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China Vs India
2nd June, 2016
2
Cement
3
Major Cement Producers of the World
Source: www.statista.com
Rank Country 2010 2011 2012 2013 2014 2015 CAGR
1 China 1880 2110 2210 2420 2480 2350 4.6%
2 India 210 240 270 280 260 270 5.2%
3 USA 67 69 75 77 83 84 4.6%
4 Turkey 63 64 64 71 75 77 4.1%
5 Brazil 59 64 69 70 72 72 4.1%
6 Russia 50 56 62 66 68 69 6.7%
7 Iran 50 61 70 72 65 65 5.4%
8 Indonesia 22 30 32 56 65 65 24.2%
9 Vietnam 50 59 60 58 61 61 4.1%
10 Japan 52 51 51 57 54 55 1.1%
Total 2503 2804 2963 3227 3283 3168
4
World Cement Facts
World cement
production is
said to be at
4100 MnT for
2015.
China is the
cement leader
of the world
with 3500 MnT
per annum
capacity.
India is second
in the race with
441 MnT
capacity. USA
the third.
Leading world capacities
China used more cement in three years
than the U.S used in the entire 20th
century
U.S.
• Consumed 4.5
Gigatons in last
100 years
China
• Consumed
6.6 Gigatons
in the last 3
years
The global market is sized at 237
billion US dollars
Rank Company Country
Capacity
(Mt/yr)
1 CNBM (Sinoma) China 400
2 LafargeHolcim Switzerland 387
3 Anhui Conch China 285
4 Jidong Development China 130
5 Heidelberg Cement Germany 129
6 Shanshui (Sunnsy) China 100
7 Cemex Mexico 94
8 Aditya Birla Group India 91
9 China Resources China 78
10 Taiwan Cement Taiwan 69
Source: Company websites and ARs
Leader companies' Capacities
5
Per Capita Cement Consumption
World Cement Consumption
Kg/person 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
China 462 486 560 663 751 810 913 999 1033 1199 1380 1522 1595 1627
India 90 86 105 109 113 122 135 145 150 164 186 196 198 188
USA 397 401 377 388 402 421 400 360 302 221 226 228 253 262
Russia 209 229 248 267 289 322 367 430 428 309 346 403 444 467
Indonesia 109 123 128 128 138 142 143 150 165 164 172 199 225 248
462 486
560
663
751
810
913
999
1033
1199
1380
1522
1595 1627
0
200
400
600
800
1000
1200
1400
1600
1800
1 2 3 4 5 6 7 8 9 10 11 12 13 14
China India USA Russia Indonesia
6
Cement Comparison between India & China
India
441
270
317
Rs/Ton
171
26
2,341,000
33.3%
44.3%
China
4100
2350
302
RMB/Ton
1808
739
10,540,000
19.9%
24.2%
Capacity (MnT)
Production (MnT)
Cement Prices (as on Sept, 2015)
CO2 Emissions (including fossil fuels)
WHRS Capacity
Consumption per capita(Kg/person)
Top 3 Companies’ Contribution in the
Capacity of their Country
Top 5 Companies’ Contribution in the
Capacity of their Country
7
CHINA & INDIA
8
Demographics
9
Population Pyramid: Similar Phase
Source: http://populationpyramid.net
10
Population Pyramid: China Deteriorating
Source: http://populationpyramid.net
11
Population Pyramid: Continued Deterioration
Source: http://populationpyramid.net
12
Infrastructure & Investment
13
Cement Consumption
58 90
209
1990 2000 2014
India
178
462
1803
1990 2000 2014
China
(Figures in Kilogram/person)
14
Power Production
293
570
1296
1990 2000 2014
India
621
1356
5583
1990 2000 2014
China
(Figures in TWh)
2000 2014
India
2000 2014
China
15
FDI
(In US dollars)
3.5 Billion
33.9 Billion 38.4 Billion
289 Billion
16
Urbanization Rate
25.60%
27.70%
32.40%
1990 2000 2014
India
26.40%
35.90%
54.40%
1990 2000 2014
China
Rapid Urbanization rate for China
57,800
68,700
112,000
1990 2000 2014
China
17
Railways
78,607 81,865
89,919
1990 2000 2014
India
(Figures in running track kms)
18
How much has been invested in China?
(In 100 million RMB at 2011 values)
($10,703)
($341)
19
On what has that investment been made?
Power Roads Dams Services
Manufacturing was preferred over Services
20
Where has the money come from?
Starting with 2003,
Self-raised funds has continuously
comprised more than half of all
investment sources.
21
China’s Success..
22
Why China Grew at a Rapid Pace?
Factors China India
Liberalization 1978 1991
Demographics One Child Policy No such policies
HDI(2015) 0.727 0.609
Political Party 1(Communist Party) Many(Capitalist Economy)
Sector focused Manufacturing Sector Service Sector
Increasing Urbanization Tackled using strict land
acquisition reforms and LGFVs
No such reforms in India
Unique parameters
attributing to growth
Cheap and Skilled Labor, Rural
Entrepreneurship, Creative
Entrepreneurship, Centralization,
Exploitation of Economies of
Scale.
Cheap but mostly unskilled
Labor, Reliability on Agriculture
and Service Sector.
Power Shortage Tackled it effectively in different
phases removing its power
shortage problems.
Has been facing power
shortages since a long time due
to low power generation and the
Discoms’ inability to pay its debts
Technique used to
improve Railway Sector
4 phase approach No such approach used
23
China’s 4 phase technique to Railways
In order to develop Railways, China used the 4 phase technique
where they initially focused on the Ordinary speed trains and then
gradually moved their way up to High-speed trains.
24
Local Government Financing Vehicles
LGFV is a company created
by the local government,
which is in charge of
collecting local farmland,
moving the farmers off the
land, then rezoning it for
urban use.
This land is bundled
up into a bond, which
is sold to China's most
powerful bank, China
Development Bank
(CDB).
CDB is wholly
state-owned by
the Chinese
Communist Party.
After buying the
bond, it provides
financing money
to the LGFV.
Then, the LGFV
invites developers
to submit
development plans,
and develop the
land.
• China has more than 10K LGFVs
at present.
• Largely helped tackle the rising
Urbanization situation of China.
• Drawback – Creation of Ghosts’
town. These are the towns that got
created due to excess investments
on housing that were not taken up
by the local residents to dwell.
25
China’s approach to power shortages
1978-1996
• This was the period of huge power
shortages.
• The Chinese government
responded to the crisis by allowing
local investors to invest in
generating capacity.
• The government imposed a tariff of
0.02 Yuan (0.32¢)/kWh on
industrial end users to
compensate investors. This solved
the power shortage problem of that
phase.
2003-2006
• Demand by high-energy-consuming
industries led to another phase of
power shortage.
• The Chinese government
responded by allowing local
governments to make power
generation investment decisions
without central government
approval.
• Simultaneously, the central
government began a market-
oriented restructuring of state-
owned power generation assets
during which “unbundling” of
generation assets took place.
• State Power Corp. was separated
into five separate major power
generation corporations and two
power grid corporations as part of
the central government’s market
competition mechanism.
At Present
• As per Reuters 2015 report China has
produced a little over 5.6 trillion kWh
of electricity in 2015, down 0.2%
from the previous year.
• Power consumption in 2015 stood at
5.55 trillion kWh, an increase of only
0.5% year-on-year.
• There are no such reports of power
shortages in China at present as it
had been able to meet its power
demands in the previous year.
26
SWOT Analysis
27
SWOT : China
1. Developed Infrastructure
2. Skilled Workers
3. High saving rate: Fuelling
Infrastructure growth
4. Quality Education
5. Manufacturing Hub
6. Quick decision making
7. Superior technology
1. Demographic burden
2. Rising labor cost
3. One child policy (loss of human resource)
1. Market saturation
2. Ongoing regional disputes
3. Oppressive political scenario
4. Environmental Concerns-Rising
global pressure
Strength Weakness
Opportunities Threats
1. Service Sector
28
SWOT : India
1. Demographic dividend
2. Low labor costs
3. Rising middle class
4. Recent reforms
5. Optimistic political equation
(will boost growth)
6. Service orientation
1. Low saving rate
2. Lack of quality education
3. Poor infrastructure
4. Bureaucracy
1. Large and growing workforce
2. Infrastructural inadequacy
3. Untapped in-house demand –
can boost manufacturing
1. Volatile social structure
2. Environmental Concerns-Rising
global pressure
Strength Weakness
Opportunities Threats
29
Lessons for India….
India’s low HDI rankings indicates its low labor pool.
• Focusing on HDI parameters like education, health
etc.
• Infrastructure notoriously lags behind, and that is
another key component in basic economic
development.
• Tackling rampant bureaucracy’s slow decision
making - Current political scenario seems
optimistic.
• Job creation- Programs like “Make in India” can
help.
• Democracy fostered innovation but marred quick
decision making.
• Development of Road and Railway network-
Allowing FDI for faster execution.
30
THANK YOU!

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India Vs China

  • 1. China Vs India 2nd June, 2016
  • 3. 3 Major Cement Producers of the World Source: www.statista.com Rank Country 2010 2011 2012 2013 2014 2015 CAGR 1 China 1880 2110 2210 2420 2480 2350 4.6% 2 India 210 240 270 280 260 270 5.2% 3 USA 67 69 75 77 83 84 4.6% 4 Turkey 63 64 64 71 75 77 4.1% 5 Brazil 59 64 69 70 72 72 4.1% 6 Russia 50 56 62 66 68 69 6.7% 7 Iran 50 61 70 72 65 65 5.4% 8 Indonesia 22 30 32 56 65 65 24.2% 9 Vietnam 50 59 60 58 61 61 4.1% 10 Japan 52 51 51 57 54 55 1.1% Total 2503 2804 2963 3227 3283 3168
  • 4. 4 World Cement Facts World cement production is said to be at 4100 MnT for 2015. China is the cement leader of the world with 3500 MnT per annum capacity. India is second in the race with 441 MnT capacity. USA the third. Leading world capacities China used more cement in three years than the U.S used in the entire 20th century U.S. • Consumed 4.5 Gigatons in last 100 years China • Consumed 6.6 Gigatons in the last 3 years The global market is sized at 237 billion US dollars Rank Company Country Capacity (Mt/yr) 1 CNBM (Sinoma) China 400 2 LafargeHolcim Switzerland 387 3 Anhui Conch China 285 4 Jidong Development China 130 5 Heidelberg Cement Germany 129 6 Shanshui (Sunnsy) China 100 7 Cemex Mexico 94 8 Aditya Birla Group India 91 9 China Resources China 78 10 Taiwan Cement Taiwan 69 Source: Company websites and ARs Leader companies' Capacities
  • 5. 5 Per Capita Cement Consumption World Cement Consumption Kg/person 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 China 462 486 560 663 751 810 913 999 1033 1199 1380 1522 1595 1627 India 90 86 105 109 113 122 135 145 150 164 186 196 198 188 USA 397 401 377 388 402 421 400 360 302 221 226 228 253 262 Russia 209 229 248 267 289 322 367 430 428 309 346 403 444 467 Indonesia 109 123 128 128 138 142 143 150 165 164 172 199 225 248 462 486 560 663 751 810 913 999 1033 1199 1380 1522 1595 1627 0 200 400 600 800 1000 1200 1400 1600 1800 1 2 3 4 5 6 7 8 9 10 11 12 13 14 China India USA Russia Indonesia
  • 6. 6 Cement Comparison between India & China India 441 270 317 Rs/Ton 171 26 2,341,000 33.3% 44.3% China 4100 2350 302 RMB/Ton 1808 739 10,540,000 19.9% 24.2% Capacity (MnT) Production (MnT) Cement Prices (as on Sept, 2015) CO2 Emissions (including fossil fuels) WHRS Capacity Consumption per capita(Kg/person) Top 3 Companies’ Contribution in the Capacity of their Country Top 5 Companies’ Contribution in the Capacity of their Country
  • 9. 9 Population Pyramid: Similar Phase Source: http://populationpyramid.net
  • 10. 10 Population Pyramid: China Deteriorating Source: http://populationpyramid.net
  • 11. 11 Population Pyramid: Continued Deterioration Source: http://populationpyramid.net
  • 13. 13 Cement Consumption 58 90 209 1990 2000 2014 India 178 462 1803 1990 2000 2014 China (Figures in Kilogram/person)
  • 14. 14 Power Production 293 570 1296 1990 2000 2014 India 621 1356 5583 1990 2000 2014 China (Figures in TWh)
  • 15. 2000 2014 India 2000 2014 China 15 FDI (In US dollars) 3.5 Billion 33.9 Billion 38.4 Billion 289 Billion
  • 16. 16 Urbanization Rate 25.60% 27.70% 32.40% 1990 2000 2014 India 26.40% 35.90% 54.40% 1990 2000 2014 China Rapid Urbanization rate for China
  • 17. 57,800 68,700 112,000 1990 2000 2014 China 17 Railways 78,607 81,865 89,919 1990 2000 2014 India (Figures in running track kms)
  • 18. 18 How much has been invested in China? (In 100 million RMB at 2011 values) ($10,703) ($341)
  • 19. 19 On what has that investment been made? Power Roads Dams Services Manufacturing was preferred over Services
  • 20. 20 Where has the money come from? Starting with 2003, Self-raised funds has continuously comprised more than half of all investment sources.
  • 22. 22 Why China Grew at a Rapid Pace? Factors China India Liberalization 1978 1991 Demographics One Child Policy No such policies HDI(2015) 0.727 0.609 Political Party 1(Communist Party) Many(Capitalist Economy) Sector focused Manufacturing Sector Service Sector Increasing Urbanization Tackled using strict land acquisition reforms and LGFVs No such reforms in India Unique parameters attributing to growth Cheap and Skilled Labor, Rural Entrepreneurship, Creative Entrepreneurship, Centralization, Exploitation of Economies of Scale. Cheap but mostly unskilled Labor, Reliability on Agriculture and Service Sector. Power Shortage Tackled it effectively in different phases removing its power shortage problems. Has been facing power shortages since a long time due to low power generation and the Discoms’ inability to pay its debts Technique used to improve Railway Sector 4 phase approach No such approach used
  • 23. 23 China’s 4 phase technique to Railways In order to develop Railways, China used the 4 phase technique where they initially focused on the Ordinary speed trains and then gradually moved their way up to High-speed trains.
  • 24. 24 Local Government Financing Vehicles LGFV is a company created by the local government, which is in charge of collecting local farmland, moving the farmers off the land, then rezoning it for urban use. This land is bundled up into a bond, which is sold to China's most powerful bank, China Development Bank (CDB). CDB is wholly state-owned by the Chinese Communist Party. After buying the bond, it provides financing money to the LGFV. Then, the LGFV invites developers to submit development plans, and develop the land. • China has more than 10K LGFVs at present. • Largely helped tackle the rising Urbanization situation of China. • Drawback – Creation of Ghosts’ town. These are the towns that got created due to excess investments on housing that were not taken up by the local residents to dwell.
  • 25. 25 China’s approach to power shortages 1978-1996 • This was the period of huge power shortages. • The Chinese government responded to the crisis by allowing local investors to invest in generating capacity. • The government imposed a tariff of 0.02 Yuan (0.32¢)/kWh on industrial end users to compensate investors. This solved the power shortage problem of that phase. 2003-2006 • Demand by high-energy-consuming industries led to another phase of power shortage. • The Chinese government responded by allowing local governments to make power generation investment decisions without central government approval. • Simultaneously, the central government began a market- oriented restructuring of state- owned power generation assets during which “unbundling” of generation assets took place. • State Power Corp. was separated into five separate major power generation corporations and two power grid corporations as part of the central government’s market competition mechanism. At Present • As per Reuters 2015 report China has produced a little over 5.6 trillion kWh of electricity in 2015, down 0.2% from the previous year. • Power consumption in 2015 stood at 5.55 trillion kWh, an increase of only 0.5% year-on-year. • There are no such reports of power shortages in China at present as it had been able to meet its power demands in the previous year.
  • 27. 27 SWOT : China 1. Developed Infrastructure 2. Skilled Workers 3. High saving rate: Fuelling Infrastructure growth 4. Quality Education 5. Manufacturing Hub 6. Quick decision making 7. Superior technology 1. Demographic burden 2. Rising labor cost 3. One child policy (loss of human resource) 1. Market saturation 2. Ongoing regional disputes 3. Oppressive political scenario 4. Environmental Concerns-Rising global pressure Strength Weakness Opportunities Threats 1. Service Sector
  • 28. 28 SWOT : India 1. Demographic dividend 2. Low labor costs 3. Rising middle class 4. Recent reforms 5. Optimistic political equation (will boost growth) 6. Service orientation 1. Low saving rate 2. Lack of quality education 3. Poor infrastructure 4. Bureaucracy 1. Large and growing workforce 2. Infrastructural inadequacy 3. Untapped in-house demand – can boost manufacturing 1. Volatile social structure 2. Environmental Concerns-Rising global pressure Strength Weakness Opportunities Threats
  • 29. 29 Lessons for India…. India’s low HDI rankings indicates its low labor pool. • Focusing on HDI parameters like education, health etc. • Infrastructure notoriously lags behind, and that is another key component in basic economic development. • Tackling rampant bureaucracy’s slow decision making - Current political scenario seems optimistic. • Job creation- Programs like “Make in India” can help. • Democracy fostered innovation but marred quick decision making. • Development of Road and Railway network- Allowing FDI for faster execution.