Economic Comparison of India and ChinaFrom April to June 2005, India's GDP grew by 8.1 percent, up from 7 .6 percent during the same period the previous year. Even more impressive, India achieves this with only half China's level of domestic investment in new factories and equipment, and only 10 percent of China's foreign direct investment……in 2003 and 2004 , [China] invested almost 50 percent. of its GDP in domestic facilities and equipment, roughly equivalent to India's total GDP. That's more than any other country... China's growth comes from massive accumulation of resources, while India's growth comes from increasing efficiency... While the Indian stock market has soared arrow in recent years, the opposite has happened in China. In 2001, the Shanghai stock index reached 2,200 points; by 2005, half the wealth was gone. In April 2005, the Shanghai index stood at 1,135 points… [Link]Huang opposes the use of foreign direct investment as a key measure of economic growth: With a few exceptions, class-leading manufacturing facilities that China is famous for are FDI products, not indigenous Chinese companies. His analysis is that India has a more laissez-faire attitude in politics and entrepreneurship: Infosys was founded by seven entrepreneurs with few political connections who nevertheless managed, without having significant physical assets, to obtain capital from Indian banks and the stock market in the early 1990s. It is unimaginable that a Chinese bank would lend to a Chinese equivalent of Infosys. China was light years behind India in economic liberalization in the 1980s. Today, it lags behind on critical aspects, such as reform that would allow more foreign investment and make. ..... middle of paper ...... k rate and repo rate of RBI is 6 percent. The reserve ratio prescribed by the central bank for banks is 13 percent in China (October 2007), while the RBI prescribes a reserve ratio of 32 percent (statutory liquidity ratio of 25 percent and reserve ratio cash flow of 7 percent). percent to world trade, while India's contribution to world trade is less than one percent (0.8 percent). China is in surplus in both fiscal and trade terms, while India had a trade deficit of $21.6 billion between April and June 2007, or 7 percent of India's GDP.• OTHER DATA Exchange rates for one US dollar = 7.48 yuan, while one US dollar = 39.33 Indian rupees. The average increase in worker wages in 2007 was 8 percent in China, while it was 14 percent in India..