code
'2933
'8504
'2941
'8507
'3102
cotton; gems, precious metals, coins; copper; ores, slag, ash; organic chemicals; salt, sulphur, stone, cement; machines, engines, pumps
All products
Telephone sets, incl.
telephones for cellular
networks or for other
wireless networks; other ...
Automatic data-processing
machines and units
thereof; magnetic or
optical readers, machines
...
Parts suitable for use solely
or principally with
transmission and reception
apparatus for ...
Diodes, transistors and
similar semiconductor
devices; photosensitive
semiconductor devices, ...
Electronic integrated
circuits; parts thereof
Heterocyclic compounds
with nitrogen heteroatom[s] only
Electrical transformers,
static converters, e.g.
rectifiers, and inductors;
parts thereof
58920648
Value in 2017
67925121
Value in 2018
76880637
Value in 2019
74924285
Value in 2020
66726981
$ 6.486.202,00 $ 9.048.085,00 $ 8.900.278,00 $ 6.055.419,00 $ 6.675.484,00
$ 2.164.897,00 $ 3.140.849,00 $ 3.529.480,00 $ 3.660.253,00 $ 4.237.387,00
$ 559.219,00 $ 773.677,00 $ 711.254,00 $ 1.308.591,00 $ 1.713.453,00
$ 2.753.209,00 $ 3.737.636,00 $ 2.575.409,00 $ 1.964.625,00 $ 1.692.832,00
$ 265.412,00 $ 390.684,00 $ 1.817.124,00 $ 2.231.097,00 $ 1.594.839,00
$ 929.569,00 $ 1.160.895,00 $ 1.384.388,00 $ 1.433.746,00 $ 1.546.193,00
$ 652.862,00 $ 859.874,00 $ 892.438,00 $ 1.029.198,00 $ 1.059.247,00
Antibiotics
$ 711.016,00 $ 783.982,00 $ 898.184,00 $ 942.040,00 $ 985.883,00
Electric accumulators, incl.
separators therefor,
whether or not square or
rectangular; parts ...
$ 500.563,00 $ 639.153,00 $ 1.010.284,00 $ 878.234,00 $ 856.833,00
Mineral or chemical
nitrogenous fertilisers
(excluding those in pellet or
similar forms, or ...
$ 509.534,00 $ 275.525,00 $ 239.200,00 $ 677.341,00 $ 794.061,00
China to India10:
electronic equipment; machines, engines, pumps; organic chemicals; fertilizers; iron and steel; plastics; iron or steel products; gems, precious metals, coins; ships, boats; medical, technical equipment
3. Trade as GDP-Share
1.
General linear trend increasing for data-sample
2.
2002 – 2013 especially high Trade GDP-Share
wits.worldbank.org1
3. Revealed Comparative Advantage | Balassa Index
Based on Export
(Trade Flow)
Time Series
Reporter
Name
China
China
China
China
China
China
China
China
China
China
Partner
Name
India
India
India
India
India
India
India
India
India
India
Trade
Flow
Export
Export
Export
Export
Export
Export
Export
Export
Export
Export
Product Group
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Footwear
4,99 3,51 3,52 8,32 9,4 10,2 9,56 9,26 9,99 10,6 7,24 5,5 6,36 6,1 5,47 5,3 5,89 4,79 4,97 5,57 5,84 5,96 4,94 4,13 3,73 4,2 4,26 3,79
Hides and Skins
1,21 1,13 0,89 1,04 1,92 0,95 1,11 0,62 0,79 0,83 1,07 1,31 0,93 1,18 1,24 1,04 1,26 1,23 1,5 2,1 2,47 2,53 2,05 1,74 1,74 2,09 2,62 2,59
Mach and Elec
0,92 0,94 0,54 0,72 0,93 1,04 1,52 1,62 1,79 1,65 2,06 2,22 2,45 2,5 2,47 2,43 2,78 2,95 2,94 2,83 3,2 3,54 3,22 2,79 2,68 3,01 2,7 2,49
Textiles and Clothing 10,2 10,5 4,52 4,74 5,7 4,52 4,74 5,31 5,37 4,21 4,45 4,58 4,97 5,53 4,64 3,82 3,91 3,72 3,74 3,7 3,8 4,08 3,41 2,77 2,31 2,51 2,68 2,46
Capital goods
0,72 0,85 0,45 0,6 0,77 0,89 1,29 1,36 1,44 1,39 1,81 1,81 1,93 2,08 1,88 1,98 1,87 2,39 2,57 2,65 2,75 2,97 2,87 2,44 2,42 2,65 2,42 2,19
Chemicals
2,16 2,66 1,86 2,32 3,07 2,55 2,7 2,56 2,81 2,51 2,7 2,71 2,14 1,97 1,87 1,89 1,66 1,62 1,98 2,06 2,29 2,33 2,34 2,02 1,65 1,67 1,93
2
Miscellaneous
0,35 0,48 0,51 0,55 0,58 0,72 0,92 1,18 1,19 1,09 1,16 1,07 1,12 1,06 0,96 0,89 0,46 2,24 2,48 2,7 2,84 2,07 1,65 1,2 1,08 1,64 1,84 1,75
Plastic or Rubber
0,59 0,53 0,59 0,53 0,44 0,45 0,53 0,45 0,71 0,7 0,7 0,81 0,85 0,97 1,2 1,3 1,28 0,87 0,95 1,21 1,1
1 1,03 0,88 0,92 0,94 1,08 1,22
Consumer goods
0,72 0,39 1,35 0,29 0,29 0,43 0,55 0,71 0,92 1,19 1,17 1,21 1,07 1,05 1,03 1,09 1,07 1,39 1,35 1,31 1,27 1,43 1,25 1,28 1,25 1,26 1,26 1,22
Metals
0,52 1,12 0,44 0,81 1,44 1,65 1,41 1,59 1,33 1,12 0,73 0,94 0,98 1,03 1,68 1,68 1,81 1,12 1,66 1,51 1,48 1,43 1,59 1,27 1,13 1,12 1,12 1,17
Reporter
Name
India
India
India
India
India
India
India
India
India
India
Partner
Name
China
China
China
China
China
China
China
China
China
China
Trade
Flow
Export
Export
Export
Export
Export
Export
Export
Export
Export
Export
Product Group
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Textiles and Clothing 0,42 0,25 0,66 0,69 1,24 1,78 1,8 2,23 2,04 1,8 1,38 0,85 0,93 0,93 2,85 2,81 2,72 2,6 5,33 6,93 10,4 13,2 11,9 10,1 7,75 6,21 6,74 5,76
Footwear
0,08 0,16 0,17 0,48 1,15 2,56 3,22 6,4 7,19 7,51 9,19 8,09 5,9 5,32 7,6 8,51 5,56 7,58 7,48 9,44 11,4 13,5 10,6 8,79 7,52 5,39 4,55 5,47
Animal
9,72 7,29
12 10,3 7,63 3,42 2,25 1,44 6,38 4,8 2,42 1,35 0,94 0,99 1,58 1,09 0,85 1,36 1,14 0,91 0,92 0,94 0,66 0,89 0,58 0,51 1,49 3,4
Hides and Skins
1,76 2,87 4,57 3,25 2,27 1,5 1,82 1,66 1,48 1,62 1,62 1,58 1,53 1,57 1,9 1,91 1,75 2,26 2,35 2,73 4,22 4,46 4,89 4,44 4,89 3,76 3,66 2,8
Chemicals
0,77 1,25 0,94 1,42 0,72 1,02 1,35 1,62 1,85 1,5 1,9 1,42 1,19 1,31 1,44 1,16 0,86 0,97 0,78 0,88 1,35 1,46 1,61 1,98 1,75 2,02 2,64 2,7
Stone and Glass
0,83 2,61 7,01 3,15 1,37 1,89 2,19 5,87 3,63 4,48 4,19 3,65 2,92 2,83 2,66 2,6 2,18 3,79 3,56 4,11 5,95 7,64 6,05 2,43 3,89 3,97 4,59 2,64
Intermediate goods 0,62 1,49 1,12 1,13 1,38 1,33 1,55 1,41 1,48 1,51 1,84 1,99 1,3 1,32 1,39 1,14 0,83 1,25 1,2 1,7 2,48 3,17 3,25 2,93 2,82 2,99 3,18 2,63
Minerals
39,8 22,2 31,8 24,5 16,2 15,8 15,3 23,5 19,7 18,7 18,4 17,2 17,4 13,9 12,3 10,4 8,91 8,37 7,16 5,21 3,33 2,14 1,93 1,89 2,72 2,57 1,93 2,23
Vegetable
0,2 0,21 0,29 1,5 1,2 1,15 1,63 1,95 1,67 0,59 0,45 0,66 0,49 0,48 0,62 0,51 0,39 0,5 0,66 0,83 1,2 1,19 0,87 0,99
1 0,94
1 1,7
Plastic or Rubber
0,05 0,02 0,06 0,69 0,19 0,08 0,05 0,12 0,72 1,38 1,78 1,34 1,01 0,8 0,91 0,41 0,32 0,38 0,36 0,62 0,73 0,8 0,69 0,64 0,54 0,64 1,37 1,54
RCA>1 = advantage
RCA based on:
Ricardian Comparative Advantage Concept
producing at lower opportunity cost
wits.worldbank.org1
3. Export Diversity
Diversity of Product Exports (1988 - 2017)
6.000
5.000
4.000
3.000
2.000
1.000
-
India World Export No. Of exported HS6 digit Products
China World Export No. Of exported HS6 digit Products
1.
Both Countries have a very high Range of Exports (HS6 level diversity)
2.
Highest Value Worldwide: 4987 (US in 1994)
wits.worldbank.org1
3. Export Market Penetration (MPI)
1.
China highest Market Penetration worldwide (surpassing even US and Germany)
2.
India is ranked 8th (out of 208; which is still good)
wits.worldbank.org1
MPI =
# 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑡𝑡𝑡𝑡
# 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑡𝑡𝑡𝑡 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
4. Conclusion
1.
China dominating India on most economic comparisons (despite equal population-size)
2.
China dominating: footwear, hides & skins, mech & elec, textiles and capital goods
3.
India dominating: textiles & clothing, footwear, animals, hides & skins, chemicals and stone & glass
4.
Chinas trade-balance surplus is rising by the year (India is accumulating debt to China)
5.
Both countries export a very wide range of products
6.
China highest Market Penetration worldwide, India ranked 8th
Thank you!
Mark Spektor
References
1.
2.
3.
4.
5.
Data: https://wits.worldbank.org/
Population Statistics: https://www.worldometers.info/demographics/world-demographics/#pop
Country Sizes:
https://en.wikipedia.org/wiki/List_of_countries_and_dependencies_by_area
Growth Rates:
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?year_high_desc=true
https://www.indiatoday.in/business/story/india-china-total-trade-volume-100-billion-mark-2021-1864481-2021-1013
6. https://www.globaltimes.cn/page/202111/1238365.shtml (China-India trade in 2021 exceeds $100 billion for the
first time in October); 02.11.2021: 100 bln.
7. Khanna, Tarun (December 2007). "China + India: The Power of Two". Harvard Business Review
8. APTA: https://www.unescap.org/sites/default/files/APTA%20Brochure%20rev.%2020170116.pdf
9. http://www.worldsrichestcountries.com/top_china_exports.html
10. http://www.worldsrichestcountries.com/top-india-imports.html
11. https://www.trademap.org
12. https://comtrade.un.org/data