GSCR Report China Korea

2012
Country Study: China

C K Shah Vijapurwala Institute of Management
VADODARA - GUJARAT - INDIA
17th November, 2011
GLOBAL / COUNTRY STUDY AND REPORT

107050592001-107050592060
Compiled by:
Dr. Kerav Pandya and Dr. Rajesh Khajuria
A
ON
"India and China Education Sector:

Need for reforms through a
Comparative study"
Submitted to
C.K.Shah Vijapurwala Institute of Management
IN PARTIAL FULFILLMENT OF
THE REQUIREMENT OF THE AWARD FOR
THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION
In
Gujarat Technological University
UNDER THE GUIDANCE OF
Dr. Rajesh Khajuria
Director
Submitted by
Dhara Shah 107050592001
Brijesh Shah 107050592002
Ashish Sharma 107050592003
Pooja Kapoor 107050592004
Drashti Kavalanekar 107050592005
Saurin Parikh 107050592006
[Batch: 2010-12]
MBA SEMESTER IV
C.K.Shah Vijapurwala Institute of Management

MBA PROGRAMME
Affiliated to Gujarat Technological University
Ahmedabad
OVERVIEW OF THE CHINESE ECONOMY

The growth of the China economy in the last few decades since economic reform
has emerge in 1979 has been one of the major wonders of modern economic
development.
The Educational policies in China in the past five decades have been
characterized by bold moves, & major shifts and reversals. Educational change is
linked to changes in the larger society. Some observers might have pointed out
the substantial gain in literacy of the great masses of population of china, the
large expansion of the education system, and the nurturing of some world-class
scientists and engineers. Others may have instead lament the education loss
resulting from the major disruption in educating a generation of China during the
period of the Great Proletariat Cultural Revolution. The Chinese government
thinks that the splendid achievement has been achieved in education under the
three successive generations of CCP leadership of Mao Zedong, Deng Xiaoping,
and Jiang Zemini. The China's educational development compares favorably with
countries with similar level of economic development.
The Chinese government faces numerous economic challenges,

includs:
which
(a) Reducing its high domestic saving rate and ultimately low domestic
Demand
(b) Sustaining enough job growth for millions of migrants and new
Entrants to the work force in china
(c) Reducing corruption and other economic crime and
(d)Containing
environmental
damage
and
social
strife
related
to
the
Economy's huge transformation. Economic development has progressed

Further in coastal provinces than in the interior, and approximately 200 Million
rural laborers and their other dependents have relocated to urban areas for
finding out
work. One result of the "one child" policy is that china is now one of
the most rapidly aging countries in the world. Deterioration in the environment specificaly air pollution, soil erosion, and the steady fall of the water table,
especially in the north there is another long-term problem. China continues to
lose arable land because of erosion and economic development. The Chinese
government is seeking to add up energy production capacity from various
sources other than coal and oil, mainly focusing on nuclear and alternative
energy development.
OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL

Period
Two-way trade
Exports
Imports
1981-85
+12.8%
+8.6%
+16.11%
1986-90
+10.6%
+17.8%
+4.82%
1991-95
+19.5%
+19.1%
+19.91%
1996-2000
+11.0%
+10.9%
+11.30%
2000-05
+24.6%
+25.0%
+24.0%
2006
+27.2%
+19.9%
+23.81%
2007
+25.6%
20.80%
23.45%
PRESENT TRADE RELATIONS AND BUSINESS VOLUMES BETWEEN INDIA

& CHINA:
India and China joined trade officially in 1978. In 1984, the two sides signed the
Most Favored Nation Agreement.
( I ) Bilateral Institutional Mechanisms

( ii ) Bilateral Trade
India export to china

Year
Figures (billion)
Growth
in
percentage
2008
20.34$
38.75
2009
13.70$
32.62
2010
20.85$
52.20
China export to India
Year
Figures (billion)
Growth
in
percentage
2008
31.51$
31.11
2009
29.56$
6.16
2010
40.87$
38.25
Total India china trade
Year
Figures (billion)
Growth
percentage
2008
51.86$
34.01
2009
43.28$
16.54
2010
61.74$
42.66
India china total trade crossed the target of US $ 60 billion
in
CHINA PEST ANALYSIS

Opportunities
Political
Threats
China
Ban on console games
accepts
Ban on certain online games
foreign
Censorship
business
Social
and
cultural
Many
Difference
in
culture
between
people are
video gamers and online gamers
gamers in
China
Huge
amt
of
population
Economic
3rd largest
Japan Earthquake
economy
Limited trade between China and
in
Japan
the
world
Growing
economy
Technological
Growing
Not
all
technology
(consoles)
technology is
allowed
Not all areas in China have the

latest technology since they are
underdeveloped
INTRODUCTION OF EDUCATION SECTOR IN CHINA

China's education system is composed of 4 components,
1. Basic education,
2. Occupational/polytechnic education,
3. Common higher education and
4. Adult education.
The Chinese education system

The education of all the children is being seen by the Ministry of Education, who,
in the municipalities of Shanghai, Beijing, Chongqing and Tianjin, are generally
reported to directly by the Municipal Education Commissions, they also oversee
the District Education Bureaus. In addition to this, the Municipal Education
Commissions report to the Education Departments.
The ROLE of Higher Education on China

T her e ar e
numerous students have been convinced of just that as higher
education in China continues to develop rapidly and has taken on a prosperous

process. In only past few years, Chinese higher education has transformed from
education for the elite to one for the public. It is a process that has been a
marvelous development for China & India and a process that has commonly
taken so many decades to complete for many other countries.
Statistics from the Ministry of Education show that from 1999, China has
expanded enrolment in higher educational institutions. Right now, the no. of
students studying in China's universities has reached 26 million, which is an
astonishing five-fold increase in only 9 years, reported bt the Chinese Education
Minister. In just this year alone, about 5.45 million new students admited in
universities and colleges. Higher education institutions and research institutions
have experienced a huge increase in the enrolment of postgraduates by 22.64%
compared with last year 2010, which is evidence that postgraduate education in
China has developed very quickly.
Since the implementation of reform and development of higher education, both

have made significant achievements. Higher education in China has played an
important role in the economic construction, scientific progress and social
development of China by developing a large scale of advanced talents and
experts for the construction of socialist modernization & a new era.
Role of education in China's Unemployment

1. Help in unemployment
2. It is a vital source of productivity advancement is research and
Development
3. Centralized Education System in China
4. Education Mandatory through Junior High
COMPARISION BETWEEN INDIA AND CHINA

Education
Chinese
Education
Indian Education
st at s
Average
years
of
schooling of adults
6.4
st at s
5.1
Ranked 45th. 25% more Ranked 65th.

than India
Duration of compulsory
education
9 years
8 years

than India
Duration of education
Primary level
Duration of education
> Secondary level
Ranked 59th.
Ranked 96th.
Ranked 93rd. 20% more Ranked 164th.

than India
Education
enrolment
by level > Tertiary level
15,186,217
11,295,041
Ranked 2nd in 2002. 34% Ranked 3rd in 2002.

more than India
Education,
primary
completion rate
103
68
Ranked 6th in 1991. 51% Ranked 49th in 1991.

more than India
Female
enrolment
share>Secondary level
45.31%
39.64%
Ranked 130th. 14% more Ranked 152nd.

than India
Geographical aptitude
results
70.305
77.883
Ranked 92nd.
Ranked
17th.
11%
more than China

Hours of instruction for
pupils aged 13
1,020 hours
1,176 hours
Ranked 14th.
Ranked
7th.
more than China

Hours of instruction for
pupils aged 9
771 hours
1,051 hours
15%
Ranked 23rd.
Ranked
5th.
36%
more than China

Illiteracy rates by sex,
aged 1 5+
13.00%
40.50%
Ranked 71st in 2003.
Ranked 26th in 2003.

2 times more than
China
Primary
school
girls
out of school
5.00%
39%
Ranked 79th.
Ranked 31st. 7 times

more than China
Public
spending
on
education, total > % of

12.97 %
government
12.72 %
expenditure
more than India
Public
spending
per
student > Primary level
6.1
7.2
Ranked 110th.
Ranked 107th. 18%

more than China
Pupil-teacher
primary
ratio,
21.05
40.2
Ranked 81st in 2004.
Ranked 27th in 2004.

91% more than China
Tertiary enrollment
7.5%
10.5%
Ranked 103rd.
Ranked
94th.
more than China
40%
Universities > Top 100

than India
Universities > Top 500 8

than India
Universities > Top 200

than India
Women to men parity
index,
as
ratio
of
literacy rates, aged 15-
0.93
0.67
24
more than India
Present position and trend of education sector during

last 5 years
The Education industry is one of the fastest & largest growing sector in the
worldwide, which generates large scale revenues and employment in the
country. Globally, enrolment & admission in upper secondary education
represents 56% of the relevant school-age population. E-education market is a
segment with high growth potential in the industry. In 2007-08, US constituted
60% of the global market and U.S. accounted market for 15% market
India Education Industry: Demand and Opportunities

It has analyzed that the unique features of different regions which have
contributed vitally to the "Global Education Sector" with a special focus on the
possible opportunities for the private players in the country. The markets which
contribute to the global education sector include Ireland, Switzerland, EU and
Asia-Pacific and also countries coved under these regions. The report also
highlights the emerging market which has a huge potential to develop the
education industry. It has also discussed the contribution of technology, trends
and active players in the market. The report has also covered future forecast of
education industry in different parts of the world.
Policies and norms of china for education sector for import export
To promote Chineseness in education, efforts were shown in the colonial

education policies. The emphasis on Chineseness was manifested in
(1) The employment of Hanlin teachers

(2) The emphasis on Classical Chinese learning and teaching, and
(3) The use of Cantonese as a medium of instruction
To ensure the educational quality of international graduate students and to

improve the effect of the Chinese Government Scholarship Programme, which is
based on previous pilot projects, and in according with the Regulations over
Admission of International Students into Higher Education Institutions, the
Ministry of Education of China has decided to launch the Foundation Programme
Since 1st September 2009 for new international undergraduate students ar e
awarded with Chinese Government Scholarships before they begin their
disciplinary courses.
1. Enrolment and Administrative Duties

2. Target Students
3. Overall Objectives
4. Duration of Study
5. Curriculum Design and Teaching Mode
6. Student Administration
7. Assessment
8. Selection of Undergraduate Programmes and HEIs
Policies and norms of India for education sector for import

export
1. National Policy on Education (NPE)
2. Free and Compulsory Education
3. Education of Teachers
4. Language Development
5. Education Opportunity for all
6. Uniform Education Structure
7. To review the progress
BUSINESS OPPORTUNITIES IN FUTURE

The latest news is that India's education sector is forecasted to increase its IT
spending from an estimated $357 million in 2008 to $704 million by 2012, which
reflecting in a Compounded Annual Growth Rate of 19% during 2007-2012, in
accordance with the research study by Springboard Research, an IT Market
Research industry (Source - Silicon India)
CONCLUSIONS :
China's achievements in improving basic educational attainment have been
spectacular. India started late, but has made great effort in basic education
during the last few years. Secondary enrollments are far from 100% in both
countries, especially in India. A significant reversal has been in tertiary
enrollment, with China which is exceeding India's enrollment ratios by the early
2000s. However, both countries will have to pay serious attention to the problem
of educating their adult populations as well as making their colleges and
universities comparable in quality with those in the developed & industrialized
countries.
Important Opportunities
China
With splendid & unique achievements in primary education, China has the
Opportunity to take education to the next level and to join the ranks of
economies such as South Korea's by increasing secondary and tertiary
education.
Increases in tertiary education and English education would allow China to

compete with India as a outsourcing destination in the knowledge sectors
by increasing the relevant labor base.
As its universities expand, China could not only retain its own students
who go to the U.S and Europe for university education but also attract
foreign students.
India
Given its reputation in higher education, India can increase its export earnings by
positioning itself as a destination for foreign students who desire & wish quality
university education at a more affordable cost.
India's information technology expertise and improved communication

infrastructure can be used to increase access to the education in both
remote and rural areas.
Private education, which is widely prevailing in India, can be expanded to

provide quality education response to market demands.
Future Directions :
Throughout the analysis in Part Three, we refer to issues that deserve further
attention. These are summarized below:
Given their technological aspirations, a natural question that emerges is

whether China and India should target higher education toward specific
areas. In reality, there is an evidence that both countries are focusing
their energies on graduating more students in information technology.
What are the costs and benefits of such a strategy. What is the role of
private institutions in responding to the demands of the labor markets of
the two countries.
India has NGOs in education and other sectors. How best can
partnerships among the government, the private sector, and NGOs are
structured to improve educational access to an ever-widening group
China, in spite of a lack of private schools, has promoted a spirit of

competition among schools by allowing freedom of choice among public
schools. India has of private schools, to which parents seeking quality.
Can education schemes , which subsidizes forgone earnings by children

in addition to their direct tuition, it would be adapted to the Indian situation
to improve among poor children
Distance education might provide an opportunity to increase access to

education in the remote rural areas of China and India.
In addition to providing educational access to their own citizens, would it

be profitable for China and India to become effective exporters of the
world.
BIBLIOGRAPHY :
http://www.nationmaster.com/compare/China/India
http://en.cnta.gov.cn/about/Forms/link/friendlink.shtml#Ministries%20&%20
Commission.
http://www.moe.edu.cn/publicfiles/business/htmlfiles/moe/moe_2804/index
.html
http://www.asiaecon.org/exclusives/ex_read/19
http://prayatna.typepad.com/education/policies_regulations/
http://www.unescap.org/ttdw/Publications/TFS_pubs/pub_1836/pub_1836
_ch6.pdf
http://www.edu.cn/introduction1_1403/20060323/t20060323_110718.shtm
l
https://www4.nau.edu/cee/jep/journals.aspx?id=361
http://www.future-agricultures.org/farmerfirst/files/T3c_Li_etal.pdf
http://www.com.cuhk.edu.hk/cuccr/b5/results_3.htm
http://www.jstor.org/discover/10.2307/2753752?uid=3738256&uid=2&uid=
4&sid=5607501573
http://www.chinaeducenter.com/en/chistory.php
http://exim.indiamart.com/foreign-trade-policy/
http://www.eximguru.com/exim/dgft/exim-policy/2008/default.aspx
http://ias.cass.cn/en/show_project_ls.asp?id=642
http://in.china-embassy.org/eng/xwfw/xxfb/t885201.htm
http://www.wto.org/english/tratop_e/tpr_e/tp330_e.htm
http://isid.org.in/book'0804.html
A
ON
"EXPORT - IMPORT POLICIES, PROCEDURE AND DOCUMENTATION FOR
AGRO INDUSTRY (ORGANIC FOOD) EXPORT TO CHINA"
Submitted to
C.K.SHAH VIJAPURWALA INSTITUTE OF MANAGEMENT
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
In
Ms. Savitha K
Assistant Professor
CKSVIM
Submitted by
Name
Hiteshi Brahmbhatt
Ankita Shinde
Hardik Chokshi
Kunal Patel
Rakesh Nasit
Enrollment No
107050592007
107050592008
107050592009
107050592010
107050592012
M.B.A - SEMESTER III/IV
C.K. Shah Vijapurwala Institute of Management

M.B.A PROGRAMME
Ahmedabad
April 2012
EXECUTIVE SUMMARY
Introduction
One of the world's greatest challenges is to guarantee food security
for the world's growing population whilst also ensuring greater sustainability of
food production, trade, and consumption.
Agriculture has made many technological advances, increasing its level of

productivity and thus creating wealth in rural areas and lowering the price of food.
However, the successful growth of the sector has been accompanied by
widespread concern over food safety scares, damage to workers' health and the
loss of biodiversity from intensified agriculture. The successful transformation of
organic agriculture from a series of scientific experiments in the 1950s to a US$
55 billion industry today can be partially attributed to these concerns: consumers
are willing pay more for a way of farming that promotes healthy agro ecosystems
and avoids the use of agrochemicals.
Organic agriculture also has a role in achieving development objectives with

developing countries exporting premium price tropical and counter seasonal
crops to developed countries. There is still considerable potential for organic
agriculture to grow but it requires a more favorable policy environment. For this to
happen, policy makers, civic society, and the private sector rely upon credible
information to support their decision-making.
Economic overview of china

Since the late 1970s China has moved from a closed, centrally planned
system to a more market-oriented one that plays a major global role - in 2010
China became the world's largest exporter.
Reforms began with the phasing out of collectivized agriculture, and expanded to
include the gradual liberalization of prices, fiscal decentralization, increased
autonomy for state enterprises, creation of a diversified banking system,
development of stock markets, rapid growth of the private sector, and opening to
foreign trade and investment.
(China's national logo for organic products)
Organic agriculture:
Due to the negative impact of the green revolution in the 1970s to 1980s,
Chinese Ecological Agriculture (CEA) was promoted by the Chinese government
not only as an evolution of traditional, biological, and organically based
agricultural production systems, but also a new alternative to decades of
traditional agricultural practices that provide a good basis for organic farming (Ye,
2002) .
The development of certified organic agriculture in China was based completely

on the concept, standards, organization, accreditation, monitoring, and trade
developed in the Western countries.
In 1990, for the first time, organic tea from Lin'an County of the Zhejiang
Province was exported with SKAL certification of the Netherlands, which marked
the launch of organic production in China (IFAD, 2005).
Since then, organic agriculture in China has been booming with international
production and trade in organic foods developing rapidly.
Market & trade

In China, Export products include beans, rice, tea, mushrooms, vegetables,
processed oil, and herbs among other products. Beans account for the largest
export, with around 42 percent of the total export value, followed by cereals, nuts,
vegetables, and tea. The products are exported to more than 20 countries
according to 2009 statistics.
According to the China Organic Food Certification Center (COFCC), the value of
exported organic products increased from 0.3 million USD in 1995 to 350 million
USD in 2004 accounting for 1.7 percent of the total value of Chinese agricultural
exports (Li, 2006).The Chinese domestic organic market was nearly non-existent
in 2000, but it has grown fast since.
Contribution of Agriculture to the National Economy
Agriculture is an important economic sector of China, employing
over 300 million farmers, which is almost 50 percent of the total work force that it
has got. It ranks first in worldwide farm output, primarily producing rice, wheat,
potatoes, sorghum, peanuts, tea, millet, barley, cotton, oilseed, pork and fish.
Although China's agricultural output is the largest in the world, only about 15% of
its total land area can be cultivated. China's arable land, which represents 10% of
the total arable land in the world, supports over 20% of the world's population
By using merely about 9% of the world's cultivated land, China has not only
managed to meet the demand of 1.328 billion people for grain and other agroproducts, but also been able to provide raw materials, labors and a huge
consumer market for industries, services and other sectors.
In 2011, agriculture (in terms of added value) took up a share of 10.1% of the
GDP. It plays increasingly important roles in produce supply, food safety, and
environment protection, as its multi-functionality fosters.
Policies and Norms of china for agriculture industry for import /

export
Agricultural policy of china:

China's Policy Framework
The Government of China's Eleventh Five-Year Plan, covering the period 200610, identified.
China's primary domestic agricultural policy objectives as

Developing modern agriculture
Increasing farmers' incomes
Improving rural conditions
The secondary objectives include

Energy independence
Ensuring a safe food supply for consumers
Conserving natural resources
Chinese Agricultural Policy Objectives:
China's support for the farm sector has grown substantially since 2004
when, in an important shift in economic policy, the government began
supporting agriculture instead of taxing it.
China's central, provincial, and local governments formulate agricultural

policies in response to a policy environment shaped by historical events
and current social factors.
Steps in achieving objectives of policy
As China has a long history of famine and political revolutions, and in light of a
rising number of "public order disturbances" by farmers and consumer groups in
the mid- to late 2000s, China's central government in Beijing began fueling
additional resources to the farm sector and rural economy to meet its policy
objectives.
Raising incomes for farmers is important to the government because many of

China's poor live in rural areas, and farming small plots is the primary livelihood
for the majority of rural inhabitants.
Boosting rural development by raising government funding for agricultural

infrastructure and other spending is designed to promote social harmony
and shrink the income gap between urban and rural workers.
Self-sufficiency in grains, at least up to 95 percent of domestic demand, is

considered by Chinese policymakers to be a key component of China's food
security strategy.
China's policy toward agriculture focuses not only on food security through selfsufficiency and raising farmers' incomes, but also to a lesser extent on energy
independence, ensuring a safe food supply for consumers, and conserving
natural resources.
Food and Agricultural Import Regulations and Standards:
Section I. Food Laws:

Section II. Labeling Requirements:
Section III. Packaging and Container Regulations:
Section V. Pesticides and Other Contaminants
Agricultural Infrastructure
Investment in agricultural infrastructure is a major budget expenditure item for
China's central government to achieve development targets in the rural sector.
Under the Chinese budgetary accounting system, government expenditures for
agriculture consist of four major items:
Direct expenditures on agricultural production
Rural relief funds
Rural capital construction
Agricultural science and technology promotion
Current Status of Agriculture in China
In 2011, the Ministry of Agriculture (MOA) seriously fulfilled the arrangements
made by the CPC Central Committee and the State Council, actively responded
to grave challenges posed by unusual natural disasters and highly volatile market
conditions,
followed
the
approach
of
promoting
overall
development,
emphasizing implementation results, striving for good harvest despite severe

disasters, setting priorities and intensifying the foundation, preventing risks, and
deepening the reform and establishing mechanisms. Due to these efforts, the
tasks for the last year were accomplished and the overall growth momentum of
agriculture and rural economy maintained.
Agriculture in India
Agriculture is a way of life, a tradition, which, for centuries, has shaped the
thought, the outlook, the culture and the economic life of the people of India.
Agriculture, therefore, is and will continue to be central to all strategies for
planned socio-economic development of the country.
Indian agriculture has, since Independence, made rapid strides. In taking the
annual food grains production from 51 million tones in early fifties to 206 million
tones at the turn of the century, it has contributed significantly in achieving selfsufficiency in food and in avoiding food shortages.
Incentives for Agriculture

In order to protect the interest of farmers in context of removal of Quantitative
Restrictions, continuous monitoring of international prices will be undertaken and
appropriate tariffs protection will be provided. Import duties on manufactured
commodities used in agriculture will be rationalized.
The domestic agricultural market will be liberalized and all controls and
regulations hindering increase in farmers' income will be reviewed and abolished to
ensure that agriculturists receive prices commensurate with their efforts,
investment.
Restrictions on the movement of agricultural commodities throughout the country
will be progressively dismantled. The structure of taxes on food grains and other
commercial crops will be reviewed and rationalized.
Similarly, the excise duty on materials such as farm machinery and implements,
fertilizers, etc., used as inputs in agricultural production, post harvest storage and
processing will be reviewed.
Appropriate measures will be adopted to ensure that agriculturists by and large
remain outside the regulatory and tax collection systems. Farmers will be
exempted from payment of capital gains tax on compulsory acquisition of
agricultural land.
Policies and Norms

In 2000, the government announced the first-ever National agricultural policy.
The main aims of this policy are to:Actualize the vast untapped growth potential of Indian agriculture
Strengthen rural infrastructure to support faster agricultural development
Promote value addition, accelerate the growth of agro business
Create employment in rural areas
Secure a fair standard of living for all agriculturalists
Discourage migration to urban areas and face the challenges arising out
of economic liberalization and globalization.
Implications on Agricultural Sector

Agriculture being the backbone of Indian economy, the EXIM policy has initiated
a series of measures for its growth and development, especially for promotion of
exports from agricultural sector.
Removal 'of quantitative and packaging restrictions on certain agricultural
products and on export of all cultivated varieties of seed would give a
major boost to the export of these items.
Identification of 20 "Agricultural Export Zones would help in development
of specific geographical areas for export of specific products.
COMPARATIVE POSITION OF AGRICULTURE INDUSTRY OF CHINA

WITH INDIA
Variables
China's Stats
India's Stats
Arable & Permanent

Cropland
Arable Land in hectares
135,557 thousand
hectares
103,397,000
hectares
Land area under rice in

hectare
26,510,000
Ranked : 2nd
Rice Production
118,000 thousand
metric tons
87,000 thousand
metric tons
169,700 thousand
hectares
159,430,000
hectares
42,400,000 (60%
more than China)
Ranked : 1st
89,000 thousand
metric tons
67,000 thousand
metric tons
66%
59.2%
Wheat Production
Agricultural Labor Force
Procedure and documentation
Documentation
A written report by the business enterprise in support of its application and a
completed Processing Trade Application Form bearing its stamp.
Photocopies of the Registration Form of the business enterprise bearing
the seal of and issued by the Ministry of Commerce (or FIE approval
certificate) and its business license.
Original copy of the document issued by the commerce authorities at or
above county level at the place of registration of the processing enterprise
certifying its production capacity, and photocopy of its business license.
Original copy of the import-export contract signed by the business
enterprise with foreign parties.
Original copy of the processing trade agreement (contract) signed
between the business enterprise and the processing enterprise.
Other documents and materials deemed necessary by the approval
organs.
If the business enterprise or processing enterprise is an FIE, it is also
necessary to submit relevant contracts and articles of association
approved by the commerce authorities stipulating the business scope and
production scale of the enterprise, as well as documents proving that the
production facilities have been completed and put into operation, that
investment is already in place and that the enterprise has passed the
necessary annual inspections.
For processing trade using imported scrap metals or other wastes as
materials, an import approval document issued by the State
Environmental Protection Administration in accordance with the relevant
regulations is required. In the case of processing trade where the import of
materials or export of finished products involves chemicals which may be
used for the production of dangerous drugs or chemicals for both civilian
and military use, an approval document issued by the departments
concerned is required.
Barriers and Constraints between India and China

To realize the full potential of India-China trade, remaining barriers and
constraints have to be relaxed. These include customs rules and procedures,
standards, certification and regulatory practices, nontariff barriers, and rules of
origin.
Some of the problems that have arisen with respect to customs valuation are
1. The use of a minimum reference price instead of the World Trade
Organization-sanctioned transaction cost method;
2. A variation of customs valuation across ports, resulting in additional costs
to exporters; and
3. A lack of clarity in guidelines and procedures relating to imports for
exporters.
4. There are certain problems related to standards, certification, regulatory
practices, rules, and regulations in terms of national treatment and
accessibility.
5. The Chinese language poses a problem for Indian traders, because most
Indian trade is in English.
6. It is difficult for them to keep up with the Chinese regulations.
7. The certification process, including with respect to sanitary and
phytosanitary standards (SPS), also involves delays and high costs.
8. Certain nontariff barriers (NTBs) are also hindering the growth of trade
between the two countries. There are problems related to tariff quotas, pre
shipment inspection, and definitions of rules of origin.
Potential for import/export in Gujarat market

Like most other states in India, Gujarat has also prepared several reports
and policy papers assessing the potential for agro-processing, identifying
constraints in the development and exports of Agri-products, suggesting or
announcing several important policy measures for removing physical and

financial infrastructural bottlenecks, and promoting R&D activities in the sector.
However, these exercises lack realistic assessment of the potential, important
features of Agri-exports from the state, and Gujarat's comparative advantage
over the rest of the country in specific product categories.
A recent survey of exports originating from Gujarat conducted by the
Gujarat Industrial Technical Consultancy Organization (GITCO) estimated that,
during the year2000-01, Gujarat contributed Rs 495 billion (or 20.8%) out of the
total national exports of Rs 2,385 billion. Compared to this overall proportion,
Gujarat's share in national exports in commodities like groundnut, oil meals,
castor oil, poultry, dairy products, spices, sesame and niger seeds, and
processed food, fruits, and vegetables is much higher indicating Gujarat's
revealed comparative advantage in these product categories.
Some important features of the exports activity in Gujarat are:

Only 20 per cent are pure traders in the export business.
Only a quarter of the units have 'export house' or upward status for
special benefits.
More than 40 per cent of the exporting units have come up after 1991-92.
Two-thirds of the exporters belong to small and medium enterprises.
Export intensity of Gujarat's agricultural sector is about 12 per cent.
Agri-exports represent excess supply and hence highly volatile and
fluctuating activity over time.
Agri-exports are price elastic.
Agri-exports would be highly responsive to exchange rate depreciation.
In recent years, Gujarat's agriculture shows considerable dynamic characteristics

in contrast to the gloomy official income estimates in the sector. Nineteen out of
30 crops show significant positive time trend in area while five crops show
significant negative trend. The cropping pattern in Gujarat has been shifting away
from the low value traditional crops to high value commercial crops with business
and export potential.
COMPARATIVE ADVANTAGE OF GUJARAT
At the outset, it is important to distinguish between 'exports from Gujarat'

and 'exports originating from Gujarat.' This is because Gujarat has the longest
coastline in the country with several seaports and even an airport having
international links.
Compared to other parameters like population, income, manufacturing,
new investments, etc., Gujarat's share in the national exports is remarkably high.
Thus, it is possible to establish from the survey results that Gujarat has a definite
comparative advantage in the export activity over other states in India.
The share of Gujarat in the total Agri-product exports in the country works
out to 12.8 per cent. However, there are other commodity groups like gems and
jewelry and petroleum products where Gujarat's share in the nation's exports is well
above 70 per cent. Gujarat has shown good export performance compared to the
other states in the country in the traditionally commercial crops and poultry
and dairy products.
The Indian farming sector has come a long way since independence. India
is the world's second largest producer of food next only to China.
Over the last few years, a shift has been observed in the Indian food
consumption pattern. This industry is one of the largest industries in India; as it
constitutes about 13 percent of manufacturing GDP and employs over 12 million
people.
Gujarat has witnessed an impressive agricultural growth in the last five

years and is the largest producer of castor and tobacco in India. Gujarat boasts of
being the leader in exports of processed food and vegetables in India with a
strong base of 3,700 small scale and 150 large & medium scale food processing
units. Companies such as ITC, Amul, Hindustan Lever, and McCain have explored the
potential of this sector in Gujarat.
Gujarat with a strong agricultural base, 3.6 million hectares of irrigated

land and well developed agro research capabilities is well positioned to drive the growth
of food processing industry. Gujarat offers a large number of incentives to set up food
processing units. Hassel free policies such as single window clearance, a strong
agricultural marketing network with over 200 Agricultural
Produce Marketing Committees (APMCs) and over 110 cold storages are some
of the enablers that have facilitated the rapid growth of this industry. The State also
provides financial incentives by offering interest subsidies to agro-industrial units and
air & sea freight subsidizes for agro exports.
However, there are concerns that need to be addressed to take food processing
industry to the next level. With a large number of intermediaries, the sector still remains
largely unorganized. A weak supply chain tends to be the cause of large
amount of wastage of perishable foods.
Imperatives (Conclusion)
To ensure rapid growth of this industry in Gujarat, the Government should ensure a
more efficient supply chain by increasing linkages between food
processing industries and farmers. Crop planning and farm advisory to farmers would
help produce better quality of processed food. Promoting agricultural export zones,
encouraging contract farming and developing an expansive cold
storage infrastructure would enable Gujarat to lead the way in tapping this
opportunity.
BIBLIOGRAPHY
Articles / Reports
(ITC), I. T. (2011). Organic Food Products in China: Market Overview. Geneva,Switzerland.
Blancher, T. R. (March 2009). China: International Trade and WTO. Beijing: International
Monetary Fund.
CENTRE, O. D. (January 2010). THE EMERGING MIDDLE CLASS. Paris: OECD.
Joshua E. Lagos, R. R. (Octorber 2010). Organic Food Sector - China. Shanghai:
Agriculture Trade Office (ATO).
Support, S. A. (2012). Oranic Market Report 2012. England (UK): Triodos Bank.
Yuhui Qiao, A. P. (2010). The World of Organic Agriculture - Statistics and Emerging
Trends 2011. Beijing: IFOAM.
Websites
China India Agriculture. (n.d.). Retrieved from Nationamaster:
http://www.nationmaster.com/compare/China/India/Agriculture
Council, H. K. (2012). Guide to doing business in china. Retrieved from HKTDC:
http://www.hktdc.com/info/mi/a/bgcn/en/1X002M06/1/Guide-to-Doing-Business-inChina/General-Trade.htm
Economics, T. (2012). China/Exports. Retrieved from tradingeconomics:
http://www.tradingeconomics.com/china/exports
Starmass. (n.d.). China_Review/Imports_Exports/Industry.jpg. Retrieved from Starmass:
http://www.starmass.com/china_review/imports_exports/industry1.jpg
A
ON
AUTOMOBILE SECTOR IN CHINA
Submitted to
C K SHAH VIJAPURWALA INSTITUTE OF MANAGEMNT
MASTER OF BUSINESS ASMINISTRATION
In

Dr. Kerav Pandya
Submitted by
Karishma Hotchandani
107050592013
Sudhir Vasoya
107050592014
Ritu Shah
107050592015
Vishal Kapasi
107050592016
Vipul Parmar
107050592017
Archala Durve
107050592018
Batch: 2010-12
MBA SEMESTER III/IV
C K SHAH VIJAPURWALA INSTITUTE OF MANAGEMENT

MBA PROGRAMME
Ahmedabad
June,2012
Introduction of Chinas demographic profile

China is the most populous country in the world, with over 1.3 billion citizens. Located
in East Asia, the country covers approximately 9.6 million square kilometers (3.7 million
square miles). It is the world's second-largest country by land area, and the third- or
fourth-largest in total area, depending on the definition of total area.
Economic Overview of China
China's economy since the 1970s has changed from a closed, centrally planned
system to a more market-oriented one that plays a major role in the global economy - in
2010 China became the world's largest exporter.
It began with the phasing out of collectivized agriculture, and expanded to include the
gradual liberalization of prices, fiscal decentralization, increased autonomy for state
enterprises, creation of a diversified banking system, development of stock markets,
rapid growth of the private sector, and opening to foreign trade and investment.
It ranks 2nd in nominal as well as PPP in world. Regarding GDP, it ranks 2nd with $ 5.93
trillion. The growth rate of GDP in in major economies like China is 10.40% and ranks
2nd in GDP growth and ranks 2nd in GDP growth.
There are some main industries in China:
mining and ore processing
iron
steel
aluminum and other metals
coal
machine building
armaments
textiles and apparel
petroleum
cement
chemicals
fertilizers
consumer products including (footwear, toys, and electronics)
food processing
transportation equipment
telecommunications equipment
commercial space launch vehicles
The export of China is $1.581 trillion in 2010 and exporting electrical and other
machinery, including data processing equipment, apparel, textiles, iron and steel,
optical and medical equipments.
The import of China is $1.327 trillion in 2010 and importing electrical and other
machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics,
organic chemicals.
Overview of different economic sector of China

Agriculture Sector
The contribution of China's agricultural sector to its GDP has kept decreasing, from
37.9 percent in 1965 to 28.4 percent in 1985 and then to 18.4 percent in 1998 a net
decrease of 19.5 percent in the 3-decade period.
Service Sector
The contribution of tertiary industry (service) to the GDP has increased from 27.0
percent in 1965 to 28.5 percent in 1985 and then to 32.9 per cent in 1998, a total
increase of only 5.9 percent in the same period.
Trade relations between China & India
India considers China its largest trading partner. The joint Indo China trade is approx
US$60. They import & export several items from each other given below.
Out of total imports by India from China, 47% are of electrical products, electronic
products and machineries.
Priority List of Imports by India from China
Electrical Machinery
Machinery
Plastic
Organic Chemicals and Inorganic Chemicals
Iron And Steel, Iron/Steel Products
Rare Earth Metals
Fertilizers
Impregnated Text Fabrics
Manmade Filament, Fabric
Silk; Silk Yarn, Fabric
Vehicles
Mineral Fuel, Oil Etc
Aluminum
Priority List of Imports by China from India

Machinery
Plastic
Ores, Slag, Ash
Iron And Steel
Metals
Organic Chemicals Salt; Sulphur; Earth, Stone
Inorganic Chemicals; Rare Earth Metals
Cotton and Yarn, Fabric
Copper and Articles Thereof
Electrical Machinery
Hides And Skins
Artificial Flowers, Feathers
Tanning, Dye, Paint, Putty
Precious Stones
Fish And Seafood
Whereas, 76% to 80% of total exports by India to China consists of Ores, Slag, Cotton,
Yarn, Fabric; Precious Stones, Metals, Artificial Flowers, Feathers and hides, Copper
Articles and skin.
Trade relations between China Gujarat
Mr. Narendra Modi recently went for a fiveday visit to China. The visit has been a
great success. Chinese leadership praises accelerated socio-economic development
and inclusive growth in Gujarat.
Huawei: To consider for Gujarat
India China connectivity
Metro/ High-speed Train
Mass-housing
Valued addition in Agro-forestry
Tourism and Sports
Kalpasar project
Student Exchange
Chinese language teaching
Automobile sector of China

Automotive industry in the People's Republic of China has become the largest
automotive market in the world since late 2008. China's automobile industry has been
in rapid development since the early 1990s.
In 2009, China produced 13.79 million automobiles, of which 8 million were passenger
cars (sedans, sport utility vehicles (SUV), multi-purpose vehicles (MPV) and
crossovers), and 3.41 million were commercial vehicles (buses, trucks, and tractors).
Of the automobiles produced, 44.3% are local brands, the rest being produced by joint
ventures with foreign car makers such as Volkswagen, Mitsubishi, General Motors,
Hyundai, Nissan, Honda, Toyota etc. Most of the cars manufactured in China are sold
within China, with only 369,600 cars being exported in 2009.
In 2009, 13.759 million motor vehicles were manufactured in China, surpassing United
States as the world's largest automobile market in the world. In 2010, both sales and
production topped 18 million units, with 13.76 million passenger cars delivered, this is a
new world record for the most number of cars sold in a single country in human history.
The number of registered cars, buses, vans, and trucks on the road in China reached
62 million in 2009, and is expected to exceed 200 million by 2020. The consultancy
McKinsey & Company estimates that China's car market will grow tenfold between
2005 and 2030.
PEST Analysis
Political Analysis
China is in a state of transition now. Being a socialist country, China has carefully
changed its political system in recent years, while dramatic changes have taken place
in its economic system. In 1979, China started its open policy and economic reform.
The Chinese government persisted on carrying out the political guideline of developing
economy and enriching Chinese people.
China has promised to break the tariff barrier on car-imported and spare parts after join
WTO.
1. First, there will be a drastic reduction in customs duties on imported cars from
the current 100% to 25% by 2006.

2. Second, the tariff on car parts will be reduced gradually down to 10% in 2006.
3. Third, the import quota system will be abolished in 2005. These measures will
lower the costs of the car-imported. Its no doubt that the reduction of tariffs will
intensify the competition among the foreign and domestic motor companies in
the future automobile market.
The Chinese government has declared its 10th Five-Year Plan for National Economic
and Social Development. Accordingly the Chinese National Economic and Social
Committee announced the tenth Five-Year Plan for car industry and stated three
principles in this document. These principles are self-development, fair play and
openness.
Legal Analysis
Legal system also plays a very important role in the international business. In order to
establish a well-functioned market economy, the Chinese government has emphasized
on drawing up laws.
These laws include The Law of the P.R.C. on Joint Ventures Using Chinese and
Foreign Investment, Company Law of P.R.C., etc. China has a stable government,
the protection of private property is adequate.
Economical Analysis
Macroeconomic
From 1979, Chinas gross national income (GNI) per capita has increased rapidly (see
graph 1), gross domestic product (GDP) has reached US$1.1 trillion in 2000, and the
foreign exchange reserve is also significant and has increased to US$190.05 billion at
the end of August 2001, which is the second largest country of the world.
From 1979, Chinas gross national income (GNI) per capita has increased rapidly (see
graph 1), gross domestic product (GDP) has reached US$1.1 trillion in 2000, and the
foreign exchange reserve is also significant and has increased to US$190.05 billion at
the end of August 2001, which is the second largest country of the world.
Microeconomics
From 1978, the number of cars in China has been increased by 12% every year, which
is a little bit higher than the rise of Chinas GDP. In addition, the growth rate of Chinas
total car output in 2000 was 11%, which was 7.8% higher than that of the world and
ranked the ninth of the world.
Most of the world famous car-makers invested China since 1998. All their plants started
production and sales within 1-2 years.
Social and Culture Environment Analysis
The survey of the basic condition of 150,000 urban citizens in China that is made by
National Bureau of Statistics of China shows every 10,000 urban citizens just have 114
cars.
a new research made by Roland-Berger predicts that the car sales in Chinese market
will reach to 1,000,000 in 2005, and 2,000,000 in 2010 after China enter WTO. The
demand of 1.2 litres exhausting private car will increase fastest among all the
automobiles
Consumers Psychology
In 2000, Chinas GDP per capita reached over US$ 800. In terms of economic principle
when GDP is at this level, or family annual income is the half of the cars price, this kind
of family is suitable to buy a car.
At present, there have been more than 500,000 families having US$5400 annual
income. This means China has had the basic conditions of developing cars for familyuse, and at least 300,000,000 citizens have the capability of purchasing cars according
to the income of urban citizen.
Environmental Factor Influence on Car Consumption Behavior

o Car Consuming Environment
There are approximately 20% Chinese urban families, in other words
about 26 million families will want to buy cars, which is equal to the total
outputs of automobiles in world.
o Political Influence on Car Consumption
The planning for the tenth five-years of automobile issued by China
Economy and Trade Committee points out that China will focus on
developing car which is under 1.3 liters exhausting private cars and will
provide a series of preferential policy to encourage people to buy cars.
o Car-buying Tax
At the beginning of 2001, Chinese government announced to use the car
buying tax instead of the car-buying fee. This change can reduce the
unreasonable charges, such as in Chengdu (one of biggest city in South
West China), people who want to buy a car must be charged 10% 15%
of car buying fee, which is repealed now.
Influence of WTO on Car Consumption Behavior
It is no doubt that the selling price of car will decrease gradually after China enters
WTO. Consumers who want to buy a car will be delighted to see this situation. On the
other hand, the Chinese government has got ready for policy and consumption system
to make a suitable environment after entering WTO. It can be seemed that the market
of car consumption will be triggered in the future.
Human Resources Analysis
With the development of high-education and skill training, China has prepared a pool of
well educated and trained people that they have sufficient skills to meet our
requirement.
The labor cost in China is relatively lower than many developed country because of the
abundant labor. Moreover, China also has a mature human resources system for
foreign investment.
Recommendations and Invest Plan
Overall Attractiveness
China has experienced a stable political system (which is considered totalitarian) with
rapid economic growth for more than 10 years, but some political risks still exist. The
Chinese government is still insisting on its communist and totalitarian policy, there is no
guarantee that China will continue to its open policy and maintain the rapid GNP
increase. China also has an unsatisfied human right record; corruption exists in some
economical activities in China, all these will be obstacles to foreign investments.
According to the above analysis, it seems that it should be beneficial to invest a family
car company because of its large market and strong consuming power.
The overall attractive of China as an investment site depends on balancing the benefits,
costs and risks associated with doing business in China. Despite all the above risks, we
still consider China as a suitable country for our investment.
Investment Strategy
The plant should be put into production within 2 years at a capacity of 50,000/year. If
its guaranteed by the government policy after China joins WTO, we shall introduce our
car-rental and financial service (auto loan) in the future.
Entry Time
As the 2nd largest car manufacturer in the world, Ford had been waiting patiently to
enter the Chinese Market for more than 20 year. Some other world-famous car
manufacturers (such as Volkswagen, General Motor, Toyota, etc.) had already started
their business years ago, but we do not consider that it is too late to enter the Chinese
family car market.
we should not care too much about where we enter this market early or late, we should
improve ourselves progressively toward the purpose of surpass our competitors. We
have the ability to achieve that. Actually there are also some advantages of enter the
market late, such as we can learn the lesson from some other unsuccessful car
manufacturers like Peugeot, which closed its plant in Guangzhou.
Entry Procedure
According to the current Chinese policy on motor industry, Ford will establish a joint
venture with 50% share with Chang An Automobile Company in Sichuan Province.
Chang An Automobile Company is the 3rd largest car manufacturer in China, which has
the experience of car-making for more than 20 years. The place that Ford will build its
plant is located in the west part of China, which will benefit from the favorite policy of
Developing West (of China).
Ford will introduce it car-rental service (Hertz) after China opens its car-rental market.
We will also set up our financial service in China in the future. Ford should invest China
slowly but steadily and should always consider there would be political or economic
problems down the road.
Introduction of Automobile Industry of China
The automobile industry is already a major force propelling the Chinese economy and
its workforce; the main question is whether China will mainly consume automobiles in
its own market, take a more aggressive export-oriented approach similar to that of
Japan and Korea, or create some mixture of these two.
Indicators suggest that China, already far more open to foreign investment than either
Japan or Korea, may take a hybrid approach that focuses on domestic consumption
while also building vehicles for export in order to induce Chinese companies to produce
world class cars. Additionally, Chinas automotive parts manufacturing sector is export
focused, increasingly complex, and rapidly moving from low-cost to more value-added
production.
In 2008, China produced nearly eight times as many motor vehicles as it did in the mid1990s. From January to October 2009, about 10.89 million vehicles, reportedly, were
sold in China. Chinese vehicles have become increasingly sophisticated since the
1980s, as a result of partnerships with major foreign automakers (Volkswagen, GM,
Toyota, Honda, Nissan, Mazda, Hyundai and Kia) designed to foster technological
cooperation.
In March 2009, the Chinese government issued the latest automotive industrial policy,
which encourages the industry to consolidate and restructure. The plan raises eight
development goals for the auto industry in the next three years (from 2009 through
2011).
China is second only to the United States in automobiles. Specialists say that the
number of privately owned cars in China was close to 22 million at the end of 2006,
which makes China the second largest auto market in the world.
Role of automobile sector in Chinese economy
China has emerged into the worlds fastest-growing major auto market, with an average
annual growth of more than 22.2% from 1998 to 2006. In 2007, automobile production
and sales jumped over 20%, despite soaring raw material prices, indicating continued
robust growth in the worlds second largest auto market. Automobile production
amounted to 8.88 million in 2007, with an increase of 22.02% over 2006.
This figure closely approaches the target of 9 million units set in the eleventh 5-year
(2006-2010) plan for the automobile industry by Chinas National Development &
Reform Commission, the nations top economic planner. Auto sales totaled 8.79 million,
representing a growth of 21.84% year-on-year.
Import & Export
The share of overseas sales to the countrys total sales rose from 16.7% in 2006 to
31.4% in 2007, showing that the overseas market is becoming an important contributor
to growth.
By the end of 2007, its total sedan exports stood at 70,000 units, sealing its leading
position in Chinas domestic auto industry. Shanghai-based Brilliance Auto also made
an impressive display at the Geneva Auto Show in 2007 and its BS6 model has already
entered Germany.
By the end of 2007, Chery had opened 7 factories in 6 foreign countries. The cars
assembled in the 7 factories have made up more than 80% of the companys total
export. Geely has set up plants in Russia, Ukraine and Indonesia.
The automobile import industry also sees a promising future, due to the rising demand
for automobiles. Chinas auto imports jumped more than 37.9% year-on-year to
314,130 units in 2007, including 302,096 passenger cars and 12,034 commercial cars.
In 2007, China imported 139,867 sedans valued at US$5.01 billion, and 142,228 SUVs,
totaling US$4.4 billion, and accounting for 45.5% and 39.7% of the total auto import
value respectively
Foreign Access to the Chinese Automotive Market
Trade
The Chinese auto sector is competitive and has a well-developed supply chain. Imports
of foreign-made auto parts will likely decrease as OEMs continue to increase their local
capacities.
The higher quality Chinese auto parts are increasingly being integrated into the global
supply chain. Currently the import tariff for whole vehicles is 25% and for automotive
components is 10%.
Investment
China offers fiscal and financial incentives to attract foreign investment in R&D
strategies as part of the central governments strategy to speed up the transfer of
international technology. China currently provides tax incentives for enterprises
engaged in research and development activities, allowing R&D enterprises to deduct
50% of R&D expenses.
Foreign firms looking to produce passenger vehicles cannot set up WOFEs, but must
partner with a local Chinese firm in the form of a JV, with the foreign partners stake
limited to 50%.
Production
The Chinese government gives high priority to developing a competitive indigenous
auto industry. China maintained high tariff wall to protect domestic automobile sector. In
2000, average tariff on vehicles were more than 40%.
Automobile policy allowed joint ventures (JVs) with MNCs. Generally JVs were limited
to single product line. Local content regulations require at least 40 percent local content
for sedans and 50 percent for commercial vehicles (Veloso & Kumar 2002)
In 2006, the production and sale of automobiles were 3.63 million units and 3.53
million, up by 28.94% and 26.71% than 2005 separately. The output and sales of
passenger vehicles have been 2.60 million units and 2.51 million units separately, up
by 40.30% and 36.53% than 2005; the output and sales of business vehicle have been
1.03 million units and 1.02 million units respectively, up by 7.16% and 7.71% than 2005
Sales & Financial Performance
In this section, we will discuss the market presence and financial performance of the
various manufacturers by considering both the growth of sales and (reported)
profitability for 2003 and 2004.
Companies 2004 Revenue (billion Yuan)
2 Shanghai Automotive Industry Corp. 119.53
3 Dongfeng Motor Corp.
96.07
4 Beijing Automotive Industry Holding Co.
46.90
5 Guangzhou Automotive Industry Group
40.14
6 Changan Automobile Group
38.43
7 China Heavy Automobile Group
23.38
8 Brilliance Automotive Holding Co.
22.65
9 Anhui Jianghuai Automobile Group
10.78
10 Hafei Automotive Holdin g Co.
6.10
11 Zhengzhou Yutong Co.
5.94
12 Southeast Automotive Industry Co. 5.46
13 Chery Automobile Co.
5.11
14 Shanxi Automobile Group
5.01
15 Chongqing Isuzu Automobile Co.
3.62
16 Geely Automobile Holding Co.
3.42
17 Chongqing Hongyan Automobile Co. 3.40
18 Hunan Changfeng Automobile Co. 2.92
19 Dandong Shuguang Automobile Co. 2.86
20 Baoding Greatwall Automobile Co. 2.69
Economic Development Dimensions
The Chinese auto industry contributed $12 billion to the economy in 2001, representing
5 percent of the total value-added of manufacturing in China, a near doubling of this
percentage from its level in 1990 (CATARC, 2002). During the 1990s, China received
more foreign investment than any other developing country ($38.4 billion in 2000 alone)
as investors sought to reap some of the gains of Chinas fast-growing economy. Much
of this foreign investment in China was in the automobile industry. By 2001, more than
800 Chinese companies in vehicle-related industries had received FDI and the total
agreed investment was valued at $233 billion with actual registered capital of $12
billion.
Energy Dimensions
Any visitor to one of Chinas big cities cannot help but notice that these cities are
already jammed with vehicles. Most of Chinas eight million passenger cars are used in
cities. In fact, 17 percent of Chinas cars are located in Beijing, Shanghai, Chongqing,
and Tianjin (CATARC,2002).
Environmental Dimensions
There is increasing evidence that motor vehicles are now the primary source of urban
air pollution in China, which was not the case even ten years ago. Heating, cooking,
power generation, and industrial coal consumption used to be the main contributors to
urban air pollution, but in the biggest cities coal was mostly replaced by natural gas for
residential uses during the 1990s.
China and India in the Global Automotive Industry

India
Market grew 2.8% year-on-year in September the first rise in 2 months.
Passenger car sales expected to grow only 0.6% this year
China
Sales fell 1.4% in September, after a 6% fall in Augus
Due to a slowing economy, rising fuel prices and natural disasters.
Passenger car sales are up 6% over the first 9 months half the growth rate of
2007
Economic comparison
China is second only to United States in automobiles. Specialists say that the
number of privately owned cars in China was close to 22 million at the end of
2006.
India is projected to have the largest number of cars in the world 611 million to
be precise by 2050. According to the third BRIC (Brazil, Russia, India, China)
report from investment banking firm, Goldman Sachs, this means every sixth car
produced in the world will be sold in India.
Vehicle Export & Import

Fast growth in January-June 2008 car imports
Vehicle imports rose 53% year-on-year to 212,800 units during January-June

2008, up 18 percentage points and three times the rate of overall passenger car
sales growth.
Imports of SUVs in the first half jumped 79% to 108,500, accounting for nearly
half of the total imports, a growth rate of 41 percentage points
China's auto parts imports and exports increased in first half of 2008
Imports from Japan were US$3.2billion, 39% of total imports.
Total exports during Jan08-Jun08 were US$15 billion, a YOY increase of 21%.
Other major target countries were Japan, Korea, Germany and the Netherlands.
Chinas auto part industry is very fragmented. There are over 5,000 companies,
but only about 130 companies have annual sales of RMB100 million (US 12.4m)
or more.
China auto parts exports are beginning to accelerate, and the Ministry of
Commerce has an ambitious plan to boost the export to US$120 billion in 10
years.
Imported automobile components totaled US$8 billion (Jan08-Jun08), up 20%

over the same period last year.
The Local Auto parts Manufacturers
Low entry barriers have enabled hundreds of companies to enter the market
every year
Industry consolidation, through Mergers and Acquisitions, is accelerating in

recent years
Auto parts factories set up by local government to support local assemblers
Foreign invested auto parts manufacturers, mostly JVs with top Chinese
assemblers
Currently there are four types of auto parts manufacturers in China
Subsidiaries of major assemblers in the country
Private-owned enterprises, especially in Chinas Jiangsu and Zhejiang Province

Rapidly increasing levels of vehicle technology sophistication, which is quickly
surpassing their competitive abilities to produce or reproduce.
Chinas accession to the World Trade Organization increasing global competition
India overview
The Worlds Second largest 2-wheeler market
Asias 3rd largest passenger car market
The Worlds 4th largest commercial vehicle market
The Worlds 5th largest bus and truck market (by volume)
Maruti (now majority owned by Suzuki) has dominated the market since
deregulation in 1993 with its wide range of inexpensive small cars
After Suzuki, Hyundai was first foreign firm to set up own operations in the
country, since joined by GM, Ford, Toyota, Honda and others
Tata Motors bought Jaguar & Land Rover, hope to launch Nano 1-lakh ($2,500)
car later this year
Improvements to road network and infrastructure are the principal growth drivers
of commercial vehicle segment, heavy truck market fell 15% in 2007 but is
rebounding this year.
India is to become an auto manufacturing hub driven by investment plans by

Global VMs
Foreign carmakers have already invested USD 3 billion in India over the past
five ears
Estimations of the investments to be around USD 9 million by FY09
Industry Challenges
Infrastructure
Roads, railways, seaports and airports: capacity constraints. In the process of

being expanded / upgraded.
Electricity: shortage in some states. Captive backup power required. Cost is also
high.
Labor
Multiplicity of labor laws
Lay-offs and retrenchment of permanent labor difficult
Productivity (in general) lower than in China
Taxation
Multiple indirect taxes which have a cascading effect
Higher tax rates than China
Reducing import duties
Business Environment
Rising input prices
Appreciating Rupee
Government initiatives for the industry
The Government, together with the Industry, has drafted a ten year Automotive
Mission Plan (AMP), promoting
Export of services in areas such as design, engineering, and back office

operations.
Manufacture of vehicles and components
Key objectives of the AMP by 2016
Increase sector turnover from us$35bn to US$145bn
Increase exports from US$4bn to US$35bn
Setting up world-class automotive testing and R&D infrastructure in the country
To ensure seamless integration of Indian automotive industry with the global

industry.
Increase employment to 25 million
Implementation of the National Automotive Testing and R&D Infrastructure

Project (NATRIP) that aims at facilitating introduction of world-class automotive
safety, emission and performance standards in India.
Conclusions
China is second only to the United States in automobiles. Specialists say that the
number of privately owned cars in China was close to 22 million at the end of 2006,
which makes China the second largest auto market in the world, behind the USA. At
present, there are 30 cars for every thousand people in China, which is far below
the world average of 120 cars.
The rapid transformation of China into an economic powerhouse, and the likelihood that
India will follow not far behind, means that the US and other developed countries must
prepare for a different future, one where they must learn to share economic power as
never before.
India is projected to have the largest number of cars in the world 611 million to be
precise by 2050.
According to the third BRIC (Brazil, Russia, India, China) report from investment
banking firm, Goldman Sachs, this means every sixth car produced in the world will be
sold in India.
Tata Motors, India's largest four-wheel automaker, is planning to capitalize on all this
spreading wealth by launching the Nano for Rupees One Lakh. Its sticker price of about
$2,500 would make it the world's cheapest car. Only eight Indians out of every
thousand own a car.
Bibliography
http://en.wikipedia.org/wiki/Automotive_industry_in_the_People%27s_Republic_
of_China
http://www.infodriveindia.com/
http://www.eximbankindia.com/old/press991105.html
http://awbriefing.com/presentations/161008_eric_wallbank.pdf
http://www.economywatch.com/world-industries/automobile/
http://www.china-briefing.com/news/2011/03/11/business-leaders-from-indianand-chineseautomotive-
industries-meet-in-shanghai.html
A
GLOBAL STUDY REPORT
ON
CHINA AND INDIA'S TEXTILE INDUSTRY STRATEGIES FOR INCREASING INDIA'S

EXPORTS TO THE WORLD THROUGH A COMPARATIVE STUDY
Submitted to
C K SHAH VIJAPURWALA INSTITUTE OF MANAGEMNT
In
Under the Guidance of
Mr. Prakash Patel
(Asst. Professor)
Submitted by
Gaurav Nagori
107050592019
Mansi Patel
107050592020
Jaydeep Sharma
107050592021
Snehal Muley
107050592022
Urmik Mehta
107050592023
Hardik Pethani
107050592024
Batch: 2010-12
MBA SEMESTER III
MBA PROGRAMME
Ahmedabad
Nov, 2011
SUMMARY
CHINA AND INDIA'S TEXTILE INDUSTRY STRATEGIES FOR
INCREASING INDIA'S EXPORTS TO THE WORLD THROUGH
A COMPARATIVE STUDY
The textile industry performs a major role in both the countries India and China. It
provides huge employment to the people. China saw quicker growth in textile exports
but slower rise in foreign sales of garments in the first five months of this year, sources
with the General Administration of Customs. In the initial phases, textile mills were
located in and around the rivers since they were powered by water wheels. After the
steam engine was invented, the dependence on the rivers ceased to a great extent. In
the later phases of the 20th century, shuttles that were used in the textile industry were
developed and became faster and thus more efficient. This led to the replacement of the
older shuttles with the new ones.
Today, modern techniques, electronics and innovation have led to a competitive,
low-priced textile industry offering almost any type of cloth or design a person could
desire. With its low cost labor base, China has come to dominate the global textile
industry.
The trade of Chinese textile is also increasing at business and international level.
In the last decades, the scenario changed. Not only the textile industry, but all the
Chinese industrial sector (especially for exports) has expanded drastically. Since 1990,
Chinese exports expanded at a growth rate more than twice the global growth rate.
India & China Trade Relations:
India & China signed a Trade Agreement in 1984 which provided for Most Favored
Nation Treatment and later in 1994, the two countries signed an agreement to avoid
double taxation. According to the Indian Commerce Minister, Kamal Nath, China would
soon become India's largest trade partner within the next 2-3 years, after the US and
Singapore.
COMPARISION OF TEXTILE INDUSTRY IN INDIA AND CHINA

ON DIFFERENT VARIABLES
VARIABLES
INDIA
CHINA
Production
it contributes to 4% of GDP
it Contributes to 6% of
GDP
Supply & Demand
Consumption is about to be
double by 2020
Export is about to
increase
Investments
Around US$ 5.35 billion of
Around US$ 15.35
foreign investment is
billion of foreign
expected to be made in
investment is expected
India in the textile sector
to be made in India in
over the next five years
the textile sector over

the next five years
Value Chain
The textile value chain
The textile value chain
extends from raw material,
extends from raw
i.e., fibres to finished
material, i.e., fibres
to
Major Players
products,
finished products,
i.e., clothing and made-ups,

with spinning, weaving,
knitting and processing
Bombay Dyeing
i.e., clothing and madeups, with spinning,

weaving, knitting and
processing
Tongxiang Top Textile
Vardhaman Group
Co., Ltd.
Raymond Ltd.
Hangzhou Haiyue Lace

& Cloth Co., Ltd.
Addchance Holdings
Limited
DISTRIBUTION CHANNEL
For any industry it is very essential to have a cost effective and efficient
distribution channel that adds value into whole value chain. Effective Distribution
channel and Integrated Supply Chain Management help in growth of industry and make
it more competitive. India has large and diversified Textile Industry with different
segments and sectors; therefore it has fragmented Sales and Distribution Network.
In
Indian Textile
Industry products
are distributed
mainly through
following
intermediaries as a part of Distribution Network:
Importers.
Indenting Agents
Distributors.
Wholesalers.
Retailers.
Dealers
Commission Agents
Products are sold mainly through following marketplaces:
Small and Large Retail Outlets:
These includes the different retail outlets where the various textile products are sold,
Westside, Reliance trends, pantaloons etc are included in the retail outlets.
Supermarkets: BigBazzar, More megastore, Spencers, V-mart etc are the

supermarkets where the textile products are sold.
Policies of Indian Government for promotion of Textile

Technology Upgradation Fund Scheme
Export promotion councils
Scale and Integration
Encouraging FDI
Innovation and Product Development
POTENTIAL FOR IMPORT/EXPORT IN INDIA/GUJARAT:

India is replete with natural resources like cotton, jute and silk. Indian products
were known for fine designing, embellishment and craft. Besides this the ancient Indian
fabric designers and weavers were one of the best in the world. Indian textile Industry is
also largest employer (after agriculture) of workers directly and indirectly. Due to ethnic
diversity and cultural multiplicity besides racial traces in India's hinterland, several
designs and variety of costumes and apparels are used that enrich Indian textile
garments design possibilities.
India processed 1900 million kgs of jute fiber at 1st rank, 15 million kgs of raw
silk at 2 nd rank, 2700 Million Kgs of cotton fiber at 3rd rank, over 2000 million Kgs of
man madefiber at 5th rank, and finally 51 million kgs of wool at 8th Rank in Global
markets.
To enhance competitiveness both categories of factorsInternal-like productivity and technology adoption by individual units, and External
-like fiscal policy measures, labor policies and infrastructure are important factors to
improve in.Cost of production of textiles yarns and fabrics is much higher in India
despite low labour rates. We should not forget that India will also lose this advantage
over time.
Hourly wage cost in textiles in select countries (US $):

Switzerland 22.15
USA
14.24
Argentina
5.90
Brazil
3.20
Mexico
2.20
China
0.69
India
0.58
Pakistan
0.37
The labor productivity; power and other costs are higher in India.Percentage
share of capital costs too was higher in India than china in both Ring and OE yarn and
fabric production (India 20%-29% of total cost of production) as compared to China
(12% to 26%). India has low competitive position with regards to availability and price of
cotton (good quality), low level of technology, poor automation, and lack of scale
economies in weaving and processing sector, and low brand image in textile garment
sector.
Key Advantages:
India is the third largest producer of cotton with the largest area under cotton
cultivation in the world. It has an edge in low cost cotton sourcing compared to
other countries.
Average wage rates in India are 50-60 per cent lower than that in developed
countries, thus enabling India to benefit from global outsourcing trends in labor
intensive businesses such as garments and home textiles.
Design and fashion capabilities are key strengths that will enable Indian players to
strengthen their relationships with global retailers and score over their Chinese
competitors. This is also visible in auto sector and many other industries like IT and
software and Pharma research.
Production facilities are available across the textile value chain, from spinning to
garments manufacturing. The industry is investing in technology and increasing its
capacities, which should prove a major asset in the years to come.
India has gathered experience in terms of working with global brands and this
should benefit Indian vendors.
Future Outlook
Expectations are high, prospects are bright, but capitalising on the new emerging
opportunities will be a challenge for textile companies. Some prerequisites to be
included in the globally competing textile industry are:
Imbibing global best practices

Adopting rapidly changing technologies and efficient processes
Innovation
Networking and better supply chain management
Ability to link up to global value chains.
The Indian textiles industry has established its supremacy in cotton based
products, especially in the readymade garments and home furnishings segment. These
two segments will be the key drivers of growth for Indian textiles. Readymade garment
exports were worth US$ 8 bn in FY06 and will cross US$ 16 bn by the end of 2010,
assuming a conservative growth of 15% per annum. According to estimates,
investments in textiles are expected to touch US$ 31 bn by 2010.
Current status of china's textile industry:
The Chinese textile industry has strong productivity along the supply chain. China ranks
first in world production of yarn and cloth, apparel and other finished products. Textile
and apparel production remains a profitable industry in China. The current situation of
China's labour market can be described as having sufficient labour supply and high
unemployment rate.
To analyze the impacts of China's cotton textile product chain on the economy,
environment and society in 2020, it is necessary to predict the global cotton
consumption, China's cotton production, China's cotton consumption and the
export/import of China's textile and apparel.
Facing complete trade liberalization, the importers will set up non-tariff barriers to
replace the measure of quota. We can assume that the gap in textile and apparel export
between Scenario 1 and2 are induced by quotas, and we can thus get the result of
environmental and social impacts in 2020.
Strategic Initiatives :
Technology Upgradation
Integration
Encouraging FDI
Innovation and Product Development
Soft Skills
Labor Laws
Logistics and Supply Chain
OPPORTUNITIES FOR INDIA COMPETITION FROM CHINA:

Chinese clothing industry is known to be having low-fashion and lowembellishments. For example, in of the strengths in handworks like embroidery, sequins,
printing and designs. India, therefore, has an edge over China when it comes to fashion
garments, since international clothing trade is oriented towards the fashion content
rather than the volume of production. Other factors affecting the Chinese exports are its
wage increase, power shortages and rise in cost of credit. The growing environmental
compliance, mainly because of China's efforts to project a clean image of an
environmentally friendly country for the Olympics2008, is likely to increase cost of
production in the textile sector. China has, of late, been adopting stricter norms like
closure of textile mills, which have coal, based power plants.
PRESENT TRADE SCENARIO GLOBAL TEXTILE INDUSTRY

According to classical theories of international trade and global economy
circumstances currently, free trade as one of the essential aims of WTO is the main
tendency for international trade development. Therefore plenty oftrade agreements
among different countries and regions have led to lower, even no tariff in categories of
products' importation and exportation.
CHINA'S TEXTILES TRADE AND COMPETITIVE STATUS

The incremental exportation is one of the significant impetuses of getting the
rapid development in textile industry. With the promotion of integrated international

textiles trade, textiles industry is more and more dependent on global markets.
Trade Scale and the Position in World Market

Trade Scale and Importation and Exportation Structure
China's Textiles Industry's Status in World Market
Competition of China's Textiles Exportation
Price Competition
Non-Price Competition
Branding competition
TRADE BARRIERS ON EXPORTATION
Tariffs Trade Barriers
Non-Tariff Trade Barriers
Import Quotas
Anti-Dumping
Green Trade Barrier
Other Trade Restrictions
POTENTIAL FOR IMPORT / EXPORT IN INDIA / GUJARAT
Indian textile Industry and export performance
Cost of Production
Level of Integration
Supply Chain Management
Textiles and clothing industry of China is going on with relative large surplus. But the
advantages are limited in medium-and-low grade products, and deficits exist in wool,
fabrics, bombazine, worsted, high grade textiles and apparel, and so on.`
SWOT ANALYSIS
SWOT
INDIA
CHINA
STRENGTH
Cost Competitiveness
Raw Material
Cheap Labour
Raw Material
WEAKNESS
Technological
Obsolescence
Industry Fragmented
low education of
employees
OPPORTUNITIES
Product Development
Use of
newTechnology
expanded at a growth
rate more than twice
the global growth rate
THREATS
Competition in Domestic
Market
Chinese Growth in
international market
benefits of its high

competitiveness in
textile sector
price hike effect in
yarn and cotton price
government policy
CONCLUSIONS AND
SUGGESTIONS
To conclude India has
Low competitive position with regard to price of raw material with good
quality
Low level of technology
Low availability of good raw material
Poor automation
Lack of scale of economies
Low brand image in textile sector
To suggest India has to
VILLAGE ADOPTION PROGRAM

The cotton yield in Punjab declined to very low level 300 kg/ha in 1999
leading to drop in cotton cultivation.
Best yield award to cotton growers started in
2001.
Village adoption program for increasing cotton productivity by improving
cultivation practices and quality seed started in 2003.
Cotton productivity grew to 700 kg/ha in
Punjab.
The model is all set to be replicated in rest of cotton producing States in
India, which will give sustainable increase in productivity and cotton crop.
Improve the infrastructure base, especially power availability to textile and
apparel units.
Improve the cost structure of Indian companies to counter the disadvantage
compare other countries
Enhance productivity and economies of scale by removing investment
barriers.
BIBLIOGRAPHY
www.google.com
www.wikipedia.com
www.researchinchina.com
www.countrystudies.us
www.findpdfdoc.com
A
GLOBAL COUNTRY STUDY
ON
Chinese (Mandarin) Language Study
Submitted to
Under
UNDER THE GUIDENCE OF
Faculty Guide
Class In-Charge
DR. RAJESH KHAJURIA
DR. KERAV PANDYA
DIRECTOR CKSVIM
ASSISTANT PROFESSOR
Submitted by
Pankaj Kubadiya (107050592025)
KhushalKheni (107050592026)
ShabbazKazi (107050592027)
NikunjBhikadia (107050592028)
Milan Domadiya (107050592029)
Prikesh Soni (107050592030)

M.B.A PROGRAMME
Ahmedabad
CHINESE LANGUAGE (MANDARIN) STUDY

1. Introduction of Chinese Language
2. Varieties of Chinese Language
It includes the linguistic subdivisions ("languages" or "dialect groups")
within China itself. It covers traditionally recognized seven main groupsof
language, in order of population size.
3. Why Study Chinese(Mandarin)?
The study of the Chinese language opens the way to different important
fields such as Chinese politics, economy, history or archaeology. But to study
Chinese finally means to study a culture, a people
3.1Some important Facts about china(which influences study of Chinese
(Mandarin)
3.2 Surprising facts about Mandarin
3.3 Importance of Chinese(Mandarin) for career
4. History of Chinese(Mandarin) Language
5. Study Chinese(Mandarin) Language
5.1Characters
5.1.1 Simplified Characters
5.1.2 Traditional Characters
5.2Pronunciation
5.2.1The mandarin syllable(a unit of pronunciation in word)
There are three parts to all syllables in Mandarin.
5.2.1.1 Initials
5.2.1.2 Finals
5.2.1.3 Tones
5.3 Lessons
It covers lessons to learn mandarin language.Each lesson consists
FIVE parts:
5.3.1 Dialogue
5.3.2 Grammar
5.3.3 Vocabulary
5.3.4 Examples
5.3.5 Exercises
6.Difference between English and Chinese(Mandarin)

6.1 Introduction
6.2 Alphabets
6.3 Phonology
6.4 Grammar Verb/Tense
6.5 Grammar Other
6.6 Vocabulary
7.Can Chinese Replace English as the Global Language?
It cannot be denied that till date Chinese is the most widely spoken language in the
world. But that is because of the huge Chinese population, within and outside China.
It seems quite improbable that the most widely spoken language in the world will also
become the most popular.
Executive Summary
The Chinese language (spoken in its Standard Mandarin form) is the official
language of the People's Republic of China and the Republic of China (Taiwan), one
of four official languages of Singapore, and one of six official languages of the United
Nations.
This study focuses on Chinese language which opens the way to different
significant fields such as Chinese politics, economy, history or archaeology. But to
study the language finally means to study a culture, people. One fifth of the planet
speaks mandarin language. Mandarin Chinese is the mother tongue of over 873
million people, making it the most widely spoken first language in the world.
Chinese has a relatively uncomplicated grammar. Unlike French, German or
English, Chinese has no verb conjugation and no noun declension (e.g., gender and
number distinctions). For example, while someone learning English has to learn
different verb forms like see/saw/seen, all you need to do in Chinese is only to
remember one word: kan.
International businesses prefer to hire people who speak more than one
language. China has become a huge market, and business leaders are looking for
people who can speak Chinese and work successfully in a Chinese cultural context.
Knowing Chinese may give you an edge when competing for an important position.
Our Study includes history of mandarin language. Mandarin emerged as the

language of the presiding class during the latter part of the Ming Dynasty (1368
1644). When the Qing Dynasty fell in 1912, the Republic of China kept Mandarin as
the official language. We have covered two sets of Mandarin characters: Simplified
and traditional characters. We also have studied pronunciations of mandarin
language. There are three different parts of syllables in Mandarin: Initials, finals and
tones. Our study covers lessons to learn mandarin language. Each lesson consists
five parts: dialogue, grammar, vocabulary, examples and exercise. Our study also
covers the difference between English (global language) and Mandarin language on
the basis of some grounds like alphabets, phonology, grammar and vocabulary.
Mandarin language is very difficult and complex to study because it consists of

6000 characters as compared to 26 in English. It also takes much more time to study
for the people outside China. From our study, we have founded that for speaking and
pronunciation of mandarin language, it is necessary to pay attention to the tones and
recommended to read the text aloud. To learn mandarin language, it is
recommended to practice writing a lot, look for radicals (components of Chinese
characters) and buy beginners dictionary to learn new words of mandarin language.
It cannot be denied that till date Chinese is the most extensively spoken
language in the world. But that is because of the huge Chinese population, within and
outside China. It seems quite improbable that the most widely spoken language in
the world will also become the most popular.
Introduction of Chinese Language

Chinese is a language or language family which includes varieties that are
mutually intelligible to different degrees. About twenty percent of the worlds
population, or over one billion people speak different variety of Chinese as their
native language. Internal divisions of Chinese are perceived as dialects of a single
Chinese language by their native speakers, and not separate languages. Some
linguists and Sinologists consider this identification inappropriate.
Varieties of Chinese Language

Although all varieties of Chinese are analytic and tonal, Chinese is distinguished
by its high level of internal diversity. There are between 7 and 13 main regional
groups of Chinese depending on the classification scheme. A table below shows the
linguistic subdivisions ("languages" or "dialect groups") within China itself.
Name
Total Speakers
Mandarin
c. 1.365 billion
Wu
c. 90 million
Yue
c. 70 million
Min
c. 50 million
Xiang
c. 35 million
Hakka
c. 35 million
Gan
c. 31 million
Why Study Chinese (Mandarin)Language?

Some important Facts about china (which influences study of
Chinese (Mandarin))
1. China is one of the worlds richest and oldest continuous cultures, over 5000
years old.
2. China is the most populous nation in the world having 1.28 billion people.
3. One fifth of the world speaks Chinese. Mandarin Chinese is the mother tongue
of about 873 million people, making it the most widely spoken language in the
world.
4. In addition to the Taiwan and Peoples Republic of China, Mandarin Chinese is

also spoken in the influential Chinese communities of Indonesia, Thailand,
Malaysia, Brunei, Singapore, the Philippines, and Mongolia.
5. China is second largest economy in the world.
Surprising facts about Mandarin

Chinese has a relatively much uncomplicated grammar. Unlike, German, French
or English, Chinese has no verb conjugation (so no need to memorize verb tenses)
and no noun declension (e.g. number and gender distinctions). For example,
someone learning English has to learn different verb forms like see/saw/seen, but in
Chinese you just need to remember one word: kan. While in English you have to
distinguish between cats and cat, but in Chinese there is only one form: mao. (Of
course Chinese conveys these distinctions of number and tense in other ways)
The word order of Chinese is subject verb object, just same as in English.
A large number of the key terms of Mandarin Chinese (such as the terms for state,
science, health, party, inflation, and even literature) have been formed as the
translations of English concepts.
Chinese is important for your career!

1. International businesses prefer to hire people who can speak more than one
language. China has become a huge market, and business leaders are
looking for the people who can speak Chinese and operate successfully in a
Chinese cultural.
2. Knowing Chinese may give you an edge when you are competing for an
important position.
3. China will play a major role in world affairs in the future. As China now has
opened up to west, there are opportunities for employment in all the areas.
History of Chinese(Mandarin) Language

China has always been a land of many languages and dialects because of its
geographic size. During the latter part of the Ming Dynasty (1368 1644), Mandarin
emerged as the language of ruling class.
The Capital of China switched from Nanjing to Beijing in the latter part of the Ming
Dynasty. Beijing was remained as the capital of China during the Qing Dynasty (1644
1912). Since Mandarin is based on the Beijing dialect, naturally it became the
official language of the court.
However, the large entry of officials from various parts of China meant that many
dialects continued to be spoken at the Chinese court. It was not until 1909 that
Mandarin became the national language (gu y) of China.
The Republic of China maintained Mandarin as the official language, when the
Qing Dynasty fell in 1912. It was renamed as p tng hu (common speech) in 1955,
but Taiwan continues to use the name gu y (national language).
Study Chinese(Mandarin) Language

Mandarin is the official language of the People's Republic of China and Taiwan,
one of four official languages of Singapore, and one of six official languages of the
United Nations
Mandarin is considered by many to be a language that is difficult to learn, mainly

because its grammar operates along very different principles compared to European
languages.
For example, there are no tenses, plurals, or subject-verb agreement, but it includes
counter words,reduplication rules, and verb completion/direct suffixes.
Mandarin is one of the few languages in the world that does not use an alphabet
or a syllabary; instead, thousands of characters are used, each representing a word
or a part of a word. The government of China has developed a system of writing
Chinese in theRoman alphabet, known as Hanyu Pinyin (spelling according to
sounds). Hanyu Pinyin is used to write out Chinese names in English (for example,
Beijing", "Shanghai", etc.) and helps learners of Chinese with their pronunciation.
Characters
There are two character sets:
i.
Simplified Chinese characters and
ii.
Traditional Chinese characters
Traditional Chinese was the writing used in much of Chinese history, and
continues to be used in Hong Kong, Macau, Republic of China (Taiwan) and among
overseas Chinese.
Simplified Chinese was the result of reforms carried out in Mainland China and
is now used in Mainland China and Singapore.
There are some large differences between these two character systems, so
most native Chinese speakers are able to write in only one of the two systems,
though they can usually read both. However, it's much easier for people who learn
Traditional Chinese to read both sets than people who learn simplified Chinese only,
as simplified Chinese doesn't make sense in some contexts.
The Numbers One to Ten

y (one)
r (two)
sn (three)
s (four)
w (five)
li (six)
q (seven)
b (eight)
ji (nine)
sh (ten)
Examples
yuhoshlbi ma?
Is October 5th a Monday?
T de shngrshyuho.
His birthday is September 8th.
W de dinhuhomsh.
My phone number is 234-9876.
Alphabets
Mandarin language consists of around 6000 characters as compared to 26 in
English. So it is very difficult and complex to learn it for the beginners. It also takes
much more time to study for the people outside China.
The Chinese writing system is the hardest part of learning Mandarin. You must
learn about 2,000 Chinese characters to read a newspaper.
Lesson
It includes lesson to learn mandarin. Lesson consists of five parts:
i.
Dialogue
ii.
Vocabulary
iii.
Grammar
iv.
Examples
v.
Exercises
Dialogue
Below is a dialogue between two people meeting each other for the first time.
Simplified Characters Traditional Characters

: :
: :
: :
: :
English
Ginny: Hello.
Owen: Hello.
Ginny: I'm Ginny. What's your name?
Owen: I'm Owen.
Vocabulary used in speech
Simplified (traditional in
English
parentheses)
Hello
I , me
()
What
to be (am/is/are)
Name
Grammar
The sentence structure of Chinese is very similar to that of English in that they
both follow the pattern of Subject-Verb-Object (SVO). Unlike many languages, verbs
in Chinese aren't conjugated and noun and adjective endings don't change. They are
never affected by things such as time or person.
S+V+O
Sentences using sh[]

Sh, the equational verb to be, can be used as the English is or equals. Sh
can only be used to equate combinations of nouns, noun phrases, and pronouns. In
Chinese, sh, the "to be" verb, is not used with adjectives, as it is in English, as in,
"He is cold."
S + + O
e.g. 1
TshJnn.
She is Ginny.
e.g.2
TmenshYnggurn.
They are English.
Sh is negated when preceded by b []. B is normally 4th tone, but
changes to a 2nd
tone when it precedes another 4th tone.
S + + + O
e.g.
WbshMigurn.
I am not American.
Difference between English and Chinese (Mandarin)

English and Chinese have many significant differences. This makes learning English
a serious challenge for Chinese native speakers.
Alphabet: Chinese does not have an alphabet but uses a logographic system for its
written language. In logographic systems symbols represent the words themselves words are not made up of various letters as in alphabetic systems. Because of this
fundamental difference, Chinese learners may have great difficulty reading English
texts and spelling words correctly.
Phonology: Most aspects of the English phonological system cause difficulties for
Chinese learners. Some English phonemes do not exist in Chinese; stress and
intonation patterns are different. Unlike English, Chinese is a tone language. This
means that it uses the pitch (highness or lowness) of a phoneme sound to distinguish
word meaning. In English, changes in pitch are used to emphasize or express
emotion, not to give a different word meaning to the sound.
English has more vowel sounds than Chinese, resulting in the faulty pronunciation of
words like ship/sheep, it/eat, full/fool. Dipthongs such as in weigh, now or deer are
often shortened to a single sound.
Chinese learners find it difficult to hear the difference between l and r, and so may
mispronounce rake and rice as lake and lice. Southern Chinese speakers have a
similiar difficulty in distinguishing l and n.
A major problem is with the common final consonant in English. This feature is much
less frequent in Chinese and results in learners either failing to produce the
consonant or adding an extra vowel at the end of the word. For example, hill may be
pronounced as if without the double ll but with a drawn out i, or as rhyming with killer.
The difficulties of pronouncing individual English words, compounded by problems
with intonation, result in the heavily accented English of many Chinese learners. In
some cases, even learners with perfect grammar may be very hard to understand.
Grammar - Verb/Tense: In English much information is carried by the use of
auxiliaries and by verb inflections: is/are/were, eat/eats/ate/eaten, etc. Chinese, on
the other hand, is an uninflected language and conveys meaning through word order,
adverbials or shared understanding of the context. The concept of time in Chinese is
not handled through the use of different tenses and verb forms, as it is in English. For
all these reasons it is not surprising that Chinese learners have trouble with the
complexities of the English verb system.
Here are some typical verb/tense mistakes:
What do you do? (i.e. What are you doing?) (wrong tense)
I will call you as soon as I will get there. (wrong tense)
She has got married last Saturday. (wrong tense)
She good teacher. (missing copula)
How much you pay for your car? (missing auxiliary)
I wish I am rich. (indicative instead of subjunctive)
English commonly expresses shades of meaning with modal verbs. Think for
example of the increasing degree of politeness of the following instructions:
Open the window, please.
Could you open the window, please?
Would you mind opening the window, please?
Since Chinese modals do not convey such a wide range of meaning, Chinese
learners may fail to use English modals sufficiently. This can result in them seeming
peremptory when making requests, suggestions, etc.
Grammar - Other: Chinese does not have articles, so difficulties with their correct
use in English are very common.
There are various differences in word order between Chinese and English. In
Chinese, for example, questions are conveyed by intonation; the subject and verb
are not inverted as in English. Nouns cannot be post-modified as in English; and
adverbials usually precede verbs, unlike in English which has complex rules
governing the position of such sentence elements. Interference from Chinese, then,
leads to the following typical problems:
When you are going home?
English is a very hard to learn language.
Next week I will return to China. (More usual English: I will return to China next
week.)
Vocabulary: English has a number of short verbs that very commonly combine with
particles (adverbs or prepositions) to form what are known as phrasal verbs; for
example: take on, give in, make do with, look up to. This kind of lexical feature does
not exist in Chinese. Chinese learners, therefore, may experience serious difficulty in
comprehending texts containing such verbs and avoid attempting to use them
themselves.
Can Chinese Replace English as the Global

Language?
Mandarin language is very difficult and complex to study because it consists of
around 6000 characters as compared to 26 in English. It also takes much more time
to study for the people outside China. From our study, we have founded that for
speaking and pronunciation of mandarin language, it is necessary to pay attention to
the tones and recommended to read the text aloud. To learn mandarin language, it is
recommended to practice writing a lot, look for radicals (components of Chinese
characters) and buy beginners dictionary to learn new words of mandarin language.
It cannot be denied that till date Chinese is the most widely spoken language in
the world. But that is because of the huge Chinese population, within and outside
China. It seems quite improbable that the most widely spoken language in the world
will also become the most popular.
BIBLIOGRAPHY
http://mandarin.about.com
http://en/wikibooks.org/wiki/chinese_(Mandarin)
http://www/myways.co.uk/prog/chinafaq.php
http://wikipedia.org
A
ON
China's Toy
Industry
Submitted to
REQUIREMENT OF THE AWARD FOR THE DEGREE
OF
In
Faculty Guide
Dr. Kunjal Sinha
(Asst. Professor)
Submitted by
1.) BUDDHADEV CHINTAN
2.) PATEL GAURAV
3.) PATEL VIPUL
4.) PATEL RAKESH
5.) PANDYA DHAVAL
6.) PADHIAR MINAL
107050592031
107050592032
107050592033
107050592034
107050592035
107050592036
M.B.A. SEMESTER IV (2010-12)

C K Shah Vijapurwala institute of Management
M.B.A PROGRAMME
Ahmadabad
April, 2012
ECONOMIC OVERVIEW OF CHINA

Since the initiation of economic reforms in 1979, China has become one of the
worlds fastest-growing economies. Many economists speculate that China could
become the worlds largest economy at some point in the near future. Trade
continues to play a major role in Chinas blooming economy. China is now the worlds
third-largest trading economy after the United States and Germany. Over half of
Chinas trade is accounted for by foreign invested firms in China. Chinas economic
growth presents huge opportunities for U.S. exporters. On the other hand, the rush in
Chinese exports to the United States has put competitive pressures on many U.S.
industries. Many U.S. policymakers have argued that greater efforts should be made
to pressure China to fully implement its WTO commitments and change various
economic policies deemed harmful to U.S. economic interests, such as its currency
policy and its use of subsidies to support its state owned firms.
OVERVIEW OF DIFFERENT INDUSTRIES TRADE AND COMMERCE

IN THE CHINA
The annual growth of the any country dependent on the growth of different
industries exists in their country. Here some of the industries trade and commerce
which is useful for the growth in the China.
Electronic information industry
Chinas electronic information industry has grown three times faster than
the national GDP growth rate and has grown faster than the machinery
manufacturing and metallurgy industries. Chinas electronic information industry is
worlds third biggest industry. In 2005, total sales in the electronic information
industry increased by 28.4% from 2004 to approximately US$ 475 billion. Chinas
consumer electronics devices market, defined to include computing devices, mobile
handsets and video, audio and gaming products, is estimated to be worth about US$
180.2bn in 2011, and this is anticipated to increase to US$263.0bn by 2015.
Automotive Industry
The automotive industry in the China has been the largest in the world
measured by automobile unit production since 2008. In 2009, China produced 13.79
million automobiles, of which 8 million were passenger cars and 3.41 million were
commercial vehicles. Of the automobiles produced, 44.3% were local brands
(including BYD, Lifan, Chang'an (Chana), Geely, Chery, Hafei, Jianghuai (JAC),
Great Wall and Roewe), and the rest were produced by joint ventures with foreign car
makers such as Volkswagen, Mitsubishi, General Motors, Hyundai, Nissan, Honda,
Toyota etc. In 2009, China surpassed the United States as the world's largest
automobile producer by volume. The number of registered cars, buses, vans, and
trucks on the road in China reached 62 million in 2009, and is expected to exceed
200 million by 2020.
Telecommunication industry
China owns the worlds largest fixed-line and mobile network in terms of
both network capacity and number of subscribers. The telecommunications industry
in China is subjected by three state-run businesses: China Telecom, China Unicom
and China Mobile. The three companies were formed by a recent uprising and
restructuring launched in May 2008. As of March 2012, there were a total of 284.3
million fixed-line telephone subscribers and 1.01 billion mobile phone subscribers in
China.
Toy industry
China, the world's largest toy maker, takes up about 70 percent of the
global market share and accounts for about 80 percent of Europe's imports of
toys.China's toys now constitute 75% of world output, according to the China
Chamber of Commerce for Import and Export of Light Industrial Products and ArtsCrafts. China is now the world's largest toymaker and exporter. According to the
China Toy Association, there are more than 9000 toy manufacturers in China,
producing more than 30,000 kinds of toys. In the past ten years, China's toy industry
enjoyed significant growth rates and the number of toy manufacturers has increased
dramatically. With more than 9,000 plants, the toy industry is now one of the
country's major industries employing almost 3 million people. China is the world's
largest toy manufacturer, producing 75 percent of the world's toys and exporting toys
to more than 100 countries and regions.
OVERVIEW OF ECONOMIC SECTORS IN THE CHINA

The role of different economic sectors play very vital role for rapid growth of
the China. The different economic sectors like primary sector, industry sector and
service sector play dominant role for develop the Chinas economy.
Primary / Agriculture sector :

For over 4,000 years, China has been a nation of farmers. In 2008, Chinese
food crops planting areas covered 106.70 million hectares, 1.06 million hectares
more than 2007. In 2007, agriculture sector provide 41% employment of total
employment. In 2008 it provide 40% employment of total employment.
Industry sector :
Chinas industry sectors are growing at unique proportions. 2010, Chinas
industrial production growth rate was 8.1 percent. In 2010, 48.6 percent of GDP
came from industry. Chinas industries sectors include: mining and ore processing,
iron, steel, aluminum, and other metals and coal, Textiles, Petroleum, Cement,
Chemicals, Fertilizers, Consumer products,
including Footwear, Toys, and
Electronics, Food processing.

Service Sector :
In its Tenth Five-Year Plan, 200105, the Government announced plans to
develop the services sector and substantially expand its presence in the national
economy. Chinas service sector part in GDP of the China is continuously increase
from last 20 years. In 2010, service sector part in Chinas GDP is 40.5%.
TRADE RELATIONS OF DIFFERENT PRODUCTS BETWEEN INDIA

AND CHINA
India considers China its largest trading partner. It is important to note that
China and India export and Import from every one others place in a huge manner.
List of Imports by India from China
Electrical Machinery, Machinery, Plastic, Organic Chemicals and Inorganic
Chemicals, Iron And Steel, Iron/Steel Products, Rare Earth Metals, Fertilizers,
Impregnated Text Fabrics, Manmade Filament, Fabric, Silk Yarn, Fabric, Vehicles,
Mineral Fuel, Oil, Aluminum etc.
List of Imports by China from India
Machinery, Ores, Slag, Ash, Iron And Steel, Metals, Organic Chemicals
Salt, Sulphur; Earth, Stone, Inorganic Chemicals, Rare Earth Metals, Cotton and
Yarn, Fabric, Copper, Electrical Machinery, Hides And Skins, Artificial Flowers, Dye,
Paint, Putty, Precious Stones, Fish And Seafood.
PESTEL ANALYSIS OF THE CHINA

PESTEL analysis is a tool or a framework used by certain individual to analyze
different macro-environmental factors where these factors may affect their business
plan or also the stability of a nation. PESTEL stands for 6 different factors that are
known as Political factors, Economy factors, Social Factors, Technological factors,
Environmental factors and also Legal factors.
1) Political Factors
i. Stability of Government
ii. Constitutional System
iii. Business Freedom
iv. Trade Freedom
v. Tax Policies
2) Economic Factors
i. Disposable income of buyers
ii. Credit accessibility
iii. Unemployment rates

iv. Fiscal Freedom
v. Monitory Freedom
vi. Investment Freedom
vii. Financial Freedom
viii. Interest rates
ix. Inflation
3) Economic Factors
i.
Population growth rate
ii.
Population Below Poverty Line
iii. Infant mortality rate

iv. Total fertility rate
v.
Ethnic group
vi. Nationality
vii. Religions
viii. Distribution of wealth
ix. Changes in lifestyle and Trends
x.
Educational Levels
xi. Labor Freedom Ranks

xii. Freedom of Corruption
xiii. Property Rights
4) Technological Factors
i.
Science and Technology
ii.
Research and Development
5) Environmental Factors
i.
Environmental Protection Laws
ii.
Current issues
6) Legal Factors
i.
Employment Regulations
ii.
Health and Safety Regulations
iii. Trade and Regulations Standards
INTRODUCTION OF THE TOY INDUSTRY

The Chinese toy industry, the largest in the world, generates billions of
dollars in export profits and employs millions of people in thousands of factories.
china's toys and games market is growing at a yearly growth rate of 40% and will
increase from US$ 3.2 billion 2004 which just equals 6% of the USA Market to over $
20 billion 2010. The fastest expanding sectors are the educational and electronic
toys.
In 2010, the global toy sales achieved USD83.3 billion, wherein, the Asian toy
market climbed to the worlds second largest toy market with the strong growth of 9.2% on
average. Meanwhile, influenced by fluctuations in the exchange rate, the European market
dropped to the third place.
.
The average spending of every Chinese child on toys is no more than $ 7 per year,
compared with $412 in Japan and $40 worldwide in average.
China is the largest manufacturer of toy products worldwide, manufacturing

over 70% of the world's total. This industry also contributes significantly to
employment levels in China with a forecast 7,397 enterprises operating almost
12,700 establishments, and employing over 645,000 people in 2011. Although China
is the world's largest exporter of toy products, most export business is providing OEM
(original equipment manufacturer) services to foreign clients, and more than half of
these have export licenses.
China is the worlds largest toy manufacturer and exporter, and over 2/3 of global
toys are made in China. The export value of Chinese toys in 2009 reached US$7.8 billion.
Guangdong, Jiangsu, Zhejiang, Shanghai, and Shandong are the foremost production and
export bases of toys in China, accounting for more than 90% of the annual sales of Chinese
toys, of which, Guangdong gives priority to electric toys and plastic toys; Jiangsu and
Shanghai are mainly engaged in plush toys; Zhejiang gives first place to wooden toys.
The sectors of educational and electronic toys, which are now relatively
small but increase nearly 100% every year, are the highlights of this exciting market.
The Chinese culture considers that the toys should contribute to intelligence
development rather than simply entertain people. Therefore, the Chinese parents are
willing to pay much more for a toy with educational function than a beautiful doll.
China is now the world's largest toymaker and exporter. According to the
China Toy Association, there are more than 9000 toy manufacturers in China,
producing more than 30,000 kinds of toys.
China itself is a large toy market. There are more than 300 million children
under 14 in the country, a quarter of who live in cities. Industry insiders predict
China's toy market will grow 40% annually.
BUSINESS ACTIVITIES OF TOY INDUSTRY

1.
Survey and collection of information on toy export and toy industry both at home
and abroad.
2.
Review, establishment and advancement of policies concerning the promotion of

toy exports.
3.
Review,
establishment
and
advancement
of
policies
concerning
comprehensive promotion of toy industry.

4.
Reporting to the Diet and government, etc. on the item 2 mentioned above.
5.
Publicity on toys at home and abroad.
the
COMPARATIVE
POSITION
OF
TOY
INDUSTRY
OF
CHINA'S
PRODUCT WITH INDIA

India:
Mattel, Lego and Funskool are three of the major players in the Indian toy
industry. The toys and games available in India are a mix of both fun toys and
educational tools. They include dolls, puzzles, electronicgames, handmade toys, soft
toys, board games, computer games etc. Indian wooden toys are of good quality and
comparable to international standards. According to data, toys worth more than $24
million (or Rs 120 crore) were imported in April-June 2008-09 and over 70 per cent of
all toys sold in India come from China.
China:
Chinese toy industry benefiting from economies of scale and cheap labor, it
had come to dominate the global market, accounting for about 75% of the worlds
output. As a result unbranded, cheap toy products started flooding Indian toy market.
Many do not print the addresses of manufacturers/importers, the maximum retail
price (MRP) or manufactured date. The inexpensive Chinese toys have replaced the
branded Indian toys. It has been estimated that almost 80% of the toy market has
been taken over by the Chinese products.
SOURCES OF CHINAS PRICE COMPETITIVENESS:
Low wages
Counterfeiting and piracy
Minimal worker health & safety regulations
Negligent environmental regulations & enforcement
Export industry subsidies
A highly efficient industrial network clustering
The catalytic role of Foreign Direct Investment (FDI)
Superior infrastructure - both general and specific to toy sector
Large scale operations
An undervalued currency
TEN REASONS WHY CHINA IS CHEAPER?

1. Strategy
2. Commitment
3. Saving
4. Rural-Uraban Migration
5. Consumption
6. Services
7. Foreign Direct Investment
8. Education
9. Innovation
Comparison of Indian & Chinese Toy Industries:
Particulars
INDIA
CHINA
Factories
1500
9000
Turnover
USD 1.4 Billion
USD 10.08 billion
20 to 30 %
29.4% on average
8 th
2 nd
Annual growth rate

Ranking
Indias
Export to
Indias
Import From
Export to
China (as %
Import
China (as % To
China
To total)
From China
total)
2003-04 259
0.63
11,715
51.23
2004-05 152
0.33
16,426
55.23
2005-06 138
0.24
27,287
53.97
2006-07 316
0.55
43,402
60.99
2007-08 232
0.43
45,081
64.25
Year
Indias Trade with China in Toys Sector:
PRESENT POSITION AND TREND OF TOY INDUSTRY IN INDIA

Indian Toy Industry:
Currently there are about 800 Indian games and toy manufacturers, exporters
and suppliers in the small sector of India, with a turnover nearly $2.5 billion. This
includes manufacturers of electronic toys, soft toys, educational games, toy cars,
rattles, dolls, plush toys, computer games, brain teasers, children puzzles etc. The
total toys and games market in India stands at around Rs.2500 crores, of which
Rs.250 crores is in Chennai.
Total Market Size : Rs.2500 crores
Market Structure : Organized Sector- 35% (> 1500 units)

Unorganised Sector- 65%
Duties and Taxes : Excise Duty: 12.5%

Central Sales Tax: 4%
Global Export Contribution : 0.4%
Governing Body :Toys Association of India (TAI)
They are predominantly in Micro, Small and Medium segment, Few units in
the large segment.
Indian manufacturers fulfill about 50% of the domestic demand. Annual growth
rate in demand 20 to 30 %.
PROBLEMS OF TOY INDUSTRY IN INDIA:

Major constraints faced by Toy manufacturing units are enlisted as follows:
New Expansion plans are constrained by space limitations within the city
limits.
Further, taxes such as Income tax/VAT/Excise/octroi should not be levied on

the toy.
Major threat- CHINA-has entered in the Indian toy market of Electronic,

Mechanical, Plastic toys through unorganized sector Wholesaler and
Importers, under invoicing creates a problem for Indian Manufacturers and
Indian Toys.
Media awareness of toys is lacking- awareness with respect to Quality and

safety aspect of Toys need to be inculcated among children and parents.
Finance for the toy manufacturing unit need to be more liberal.
Industry has suffered due to cheap products and inferior quality.
China toy industry has an edge over Indian counterparts due to economies of
scale.
Older traditional systems of production are being followed by the Indian

manufacturers.
Under Invoicing of imported product is a problem. Therefore, every tax gets

reduced.
Weights and measures create problem for Indian toys but dont question
Chinese toys for any labeling.
Product Design Centre- Involvement of marketing agency for discussing the

viability of products is a requirement and a suitable technique for feedback.
The Associations need to play active role by passing on the information to the
members.
Regulations and standards on the part of government need to be established

and implemented.
Random checking of the samples by the custom department need to be

undertaken.
Only accredited laboratory should be used for testing.
Upgradation of technologies is a must.
GENERAL PROVISIONS REGARDING IMPORTS OF INDIA

Import Policy ITC (HS)
In 1996, the Govt. introduced the Indian Trade Classification (Harmonized
System) or ITC (HS). Under the system all the goods were classified in eight or ten
digits. This system continues till today at the 8 digit level, which has also been
adopted by Customs and Excise.
The document ITC (HS) covers 21 Sections 99 Chapters (2-digit level). Each
Chapter has Headings, Sub-headings and Sub-sub-headings. The first two digits
indicate the Chapter, the next two the tariff Heading, the next two tariff sub-heading
and the last two tariff sub-sub-heading. These entries total to 10700. There are about
1575 entries at the ten-digit level.
Under ITC (HS), against each entry, it is indicated as to whether the item is freely
importable, permitted for imports only through State Trading Enterprises (STEs),
restricted through an import license or prohibited. Any conditions for import are also
indicated against the particular entry. Under this system, the importer has to locate
his item in the ITC (HS) and find out whether an item is freely importable or subject to
licensing or some conditions. This system continues even today.
The ITC (HS) has certain General Notes at the beginning. These Notes cover,
imports that do not involve any foreign exchange, import of free gifts and imports of
beef, edible oils and processed food products, packaged products, goods subject to
quality standards, meat and poultry products, primary agricultural products, textile
and textile articles etc. Imports of these items are subject to certain additional
conditions.
POTENTIAL FOR IMPORT/EXPORT FOR INDIAN MARKET IN TOY

INDUSTRY
1. Though there is significantly less opportunity of trade relations in china and
India, import is significantly high in the toy sector in India compared to export.
2. Though trade can be enhanced through the increasingly lowering the
protectionism in the Chinese sector.
3. Import has significantly increased in India from china but vice versa is not
possible.
4. Thus proper steps should be taken in order to enhance the trade between
both the countries and not a one sided flow of trade should be focused.
5. Trade between the two countries should be enhanced through better
exchange of the toys in the traditional markets.
6. Traditional toys should be better exchanged between the two countries.
7. India should export better quality raw materials to the Chinese market and in
turn can receive lower priced toys on an larger scale thus profits can be
divided between the two countries.
A
Global Country Study Report
ON
"PESTLE Study of China's Plastic Industry"
Submitted to

Under

Submitted by

KERAV PANDYA
Vrushank Gandhi-107050592037
Ronak Shah- 107050592038
Nishan Kapadiya- 107050592039
Mansi Shah- 107050592040
Rikita Patel- 107050592041
Nisarg Shah- 107050592042
M.B.A - SEMESTER IV
M.B.A PROGRAMME
Affiliated to Gujarat Technological University, Ahmedabad
SUMMARY
In the era of fierce globalization where two giants, viz. India and China- the emerging
Asian and World economy, are on the edge of nasty competition; we have selected the
Chinese Plastic Industry for the purpose of Political, Economical, Social, Technological,
Legal and Environmental i.e. PESTLE analysis.
Here, the China as an emerging economy has much potentials as compare to India. the
objective behind the study is to understand the factors behind the massive growth of
Chinese Plastic Industry over the Indian industries.
A plastics industry in China has been consistently growing with double-digit growth rates
since 1996. Currently, China consumes 48.5 pounds of plastic commodity per capita,
compared to the world averages 55 pounds. Early this year, China has reached $53.4
billion worth of plastic production. $12.8 billion of them are exported while imports
account for $7.1 billion worth of plastic products from overseas. The key markets that
deal with china include United States, European Union, ASEAN counties and Japan.
Most of the economists consider China as the next super power just because of its
defensive strategic policies for the domestic industries. The Chinese government has
been in focus since last couple of decades due to its communist political party that
frames a solid structural policy to protect its infant and developed industries and
companies.
Most of China's financial institutions are state owned and governed and 98% of banking
assets are state owned. From the 1950s to the 1980s, the government's revenues
resulted chiefly from the earnings of the state owned enterprises. Some government
earnings also received by mean of taxes, of which the major part was the general
industrial and commercial tax.
The movement, however, has been for remitted profits of the state enterprises to be
returned with taxes on those profits. In the beginning, this tax system was used to so as
to allow for distinctions in the capitalization and pricing situations of various firms. But
after introducing more-uniform tax schedules in the early 1990s, In addition to, personal
income and value-added taxes the government started earning handsomely.
The principal focus of growth in the chemical industry is to develop the output of
chemical fertilizers, plastics, and synthetic fibers. The escalation of this manufacturing
has placed China among the world's top-most producers of nitrogenous fertilizers. In
the FMCG sector the focus is on textiles and clothing, which too forms an important part
of China's global sell. Plastic Industry of China is expected to grow at a rate of 10% to
15% for the next five years, at least.
Now it's a time for the Indian government to frame such a policy that dumps Chinese
products and influence the Indian products at the same time quality and price has to be
taken into contemplation.
PESTLE analysis of Chinese Plastic Industry: An over view:
India and China- Difference in Politics and Fighting to show off
Chinese government has always been playing an aggressive role in the world politics
and tries to mark their feet on the global map. It's been a long time ago the slogan
"Hindi Chini Bhai Bhai" was on everyone's word of mouth.
But since last couple of decades or so, the Chinese government proves that they're
merely concerned for their vital part of politics and hence they're playing without
democracy. Here are certain cases and incidents that will narrate the showing off cards
of China.
India often looks at China with a weird blend of envy and superiority. It is desirous in
particular of China's amazing infrastructure. Its thousands of miles of silky, paved
highways. Its fast trains and modern airports, high-rise buildings and shopping malls. It
is also in awe of China's booming export-driven manufacturing sector and the fact that
China continues to depict more foreign investment than India. But Indians always
soothe themselves -and remind those who compare India unfavorably to China - that
India has democracy
In an ironic twist, the Chinese government has in jeopardy to file criminal charges
against Indian reports organizations that have been running stories about Chinese
military incursions into India. These border abuses have been a sizzling topic here with
India's fevered, and sometimes jingoistic, media making it seem as though a Chinese
invasion might be imminent and lambasting the government for failing to strengthen the
country's border defenses. The government started the ball rolling in the first consign
when the Army chief nagged to reporters back in August about Chinese cross-border
activity.
Coming in the context of a lot of tough Chinese posturing over Arunachal Pradesh, an
Indian state that China claims is part of its territory, the story became a stir. TV crews
were dispatched to the border and returned with chronicles from villagers of Chinese
troops marching into their settlements and spray painting Chinese characters on rocks.
But now the government is worried that the media hysteria is endangering affairs with
China (India's biggest trading partner). They may also be concerned that, by forcing the
Indian military to make a big show of reinforcing the border, the reporting could set the
stage for the kind of tit-for-tat escalation and misapprehension that would lead to a real
war. So the government has come out with statements claiming that there has, in fact,
been no swelling in Chinese incursions. It says it is mystified by the media excitement.
(Of course, one infers that there is, in actuality, quite a bit of anxiety about China's
intentions, not only along the border, but also out in the Indian Ocean and Arabian Sea,
where it has been building new naval installations.)
Yet the government has also gone a step further, saying it will file criminal complaints
against reporters who ran with an flawed anecdote that two Indian soldiers had been
wounded by Chinese combustion while on patrol along the border in Sikkim. India have
already missed the liberty it states to hold so dear, so what distinction will it make? In
reality, it might be an expansion. After all, the roads really are superior in China than
India1.
So, from the above incidents we can clearly say that Indian government would
like to play safe and clean instead getting into the muddy area
and spoiling image .
www.Business-in-asia.com, comparison of China and India, Last retrieved at April 20, 2012
India and China- Difference in Economy and trying a lot to prove
India has emerged as a business superpower and as an increasing attraction for FDI.
Its role in the international economy to this point has been less remarked than the rise
and dominance of China but increasingly India will be appreciated for the opportunities it
is creating for its citizens, employers and foreign and domestic firms. At first glance,
India doesn't look like a major trading superpower or a place where your company
should be considering sitting a factory. Most important complaints heard by visit execs
often involve the meager state of infrastructure, the disorganized traffic, that the
independent process hampers development that corruption is endemic and that
bureaucracy is rampant. To this, many manufacturers must factor in that relations
between China and India are formal but not warm and that apparently neither side trusts
the other, which to this point has limited either location from generally serving the other
for exports.
To better recognize what India is and what it is not, let's evaluate it to China. First, stop
thinking about both the countries in terms of their hype and progress. Let's begin every
thing from ground zero.
Keep in mind that regardless of all the talk of China or India's mounting status, both
China and India are silent and dreadfully pitiable countries with large disparities in
incomes across each country. In China nearly half of the country's manual labor force
remains in cultivation (about 60% in India). Moreover, in spite of all the talk concerning
Indian software engineers and Nobel laureates and Chinese engineering dasher, India
has the key number of uneducated people in the globe and China also is troubled with a
large number of rural poorly skilled people who will offer continued challenges for
economic improvement. (India's uneducated people out of 100 are 40 and China is
merely 10 percent according to World Bank figures.)
As per the World Bank computations, out of the total of 2.3 billion people in these two
countries, nearly 1.5 billion earn not even US$2 a day. As the prospects in both
countries are extensive; the hurdles are also large.
Now, let's judge against the two biggies by size: China is the world's third- biggest
country after Russia and Canada and is the second largest country by land area. India
is about a third of China, considering the Land area. In expressions of population,
China beats India at 1.3 billion people contrasting to India at just over 1 billion but India
is budding at a faster rate and has a younger population, which has an advantage to
India. In requisites of political systems, China is a communist country which efficiently is
following market reforms that pushes free trade and capitalist-based business
models. Whereas, India is the world's prevalent democracy, that has accepted the
model of combination of private and public partnerships i.e. of Capitalist and Soviet
Economy model. China has been transforming its financial system since 1978; India has
started it since 1991 but at a quicker pace.
Further, in terms of industrialized products China's lead over India is considerable.

After the Superpower and Japan, China the world's third largest nation in terms of
producing industrialized products, and still it looks further to beat both the toppers. India
is a still remarkable, but much poor at a 12th place in the same list according to report
published by Global Insight and the Financial Times.2
www.Business-in-asia.com, comparison of China and India, Last retrieved at April 20, 2012
Table 1: Top 15 Manufactuing Nations

2006
2025
US
China
Japan
US
China
Japan
Germany
Germany
France
South Korea
UK
France
South Korea
India
Italy
UK
Brazil
Italy
10
Canada
10
Brazil
11
Russia
11
Russia
12
India
12
Indonesia
13
Spain
13
Mexico
14
Mexico
14
Taiwan
15
Indonedia
15
Canada
(Source: Global Insight and the Financial Times)
In terms of performance, here are some charts comparing and contrasting the two
economies in terms of first GDP Per Capita PPP, then exports and finally imports:
India GDP per capita PPP

The GDP per capita, adjusted by purchasing power parity, in India was last reported at
3582 US dollars in December of 2010, according to the World Bank.
Previously, the GDP per capita PPP in India stood at 3310 US dollars in December of
2009. The GDP per capita PPP in India is obtained by dividing the country's gross
domestic product, adjusted by purchasing power parity, by the total population.
Historically, from 1980 until 2010, India's average GDP per capita PPP was 1413.43
dollars reaching an historical high of 3582.48 dollars in December of 2010 and a record
low of 415.30 dollars in December of 19803
.
Figure 1: India GDP per capita PPP
http://www.tradingeconomics.com/india/gdp-per-capita-ppp, Last retrieved at April 20, 2012
China GDP per capita PPP
The GDP per capita, adjusted by purchasing power parity, in China was last reported at
7599 US dollars in December of 2010, according to the World Bank.
Previously, the GDP per capita PPP in China stood at 6863 US dollars in December of
2009. The GDP per capita PPP in China is obtained by dividing the country's gross
domestic product, adjusted by purchasing power parity, by the total population.
Historically, from 1980 until 2010, China's average GDP per capita PPP was 2221.51
dollars reaching an historical high of 7598.84 dollars in December of 2010 and a record
low of 249.94 dollars in December of 19804.
Figure 2: China GDP per capita PPP
http://www.tradingeconomics.com/china/China-per-capita-ppp, Last retrieved at April 20, 2012
India's Exports
India's exports were worth USD 24618 Million in February of 2012 which was 22% of
India's GDP. Gems and jewelry constitute the single largest export item, accounting for
16 percent of exports5.
India is also leading exporter of

textile goods
engineering goods
chemicals
leather manufactures and services.
India's main export partners are European Union, United States, United Arab
Emirates and China.
Figure 3: India Exports
http://www.tradingeconomics.com/india/exports, Last retrieved at April 20, 2012
China Exports
China exports were worth USD165.7 Billion in March which constitute 39.7% of its
GDP6.
China major exports are:
office machines & data processing equipment
telecommunications equipment
electrical machinery and apparel & clothing
China's largest exports markets are European Union, United States, Hong Kong,
Japan and South Korea.
http://www.tradingeconomics.com/China/exports, Last retrieved at April 20, 2012
India Imports7
India imports were worth USD 39782 Million in February of 2012. India is poor in oil
resources and is currently heavily dependent on coal and foreign oil imports for its
energy needs.
Other imported products are:
machinery
gems
fertilizers and chemicals.
Main import partners are European Union, Saudi Arabia and United States.
China Imports8
China imports were worth 160.3 Billion USD in March of 2012.

China imports mainly commodities:
iron and steel
oil and mineral fuels
machinery and equipment
plastics
optical and medical equipment
organic chemicals.
China's main imports partners are: Japan, European Union, South Korea, Taiwan and
Asian countries.
China May Have Technological, Economic Edge Over India in 2025,

but Also Demographic Disadvantage9
As India and China continue to grow in status, each nation has certain advantages,
according to a new analysis by RAND (Research ANd Development) Corporation
researchers.
According to the report,China has advantages in science and technology, and

developing its national defense capabilities. But India's more unwrap and bendy
political structure may allow it in making
adjustments to its policies which may
improve its relative performance, perhaps providing it with an advantage over China.
India and China are both nations to watch because of their population size and
tremendous growth. The RAND study assesses the relative attainment and prospects
of China and India through 2025 in four areas:
demography
macroeconomics
science and technology
defense spending and procurement
Researchers say that by understanding the nations' relative standing on the above
four issues will affect the potential cooperation and competition between the two
countries.
China and India are the world's largest populated countries. India's population
growth rate is about twice than that of China's, i.e, India's total population will equal
China's in 2025each will have an estimated 1.4 billion people and is expected to
exceed China's population thereafter.
http://www.rand.org/news
In addition, India's prime working-age population will overtake China's by 2028.

While the Chinese public is aging faster than in India means China's population is
healthier. According to the study, China has better-developed health care system,
higher levels of literacy and education. Both countries have gender imbalances
caused by historical preferences for males, which could generate social pressures
resulting from having populations with significantly more men than women in certain
parts of the two countries.
The growth rate of the GDP from the year 2020 to 2025 is expected to be about the
same5.7 percent in China and 5.6 percent in India. China's current overall GDP is
about three times larger than India's, and by 2025 the difference between their two
GDPs is estimated to be $4.4 trillion annually.
Though China is ahead in the science and technology field, the quality (measured
as employability) of graduate engineers from China is 60 percent lower than those
from India, according to a survey of multinational businesses.
Researchers conclude that prospects for India to enhance its competitive position
with China are better than China's chances to do the same, because India's
political-economic system allows a greater degree of economic autonomy and
provides an environment more conducive to entrepreneurial, innovative and
inventive activity. That suppleness may support India's position in the long-term
competition between the two biggies.
Bibliography
Web Sites:
http://en.wikipedia.org/wiki/List_of_countries_by_population
http://en.wikipedia.org/wiki/Five-Year_Plans_of_the_People%27s_Republic_of_China
http://en.wikipedia.org/wiki/Economy_of_the_People%27s_Republic_of_China
http://en.wikipedia.org/wiki/Economy_of_the_People's_Republic_of_China#External_trade
http://en.wikipedia.org/wiki/Encouraged_Industry_Catalogue
http://en.wikipedia.org/wiki/State-owned
http://en.wikipedia.org/wiki/State_Council_of_China
http://www.asiatradehub.com/china/tax2.asp
http://www.china-britain.org/sistem_china/1_modern.html#government
http://en.wikipedia.org/wiki/Science_and_technology
News papers, Journals and Magazines:

IndiaToday
Business Standard
The Economic Times
Report by CRISIL
Report by Indian Government
e-journals and information by Chinese Business forum
A
GLOBAL PROJECT REPORT
ON
CHINAS BURGEONING TOURISM INDUSTRY

Submitted to
Under
Gujarat Technology University
Ms. Stuti Trivedi
(Asst. Professor)
Submitted by:
LAKHANI CHIRAG
107050592043
MILAN TILVA
107050592044
RAMRAKHYANI VIJAY
107050592045
BALAR ASHVIN
107050592046
BHOJWANI SANDEEP
107050592047
VAGHANI VISHAL
107050592048
M.B.A SEMESTER III/IV

M.B.A PROGRAMME
Ahmadabad
May 2012
Executive Summary
China tourism industry is growing by leaps and bounds and is making a mark in the world
tourism industry. China tourism industry has contributed immensely to the social as well as
the economic development of China. Over the years, China has grown steadily in the travel
and tourism industry and is still enhancing its presence in the global tourism market. As
China has several tourism rich sites, China tourism industry earns the main revenues for the
economic development of China. Maintaining an annual growth rate of 7%, the tourism in
China has already become a new sector of economic growth.
Today, China's population is over 1.3 billion, the biggest of any country in the world.
China's population growth rate is only 0.47%, ranking 156th in the world. Since the
initiation of economic reforms in 1979, China has become one of the worlds fastestgrowing economies. From 1979 to 2005 Chinas real GDP grew at an average
annual rate of 9.6%.
Economic Overview:
The GDP rate of china in 2011 was 9.5% which is less than 1% by previous
Year.
The per capita income of china was 2425(In USD) which is higher than
previous year
The export of the china was187.7 billion (In USD) which is 10 billion more
than previous year.
The import of china was 130 billion (In USD) which is 15 billion less than
previous year. It shows the growth of the country.
The annual growth of the any country dependent on the growth of different industries
exists in their country. Here some of the industries trade and commerce which is
useful for the growth in the China
Electronic information Industry
Automotive industry
Telecommunication Industry
The role of different economic sectors play very vital role for rapid growth of the
China. The different economic sectors like primary sector, industry sector and
service sector play dominant role for develop the Chinas economy.
Primary / Agriculture sector
Industry sector
Service Sector
Overview of business and trade at international level

China emerged as a major player in the global economy over the course of the
1980s and 1990s. After the People's Republic of China (PRC) government adopted
an open door policy in 1978, its export volume rose rapidly, promoting economic
growth and financing the inflow of increased imports. By the mid-1990s China had
become the 10th largest trading country in the world, yet it remained only shallowly
integrated into the global economy. The U.S. Congress finally approved permanent
normal trade relations with Beijing in 2000 and after a total of 15 years of
negotiations; China entered the WTO on 11 December 2001.
TRADE RELATIONS BETWEEN INDIA AND CHINA

India considers China its largest trading partner. The expected joint Indo China trade
is likely to reach US$60 billion by the end of 2009, says, Mr. Shen Wenping, Vice
Director of Jiaxing Municipal Bureau of Foreign Trade and Economic Cooperation
during a very recent Seminar with the Business Delegation from Jiaxing, China,
organised by Confederation of Indian Industry (CII), in New Delhi.
China Trade Relation with Gujarat

On August 26, 2011, Chinese Ambassador to India Zhang Yan paid a two-day visit
to Gujarat, a west state of India. During the visit, Ambassador Zhang met with Mr.
Narendra Modi, Chief Minister of Gujarat, Mayor of Ahmedabad and other
government officials, attended the launch of Gujarat Chapter of India-China
Economic and Cultural Council (ICEC), delivered a speech at the Presentation on
India-China Trade & Investment Opportunities, participated in Green Initiative and
visited the local rural villages.
PESTEL ANALYSIS OF CHINA

China's government is a pyramid shaped structure, at the top of which sits the President,
currently Hu Jintao. The role of the Presidency is essentially to provide vision - to set the
general course for the country as a whole. China economy is characterized by its
extraordinary size and growth. The GDP has grown steadily since 2003 peaking at 11% year-
on-year growth in 2007. China has the largest population in the world, 1.3 billion people
increasing of about 7.8 million people every year Research based on forecast data from the
Department of Economic and Social Affairs of the United Nations Secretariat shows that the
number of people with age between 20 and 39, which represent the target customers.
Based on civil law system; derived from Soviet and continental civil code legal principles;
legislature retains power to interpret statutes; constitution ambiguous on judicial review of
legislation; has not accepted compulsory ICJ jurisdiction.
Current Status of Tourism Market

Maintaining an annual growth rate of 7%, the tourism in China has already become a new
sector of economic growth. It has promoted the development of related industries, society
and economy and has already become one of Chinas pillar industries. Tourism industry in
China consist mainly of hotel industry, catering, transportation, travel agencies and tourist
attractions management industries, among which hotel industry, travel agencies and
transportation are the three pillars of the tourism industry. Tourism promotes the economic
growth, helps to develop relevant industries in tourist cities, offers working opportunities,
improves the social, cultural and ecological environment, increases the interregional
communication and interactions, and enhances the quality of the population.
During the 2011 China Tourism Trade Fair, Shao Qiwei, Director of the National
Tourism Administration said that the domestic tourism is one important feature of
economic and social prosperity. During the Eleventh Five-Year period, the average
annual number of domestic tourists reached 21 million, increased by 11.7%,
domestic tourism revenue was 1.26 trillion yuan, with an annual growth rate of
18.9%. At present Chinas tourism market is on the way to becoming the worlds
largest one
MARKET PROSPECT OF CHINAS TOURISM

According to 2011 Chinas Tourism Market Trends Observation and Forecast, by 2020 China
will become the worlds largest tourist destination country. This decade will be the golden
years for the development of Chinas tourism industry. By 2015, Chinas tourism industry
will account for 8% of the GDP, and the percentile in 2020 will be 11%. As Chinas tourism
industry continues to maintain a rapid growth, tourism will become an important sector in
Chinas national economy. By 2020, the national tourism value added is expected to account
for more than 12% of value added in the service industry.
INBOUND TOURISM OF CHINA

The inbound tourism of China underwent a rapid growth in 2011. Culture is the soul
of travel. China, an ancient oriental giant with a history of over 5000 years bears a
special cultural magnetism for worldwide tourists. The Beijing Olympics in 2008, the
Expo Shanghai 2010 and other international events further promoted the popularity
of China. To the end of September 2011, the country saw a 1% growth in the
number of foreign tourist arrivals, which is lower than that of 2010 but totals an
amazing 100 million including 42 million that stayed overnight. The foreign exchange
revenue of tourism reaches 35 billion dollars, up 2% over the same period of the last
year
Overseas Tourist Markets
Foreign Market Influenced by various factors, the number of foreign tourist arrivals
was only 21.9375 million, down 9.8% from the preceding year. The market share of
Asian tourists took up 62.8% of the total foreign visitors, increasing 2.9% on the
previous year. Among the Asian countries, Japan was the largest tourist source
country to China. However, the total number of the arrivals from these Asian
countries declined 5.4% compared to that of the last year.
Reception of Overseas Tourists and Tourism Revenue Derived from Major Cities
A total of 42 cities in China received more than 200 thousand oversea tourists, a
rise of 5 than 2008, including Shenzhen, Guangzhou, Shanghai, Beijing, Zhuhai,
Hangzhou, Suzhou, Tianjin, Guilin, Nanjing, Dalian, Chongqing, Qingdao, Xiamen,
Huangshan, Ningbo, Kunming, Xian, Wuhan, Wuxi, Fuzhou, Quanzhou, Chengdu,
Changsha, Shenyang, Zhongshan, Yantai, Luoyang, Wenzhou, Weihai, Zhengzhou,
Sanya, Yanbian, Nantong, Harbin, Taiyuan, Qinhuangdao, Jiujiang, Zhangzhou,
Changchun,
Chengde
and
Hefei
OUTBOUND TOURISM OF CHINA

With the rise of personal incomes and living standards, the outbound tourism of
China grows by leaps and bounds. Chinese people are eager to go sightseeing
overseas which creates an immense market for some nearby countries. The popular
outbound destinations include USA, Russia, France, Australia, Japan, Korea,
Malaysia, Singapore, Thailand and Maldives, etc. In 2011, the number of outbound
tourists totals 51 million, up over 20% comparing with 2010. At present, China has
increased the number of permitted overseas destinations for her citizens to 140
countries and regions. A further and sustained growth of outbound tourism is
expected.
Chinese Tourists Visiting Overseas
The number of Chinese people who traveled overseas as a group organized by

travel services was 12.3468 million, up 13.2%. Of them, 6.8529 million went to
foreign countries through the arrangements of travel services, up 13.5%; 5.1958
million traveled Hong Kong and Macau, up 6.6%. Additionally, 298,200 people
toured frontier areas, arranged by travel services, down 30.5%. Another 9 foreign
countries were newly added to Chinese peoples tourist destinations, which were
Republic of Cape Verde, Guyana, Republic of Montenegro, Republic of Ghana,
Ecuador, Dominic, United Arab Emirates, Papua New Guinea as well as Republic of
Mali.
There were 18.6659 million China mainland residents visited Hong Kong, increased
6.3% than 2008. The number of China mainland residents traveled Macau was
15.1276 million, decreased 2.5%. 980.570 Chinese made a tour to Taiwan,
increased 253.4%.
Domestic Tourism
China, a county with an amazing population of over 1.3 billion, has an incomparably
large domestic tourism market. In the recent decade, domestic tourism had a
continuous increase of around 10% each year, which now contributes over 4% to the
growth of the countrys GDP and greatly enhances the employment, consumption
and the economic development of China. The most popular destinations for Chinese
tourists include Beijing, Shanghai, Xian, Guilin, Hangzhou, Sanya, Lhasa, Chengdu,
Lijiang, Hong Kong, Macau etc. The tourist volume rockets to an amazing number
during the peak seasons especially the two golden weeks (the National Day Holiday
from Oct. 1 to 7 and the Spring Festival), which can be the cause of problems with
traffic and tourist service quality. When you plan a visit to China you should avoid
these rush periods.
China opens tourism market to outside world
According to China's commitment to the World Trade Organization (WTO), the
country must open its tourism market to wholly foreign-funded tourist companies
before December 31, 2005. The establishment of JALPAKICC comes two years
ahead of the schedule. Foreign tourist agencies started business in China in 1998,
mainly in the form of joint venture. As of today, Sino-foreign joint venture tourist
companies in China total 11. Now that China has opened its tourism market so early,
many foreign tourist agencies are primed to invest in this nascent market.
Statistics from the CNTA show that 91.66 million people from abroad visited China in
2003, generating about $17.4 billion in revenue. One day before the establishment of
the JALPAKICC, China Travel Service (CTS) Head Office and European tourism
giant TUI announced the establishment of their joint-venture tourist company TUI
China Travel Co. Ltd. (TUI China) in Beijing.
TOURIST RESOURCES IN CHINA

1 Natural Sites-China's mountains, lakes, valleys, caves and waterfalls
2 Historical and Cultural Sites
3 Folk Customs
FAMOUS TRAVEL AGENCY IN CHINA

(1) China Travel Service Head Office Co. Ltd.
(2) CYTS Tours Holding Co., Ltd.
(3) China Comfort Travel Co. Ltd
CHINAS TOURISM INDUSTRY SOUNDLY GROWING IN 2011
In 2011, the number of domestic tourists was about 1.13 billion, with an increase of
13%; the revenue of domestic tourism was about CNY 920 billion, with an increase
of 22%; the number of border tourists was 66.27 million, with an increase of 1%.
In the next decade, Chinas tourism industry will maintain an average annual growth
rate of 10.4% , of which individual tourism consumption will increase at an average
annual growth rate of 9.8% and the growth rate of corporate and government tourism
will reach 10.9%. By 2020, forecasted by China Research and Intelligence (www.crireport.com), China will become the worlds largest tourist destination country and the
fourth largest tourist exporting country. As a result, tourism industry as one of the six
emerging consumer hot industry, in the coming years, there will be significant
investment opportunities
CHINA TOURISM REPORT Q1 2012

Business
Monitor
International's
China
Tourism
Report
provides
industry
professionals and strategists, corporate analysts, tourism associations, government

departments and regulatory bodies with independent forecasts and competitive
intelligence on China's tourism industry. Tourist Arrivals Point To Slowing
Trend Total arrivals to China continued to slow in July 2011, following a slower than
expected first half of the year. In total, tourist arrivals reached 11.8mn, with foreign
arrivals (defined as not from Hong Kong, Macau or Taiwan) reaching 236,720. This
brought January-July 2011 arrivals to 78.03mn, growth of 1.32% year-on-year (y-oy). While a slight improvement on the 1.15% growth in H111, it was well below the
6.3%
growth
level
recorded
for
full-year
2010.
Indian tourism
The Indian tourism industry is interwoven with the countrys monetary development.
As GDP continues to mature, it increases deals in fundamental infrastructure like
transportation systems, which is necessary to support the tourism industry. The hotel
industry is directly connected to the tourism industry in India. Over the last decade,
India has transformed into one of the most popular tourism destinations in the world,
largely as a result of the governments Incredible India campaign which showed
India in a new light to overseas tourists. In 2005, the appearance of global tourists
improved by 16 percent, leading the resurgence of Indian tourism. As new
destinations extend the tourist entry is likely to rise. Numerous procedures have
been taken in infrastructure, which will shine Indian hospitality for overseas guests.
Under the automatic path, 100 percent FDI is allowed in hotels and tourism. Travel
and tourism is a US$32 billion business in India with an input to 5.3 percent of Indian
GDP. Many worldwide hotel groups are setting up their businesses in India and
many global tour operators are establishing operations in the country.
TOURISM DEVELOPMENT IN INDIA
Tourism development in India has passed through many phases. At Government
level the development of tourist facilities was taken up in a planned manner in 1956
coinciding with the Second Five Year Plan. The approach has evolved from isolated
planning of single unit facilities in the Second and Third Five Year Plans. The Sixth
Plan marked the beginning of a new era when tourism began to be considered a
major instrument for social integration and economic development.
Does India have potential for tourism development?

India does have the potential to grow successfully in travel and tourism. India has got
all the attractive places that excite the tourists to haunt it. Tourism is not only a global
industry but also a bridge that ties together various cultures, ethnicities and hence try
to prevent conflicts, In addition, the govt. of India is investing more capital in this
sector
with
the
hope
that
it
will
try
to
lift
its
economy
up.
Tourism in India
Tourism in India is the largest service industry, with a contribution of 6.23% to

the national GDP and 8.78% of the total employment in India. In 2010, total Foreign
Tourist Arrivals (FTA) in India were 5.78 million and India generated about 200 billion
US dollars in 2008 and that is expected to increase to US$375.5 billion by 2018 at a
9.4% annual growth rate. The majority of foreign tourists come from USA and
UK. Kerala, Tamil Nadu, Delhi, Uttar Pradesh and Rajasthan are the top five states
to receive inbound tourists.
China V\s India
China
Ranked 10th regionally, has seen the largest rank improvement of all countries this
year, moving up by a remarkable 15 places to 47th overall. China has been building
on a number of clear strengths it is ranked 7th for its natural resources, with many
World Heritage natural sites and fauna that is among the richest in the world. It is
ranked 15th for its cultural resources, with many World Heritage cultural sites, many
international fairs and exhibitions held in the country, and creative industries that are
unsurpassed. Moreover, the country is ranked 20th in price competitiveness and28th
for the overall prioritization of the sector.
India
India is ranked 11th in the region and 62nd over-all, up three places since last
year. As with China, India is well assessed for its natural resources (ranked 14th)
and cultural resources (24th),with many World Heritage sites, both natural and
cultural, rich fauna, and strong creative industries in the country .India also has
quite a good air transport network (ranked 37th), particularly given the countrys
stage of development, and a reason-able ground transport infrastructure (ranked
49th).However, some aspects of its tourism infrastructure main somewhat
underdeveloped (ranked 73rd),with very few hotel rooms per capita by international
comparison and low ATM penetration .Further, despite government and industry
efforts to promote the country abroad (India is ranked 1st with regard to tourism
fair attendance) and the exposure given to recent promotional campaigns ,the
assessment of marketing and branding to attract tourists remains average (ranked
53rd).Another area of concern is the policy environment, ranked 108th,with much time
and cost for starting a business, bilateral Air Service Agreements that are not
assessed as open ,and visas required for most visitor
INTERNATIONAL TOURISM INDUSTRY

Over time, an ever increasing number of destinations have opened up and invested
in tourism development, turning modern tourism into a key driver of socio-economic
progress through the creation of jobs and enterprises, infrastructure development
and the export revenues earned.
As an internationally traded service, inbound tourism has become one of the worlds
major trade categories. The overall export income generated by inbound tourism,
including passenger transport, exceeded US$ 1 trillion in 2010, or close to US$ 3
billion a day. Tourism exports account for as much as 30% of the worlds exports of
commercial services and 6% of overall exports of goods and services. Globally, as
an export category, tourism ranks fourth after fuels, chemicals and automotive
products. For many developing countries it is one of the main sources of foreign
exchange income and the number one export category, creating much needed
employment and opportunities for development.
LAWS AND REGULATIONS OF TOURISM INDUSTRY

With the development of Chinas tourism industry, the tourist exchanges between China
and other countries are developing steadily. At present, 32 foreign travel agencies have set
up branches in China. And Chinas tourist agencies had also set up 17 branches overseas.
China has establish close links and has conducted a series of important cooperation with the
United Nations World Tourism Organization, Pacific Asia Travel Association, the World
Travel & Tourism Council and other international tourism organizations. The rapid
development of China outbound tourism has made China the largest passenger source
country in Asia and the major emerging passenger source country in the world. Nowadays
many countries and regions have reduced the visa threshold for Chinese tourists. For
example, the 25 contracting country of Schengen Agreement have jointly implemented the
EU visa code, which promotes visa facilitation and reduces visa fees appropriately; Germany
launched an online reservation system; Korean Ministry of Justice issued Proposal on
Relaxing Chinese Tourists Visa Standards, and Japan also launched Japan in July a more
relaxed personal travel visa policy.
Principles and Policies

The year of 2000, at the turn of the new century, was a key year for China's tourism
industry to inherit the past and usher in the future. The principles and policies put
forward in the year played a key and guiding role in development of the tourism
industry.
LEGAL SYSTEM FOR TOURISM

Last year, 2000, was a year in which we continued to improve the legal system for
tourism. A large number of rules, regulations and documents related to tourism were
put forward throughout the country, which ensured the healthy development of
tourism industry.
Travel and Tourism in China, Key Trends and Opportunities to 2015

The Study provides top-level market analysis, information and insights, including:
Historic and forecast market sizes covering the entire Chinese travel industry
Descriptions and market outlooks for various sectors in the Chinese tourist
industry, such as transportation, accommodation and travel intermediaries
Detailed market classification across each sector with analysis using similar
metrics
Key Highlights of China
Overall, the countrys total tourist volumes recorded a CAGR of 10.77% over
the review period, increasing from 1,478.4 million in 2006 to 2,226.1 million in
2010.
Over the review period, the Chinese government invested CNY7.3 trillion in
transport infrastructure projects, with the majority of the investment being
used to develop the countrys road and rail networks.
Over the forecast period, the total volume of Chinese tourists is expected to
record a CAGR of 9.25%, increasing from 2.43 billion in 2011 to 3.46 billion in
2015, with this growth being driven by increased foreign investment in the
Chinese tourism industry.
According to the countrys twelfth five-year plan, the government plans to

invest CNY1.5 trillion into the development of Chinas aviation market,
including increasing the countrys number of airports from 175 to 220 by
2015.
China Tourism Sector New Opportunities

According to China National Tourism Administration (CNTA), in 2015 China will be
No. 1 tourism source market worldwide
According to research report China Tourism Sector New Opportunities, has found
that the domestic and outbound tourism segments have grown, despite the
economic slowdown and changing industry landscape. With a view to promoting

tourism, the Chinese government has taken various initiatives, including inking
bilateral agreements with neighboring countries, granting Approved Destination
Status
and
easing
VISA
norms.
Within the industry, online tourism is the segment that has witnessed a significant
growth on the back of booming domestic tourism and improving technical
infrastructure. The popularity of internet and e-commerce were the main factors
which instilled growth in the online tourism. Looking at the sectors vast potential, our
report analyzes the key trends driving it.
Summary
China ranks as the second-most visited tourism destination in the Americas region
after the US, and is the tenth-most visited destination globally for international tourist
arrivals. Tourism is the second-largest revenue generator in the country, after oil,
and international tourist arrivals increased by XX% in 2011 to XX million. Domestic
tourism also remained buoyant with XX million arrivals during the year. The countrys
close proximity to the US enables it to access the worlds largest market in terms of
tourism.
Bibliography
Websites:
www.travelchinaguide.com
www.cnto.org
www.chinahighlights.com
www.tourismchina-ca.com
www.china.org.com
www.incredibleindia.org
www.india-tourism.com
www.tourisminindia.com
A
ON
Political & Legal Environment of China
with Reference to Gems & Jewellery Industry
Submitted to

Under
Faculty Guide
Class In-Charge
ISHITA ASHARA
DR. KERAV PANDYA
(ASST. PROFESSOR)
(ASST. PROFESSOR)
Submitted by
Dharmesh Balar
(107050592049)
Ritesh Bhungaliya (107050592050)

Rohit Dadhwal
(107050592051)
Bhavesh Virani
(107050592052)
Mehul Galani
(107050592053)

M.B.A PROGRAMME
Ahmedabad
CHINA ECONOMIC OVERVIEW

Economic restructure is one of the most crucial elements of China's reform and
opening-up policy. For the first 30 years of the PRC, the government practiced a
planned economy system, whereby industrial production, agricultural production, and
the stocking and selling of goods in commercial departments were all controlled by
state plan. The variety, quantity and prices in every sphere of the economy were
fixed by state planners. While this contributed to the planned, focused and steady
development of China's economy, it also sapped its vitality and limited its growth.
Economic reforms began with the rural areas in 1978, and were extended to the
cities in 1984.
In 2002, after some 10 years of reform in the clear direction of the establishment of
a socialist market economy, the government set out the main principles of economic
restructuring: encouraging the development of diversified economic elements whilst
retaining the dominance of the public sector; creation of a modern enterprise system
to meet the requirements of the market economy; a unified and open market system
across China, linking domestic and international markets, and promoting the
optimization of resources; transformation of government economic management in
order to establish a complete macro-control system; encouraging certain lead groups
and areas to become rich first, enabling them to help others towards prosperity too;
the formulation of a China-appropriate social security system for both urban and rural
residents, so as to promote overall economic development and ensure social
stability. In 1997, the government stressed the importance of the non-public sector to
China's national economy, in which profitability is encouraged for such essential
factors of production as capital and technology, so as to further progress economic
reforms.
A socialist market economic system has now taken shape, and the basic role played
by the market has been improved in the sphere of resource allocation. At the same
time, the macro-control system continues to be perfected. The pattern has basically
been formed in which the public sector plays the main role alongside non-public
sectors such as individual and private companies to achieve common development.
According to the plan, China is forecast to have a relatively complete socialist market
economy in place by 2010 and this will become comparatively mature by 2020.
ABOUT POLITICAL ENVIRONMENT

Political
China's government is a pyramid shaped structure, at the top of which sits the
President, currently Hu Jintao. The role of the Presidency is essentially t to provide
vision - to set the general course for the country as a whole. Each of China's leaders
since Mao has marked his role with a body of thought which all those below are
supposed to turn to as general guidance in policymaking.
According to the Chinese Constitution, "The People's Republic of China is a socialist

state under the people's democratic dictatorship led by the working class and based
on the alliance of workers and peasants." The government is comprised of the
system of people's congresses and the political party system that accords with it is
that of multi-party cooperation and political consultation under the leadership of the
Communist Party of China (CPC). The systems of people's congresses, multi-party
cooperation, regional ethnic autonomy, and self-governance at the primary level of
society together constitute the kernel and fundamental framework of China's political
system. As one of China's fundamental political system, the multi-party cooperation
system identifies the status and functions of the CPC and the eight other political
parties in the political life of the state, and the relations between the parties.
The Chinese government consists of a system of multi-party cooperation and

political consultation under the leadership of the CPC. The system ensures that the
CPC is the only party in power in the People's Republic of China. Under the
precondition of accepting the leadership of the CPC, the eight other political parties
participate in the discussion and management of state affairs, in cooperation with the
CPC. Political consultation means that under the leadership of the CPC, all parties,
mass organizations and representatives from all walks of life take part in
consultations of the country's basic policies and important issues in political,
economic, cultural and social affairs before a decision is adopted and in the
discussion of major issues in the implementation of the decisions. Political
consultation takes the organizational form of the Chinese People's Political
Consultative Conference. Political consultation is the most important political and
organization form of the multi-party and political consultation system. Cooperative
relations between the CPC and other political parties are based on the principle of
"long-term coexistence and mutual supervision, treating each other with full sincerity
and sharing weal or woe.

LEGAL SYSTEM OF CHINA
Chinas lack of an independent judicial system exacerbate all the other fault lines
running through the authoritarian state; there simply is no effective recourse
available to individuals whose interests are harmed by the excesses of CCP officials,
laws, and institutions.
Think of the scope and scale through civil and criminal
litigation redress from unfair laws and business practices, compensation for injury,
fraud, and lax environmental regulation, assignment of liability, justice for victims of
public and private malfeasance, marital and custody disputes, protection of private
physical and intellectual property.
China's legal system lacks neutrality. The CCP approves all court appointments, and
judges are technically responsible to the Party, not to people. The CCPs Political
and Legal Committee has the power to interfere in discussions, and even to overturn
verdicts issued. In addition, the infrastructure lacks capacity; there is one lawyer per
10,000 people in China.
Most tangible reform in Chinas legal system has taken place in the area of civil laws.
These primarily concern business disputes associated with Chinas rapid economic
modernization in which people seek protection and redress from a wide array of
abuses committed in the pursuit of economic competitive advantage.
Other avenues open to individuals who feel they have complaints against the state
include the petition system, mediation, and protests none of these options are
terribly effective. An important alternative to laws is severely lacking in China: free
media. Many scandals and disputes are settled in other countries simply because
they find their way to the newspaper or other public outlets.
In China, suspects are assumed guilty by the system and must be proven innocent.
Chinese National Bar Association reports that 70% of defendants go to trial without a
lawyer. It is thus no surprise that, in China, there exists a 99% conviction rate for
criminal defendants. Punishments for convicted criminals is unkind and includes the
death penalty which can be given for 68 offenses, two-thirds of which are nonviolent
crimes such as bigamy, internet-hacking, cyber-crimes, stealing gas, and tax
avoidance
The current Criminal Law Code was adopted in 1979 and later amended in 1997.
Aside from protecting society from harm, a key goal underlying the criminal laws, and
the system in general are to reform the person convicted of the crime.
There are five principle stages of a criminal case:
Initiation,
Investigation,
Prosecution,
Adjudication, and
Execution of the sentence.
At the formal trial, there are five stages.
1. First the chief adjudicator begins the and the procurator reads the indictment.
2. The adjudicators question the defendant and the other parties, other
witnesses are examined, and if granted permission the defendant and his
defender may question the witnesses.
3. This is the oral argument phase, court debate, where the procurator, victim,
defendant and defender are permitted to make speeches supporting their
cause.
4. The chief adjudicator will announce that the court debate is finished and the
defendant is given the right to make a final statement.
5. The case is deliberated by the court, and the judgment is announced in public.
The CCP aims to build the legal infrastructure of the country and has embarked on
this in its technocratic manner of studying the laws of other countries and carefully
codifying its Chinese adaptations. As in other areas, reform in the legal system has
often served only a safety valve function - more cases processed, more complaints
heard, yet the outcomes remain largely unchanged.
There are three stages to the ordinary trial process.
1. This stage is investigation stage, where the parties and witnesses are
questioned by the court, and there is the presentation of material and
documentary evidence. (Article 124)
2. The second is the court debate, this is comprised of the parties and their
counsel offering their arguments. (Art. 127)
3. The third stage is the judgment of the case, assuming that mediation is once
again unsuccessful. (Art. 128).
Gems and Jewellery Industry in India
Indian gems and jewellery have been acknowledged the world over for their
exquisite craftsmanship. Our country is a rich source of many precious and semi
precious stones. India has also been the largest purchaser of gems stones, rough
diamonds and precious metals for value addition and exports besides providing a
large domestic market for jewellery and cut-diamonds. India has the distinction of
being one of the first countries to introduce diamonds to the world. The country was
also one of the first countries to mine, cut & polish, and trade in diamonds. The two
major segments of the gems and jewellery business in India are gold and diamond
jewellery.
During 2010, Botswana was the largest diamond producing country, in terms of
value, estimated at US $ 2.96 billion, recording a decline in growth of 7.7% over the
year 2006. Botswana constituted a share of 25% in the world production of
diamonds. Botswana was followed by Russian Federation (21.7%), Canada (13.7%),
South Africa (11.7%) and Angola (10.5%), as the worlds largest producers of
diamond. Lesotho (growth of 96.4%), Canada (17.5%) and Sierra Leone (13%) were
countries, which showed impressive growth rates in their production of diamonds
during 2010.
Indian gems and jewellery have been acknowledged the world over for their
exquisite craftsmanship. Our country is a rich source of many precious and semi
precious stones. India has also been the largest purchaser of gems stones, rough
diamonds and precious metals for value addition and exports besides providing a
large domestic market for jewellery and cut-diamonds. India has the distinction of
being one of the first countries to introduce diamonds to the world. The country was
also one of the first countries to mine, cut & polish, and trade in diamonds. The two
major segments of the gems and jewellery business in India are gold and diamond
jewellery.
The gems and jewellery sector can be categorised into the following sub-sectors
based on characteristics, processing techniques, preciousness in terms of price
range and marketability.
Gemstones - Diamonds and colour stones

(Precious, semi-precious and synthetic)
Jewellery - Plain Gold, Studded, Silver, Costume
Pearls
Over the years, global markets have been impacted by several developments like
falling trade barriers, increasing competition, changing customer preferences and
developments in technology in several areas.
GEMS AND JEWELLERY INDUSTRY IN CHINA
Enterprises smelting precious metals and diamond trading companies sell raw
materials like gold and diamond through exchange platforms (for instance Shanghai
Gold Exchange and Shanghai Diamond Exchange) to jewellery enterprises
(SGE/SDE members or units doing self-processing).
Jewellery enterprises with substantial turnover volume, who are, however, not
members of SGE/SDE, usually entrust member enterprises to buy raw material for
them in the exchanges, and thereafter, either produce jewellery themselves or, in
most cases, employ some processing firms to do so. Then they use their own retail
network to sell the product to consumers.
Other non-member retail enterprises can buy jewellery products through three
channels:
Buy in bulk from member enterprises and then sell through own retail shops
Directly buy in bulk from the producing and processing firms and then sell through
own
Retail shops
Buy in bulk from non-member enterprises and then sell through own retail shops.
However, the third channel mentioned above is very rare.
COMPARATIVE POSITION OF GEMS AND JEWELLERY WITH INDIA
Key Factors and Importance of Gems and Jewellery Industry In China
(1) Jewellery is traditionally a luxury item of consumption, and demand for jewellery
is highly elastic to income. As Chinas per capita disposable income rises, jewellery,
after real estates and automobiles, has emerged as the third hottest item of
consumption in recent times.
(2) The appeal for jewellery is the highest among younger consumer sections.
Chinas young working age population is quite high. There is also a large demand
from the matrimonial market.
(3) Foreign tourists in China are also one of the major categories adding to jewellery
demand in China. As China brand becomes popular overseas, especially in
traditional areas of Chinese strength like jadeite, jade ornaments and pearls, as well
as new areas like diamond processing, the demand in these segments would only
grow.
(4) As Chinas GDP and per capita income increases, a part of the consumer class
has Started using jewellery items as items of domestic use, making China the
second largest consumer nation in the world.
Present Position and Trend of Gems and Jewellery Industry In India
After making its mark in the world diamond processing industry, India is well on its
way to becoming the leading global gems and jewellery hub. Indias gems and
jewellery industry is now on a high growth trajectory.
Composition of Exports:
6. Cut and polished diamonds: The export of cut and polished diamonds grew
manifold in 2010-11 as compared to 2009-10. In 2010-11, the export of cut and
polished diamonds was US$ 28.2 billion as compared US$ 15.6 billion, recording a
growth of 81.5 per cent.
7. Coloured Gemstones: Export of coloured gemstones was registered at US$ 0.314
billion in 2010-11 as compared to US$ 0.304 billion in 2009-10, showing a growth of
3.5 per cent.
8. Gold Jewellery: Export of Gold jewellery also grew tremendously in 2010-11,

registering US$ 12.9 billion as compared to US$ 6.1 billion in 2009-10. A growth of
110.3 per cent was recorded.
Gujarat Leads in Gems & Jewellery Industry
It is one of the fastest growing industries in the country and contributes to about 15
percent of Indias total exports. Gujarat is the leading state in India in gems and
jewellery sector, as it contributes to about 72% of the total exports of India. Gujarat
has a well established diamond industry with diamond and jewellery units located in
the cities of Gujarat
Ahmadabad
Palanpur
Bhavnagar
Valsad
Navsari
Surat
Almost 80 percent of the cutting & polishing of diamonds (processing) is done in

Gujarat. 90% of total diamonds in Gujarat are processed by about 10,000 diamond
units located in and around Surat, alone.
Challenges
The sector faces challenges such as impact of recession, competition from China
and other competing nations, rise in prices, low level of technology absorption, R&D
and product development. The labor law also aids the sector to remain unorganized.
The gems and jewellery sector is very much prone to the exchange rate fluctuation
that affects the margins of the players.
The EXIM report further makes suggestions to counter the challenges by branding of
jewellery, hallmarking, increasing market presence in platinum-based jewellery,
change in product portfolio, continuous skill development, establishing diamond
bourses, technology upgradation, and through participation in international
exhibitions. The sector has slowly shown the rise of branded jewellers like Gitanjali
and Tanishq and is reaching the younger buyers who do not have much experience
of buying precious items like gold or diamond.
Taxation of Export-Import Of Jewellery Product
For Production of gems and jewellery from china:

China's acceptance of World Trade Organization (WTO) membership opens up vast
opportunities for foreign participation in its jewellery market. Following are some
taxes in China
VAT:
There are two levels of taxes, namely a base rate of 17% and a low rate of 13%.
Precious metal products and minerals that have not undergone processing are taxed
at the rate of 13%. Processed stones and other precious metals jewellery are taxed
at 17%.
Resources Tax:
Resources tax is imposed on those units which develop taxable mining products
within China.
This is a specific tax. For non-industrial and jewellery-grade diamond, resources tax
is 10 RMB
per carat, while for industrial diamond, it is 2 RMB per tonne.
Consumption tax:
Consumption tax is an indirect tax imposed on consumers of particular consumer
goods and it is
being levied in China at present on items like cigarette, liquor, cosmetics and
jewellery. Several
jewellery items are taxed at the rate of 10%. Non-mounted diamond and diamond
jewellery, diamond-inlaid precious metal jewellery and gold jewellery are taxed at
5%.
Import:
Imported raw materials for jewellery are taxed at a lower rate. For instance, MFN
rates for sorted
and unsorted natural pearls are respectively 25.8% and 25.7%, non-processed
industrial diamond (both natural and synthetic) and diamond powder are free of tax,
import tax on non-processed gemstones is 3%. Finished products are taxed at a
higher rate. For instance tariffs on precious metal jewellery are 30% (25% under
Bangkok Agreement). Rates have been falling since Chinas accession to the WTO.
Import tariffs for the year 2004 are given at appendix E in Resources section
Export:
Consumption tax is not imposed on export products. Export tax rebate is granted on
export of
Gemstones (13%), diamond (17%) and natural and artificial pearls (5%).
Special taxation policies within SDE:

No import VAT/ consumption tax or tariff is levied on imported diamond traded
directly within SDE.
Diamond traded within SDE is exempt from VAT and consumption tax.
Domestic diamond, once it enters SDE, is recognized as export, and export rebate
is granted
while consumption tax is exempted.
Diamond taken out of SDE for sale in the domestic market is taxed.
GOVERNMENT POLICY FOR GEMS AND JEWELLERY INDUSTRY: INDIA
Trade Policy
Exporters of gems and jewellery are eligible to import their inputs by obtaining
Replenishment Licences, Diamond Imprest Licences and Bulk Licences for rough
diamond from the licensing authorities.
Foreign Trade Policy (2009-2014) Initiatives
Import of gold of 8000 and above is allowed under replenishment scheme subject to
import being accompanied by an Assay Certificate specifying purity, weight and alloy
content. Duty Free Import Entitlement [based on Free On Board (FOB) value of
exports during previous financial year] of consumables and tools, for:
Jewellery made out of:
Precious metals (other than gold & platinum) - 2 per cent
Gold and platinum - 1 per cent
Rhodium finished silver - 3 per cent
Cut and polished diamonds - 1 per cent

Duty free re-import entitlement for rejected jewellery shall be 2 per cent of
FOB value of exports.
In an endeavour to make India an international trading hub for diamond, it is
planned to establish "Diamond Bourse (s)".
Industry Policy
All industrial undertakings of gems and jewellery are exempt from obtaining an
industrial licence to manufacture. They are required to file an Industrial Entrepreneur
Memoranda(IEM) in Part 'A' (as per prescribed format) with the Secretariat of Industrial
Assistance(SIA), Department of Industrial Policy and Promotion, Government of India,
and obtain an acknowledgement. Industrial undertakings are free to select the location
of a project.
100 per cent Export Oriented Units (EOUs) and units in the Export Processing Zones
(EPZs)/Special Economic Zones(SEZs), enjoy a package of incentives and facilities,
which include duty free imports of all types of capital goods, raw material, and
consumables in addition to tax holidays against export.
Foreign Direct Investment Policy
At present, the Indian government allows 100 per cent foreign direct
investment (FDI) in gems and jewellery through the automatic route.
For exploration and mining of diamonds and precious stones FDI is allowed
up to 74 per cent under the automatic route.
For exploration and mining of gold and silver and minerals other than
diamonds and precious stones, metallurgy and processing, FDI is allowed up
to 100 per cent under the automatic route.
Tariff-Non-Tariff Policy
The import duty on most of the items under this group is 35.2 to 56.832 per cent.
This includes a basic duty and a special additional duty. However, in case of certain
items like dust and powder of precious or semi-precious stones, waste and scrap of
precious metal, gold and silver coins, imitation jewellery etc. attract higher duty.
Import of Diamonds for Certification/ Grading & re-export

The authorized offices/agencies in India of Gemological Institute of America (GIA) or
any other agency approved in this regard, shall be permitted to import diamonds to
their laboratories for the purpose of certification/grading reports by them with a
condition that the same should be re-exported with the certification/grading reports
issued by them without any import duty, as per the procedure laid down in HBP v1.
Following items, if exported, would be eligible for facilities:
(a)
Gold jewellery, including partly processed jewellery and articles including
medallions and coins (excluding legal tender coins), whether plain or studded,
containing gold of 8 carats and above;
(b)
Silver jewellery including partly processed jewellery, silverware, silver strips
and articles including medallions and coins (excluding legal tender coins and any
engineering goods) containing more than 50% silver by weight;
(c)
Platinum jewellery including partly processed jewellery and articles including
medallions and coins (excluding legal tender coins and any engineering goods)
containing more than 50% platinum by weight.
Certification of Gems and Jewellery:
The Gems & Jewellery Promotion Council is India's certification authority and The
Gem and Jewellery Export Promotion Council (GJEPC) is the apex body of the gem
and jewellery trade in India, which was set up in 1966 for promoting precious stones
and jewellery exportations. The Council is primarily involved in introducing the Indian
gem & jewellery products to the international market and promotes their exports
The Bureau of Indian Standards:
This National Standards Body of India is responsible for hall marking of gold
jewellery and certification of its purity.
KEY RISK FACTORS TO GEMS AND JEWELLARY SECTOR

Limited Standardisation:
Possible Long-Term Threat from China:
Gems and Jewellery Market Potential
Gems & Jewellery exports are the back-bone of the sector and also of our overall
exports. The sector is expected to grow at a CAGR of 15% to reach a size of US $
58 billion by 2015 from the current US $ 25 billion. The government has taken
significant steps for the Gems & Jewellery exports in terms of duties and taxes,
infrastructure (SEZ, EPZs etc) and policy (EXIM Policy for 2009-14)
Growth Drivers and Opportunities
Growing Spending Power

Organised player acting as a catalyst
Real Estate and Other Costs Under Manageable Limits
Challenges of Gems and Jewellery sector
Competing for Share of Wallet Expenditure and Investments
Mindset and Manpower
Upgradation /Modernization
RECOMMENDATIONS
To the Industry
1. Potential Assessment and Strengthening Consumer Understanding
The domestic market holds a significant opportunity and its potential needs to be
fully explored.
2. Invest in Retailing and Brands

The organised retail and brands can provide impetus to the sector. Appropriate
investments can potentially put the category on a higher priority in the consumer
basket and can generate the higher margins.
3. Improve Skill Sets & Quality of People

A joint effort by the Industry to invest in the development of vocational training
institutes could be a way forward with Industry captains showing the way forward by
leading efforts to underwrite recruitment of graduates and participate in syllabus
design & development
4. Enhance Product Design & Manufacturing Quality Standards

A National Institute of Jewellery Design & Development would go a long way
in providing the platform for development of a pipeline of innovative high quality
designers that can serve the industry as a whole.
5. Promote Adoption of Industry Wide Standards for Gaining Consumer Trust
6. Co-operative Use of Resources

To bring down cost of operation and investments in the sector, industry
players should adopt co-operative use of technology and marketing.
To the Government:
Government and Apex bodies could act as facilitators in broadening the outlook of
the exporters /players and help them in familiarizing with the changing scenario both
in the domestic and international fronts.
1. Provide Industry Status to Gems & Jewellery Sector
2. Creating Technology Upgradation Fund
3. Creation of Design Centres / Studios, Holding Fairs
4. Asset (Gold) Based Leverage
5. Regulatory Laws & Taxation
6. Modernize Labor Laws
7. Increase the Setting up of Export Focused SEZs
8. Gold Exchange
BIBLIOGRAPHY
- REPORT
FICCI Technopak, Unlocking the potential of Indias Gems and Jewellery

Sector.
A Guide For Indian Businesses Gems & Jewellery Industry In China 2008
National Skill Development Corporation, Human Resource and Skill

Requirements in the Gems and Jewellery Industry-2002.
WEBSITE
www.China.org.cn
-
http://kp.www.gjepc.org/trade/chinesegnjmetal.aspx
http://beforeitsnews.com/story/1645/667/Greater_China_Gems_and_Jewelry_Industry_Ou
tlook_to_2015.html
http://www.smetimes.in/smetimes/in-depth/2008/May/29/opportunities-china-gems-andjewellery.html
http://www.biztradeshows.com/china/china-tradeshows.mp?industry=gems-jewelry
www.gov.cn
A
ON
Infrastructure - A Comparative Analysis between India & China

Submitted to
Under
Dr. Kunjal Sinha
(Asst. Professor)
Submitted by:
DHARA BHAGAT
107050592055
DHAVAL DOSHI
107050592056
RUSHABH SHAH
107050592057
NIRAV PATEL
107050592058
MITESH GHERVADA
107050592059
AMRITA SHUKLA
107050592060
M.B.A SEMESTER IV
M.B.A PROGRAMME
Ahmedabad
MAY 2012
TABLE OF CONTENT
Topic
Infrastructure Meaning
Page No.
3
Demographic Profile
Infrastructure Sectors
Economic Overview
International trade of India and China
10
Present Trade Relations and Business Volume
11
PEST Analysis
12
Conclusion
16
Meaning & Types of Infrastructure :

Meaning :
Infrastructure is basic physical and organizational structures needed for the
operation of a society or enterprise necessary for an economy to function.
It can be generally defined as the set of interconnected structural elements
that provide framework supporting an entire structure of development.
It refers to the technical structures that support a society, such as roads,
water supply, sewers, electrical grids, telecommunications.
The basic physical systems of a country's or community's population,
including roads, utilities, water, sewage, etc. These systems are considered
essential for enabling productivity in the economy. Developing infrastructure
often requires large initial investment, but the economies of scale tend to be
significant.
Types of Infrastructure :
There are two types of infrastructure. They are as follows.
Hard infrastructure
It refers to the large physical networks necessary for the functioning of a
modern industrial nation.
Soft infrastructure
It refers to all the institutions which are required to maintain the economic,
health, and cultural and social standards of a country.
Demographic Profile
Demography is the science and study of human population through vital statistics.
Information is taken on births, deaths, marriages.
They also study the size and growth of populations. It is important because it is
the deciding factor on whether or not the business will have enough customers
to be successful.
It also includes :
The physical features of both the countries.
The regional divisions of both countries.
The Mountainous Topography & Rivers and Lakes.
China and India are the worlds two most populous countries. Indias current
rate of population growth is about twice that of China (1.55 percent annually,
versus 0.66 percent for China), and its total population will equal Chinas in 2025
(about 1.4 billion in each country), thereafter exceeding Chinas.
The Indian population will continue increasing through at least 2050, while
Chinas will peak at about 1.5 billion in 2032, declining thereafter. Indias primeworking-age population will overtake that of China in 2028.
On the other hand, Chinas population is aging more rapidly than Indias, in the
sense that the elderly are becoming an increasingly larger proportion of Chinas
population. India will have a lesser cost burden from this source because of its
younger population.
Chinas population also has higher average levels of literacy and education than
Indias. If India can successfully meet this challenge by investing in human
capital, it may be able to turn a disadvantage into an advantage through
productive employment of its growing pool of younger workers.
Infrastructure Sectors
We have focused on these infrastructure sectors. They are as follows.
National Highways
Railways
Ports
Telecom and IT
National Highways
In India, Six-laning 6,500 km of Golden Quadrilateral and selected National

Highways, Four-laning 6,736 km on North-South and East-West Corridors Fourlaning 12,109 km of National Highways, Widening 20,000 km of National Highways
to two lanes, Developing 1000 km of Expressways, Constructing 8,737 km of roads,
including 3,846 km of National Highways, in the North East.
In China, China has 1,209,800 kilometers (751,894 miles) of highway in total, among
which 271,300 kilometers (168,586 miles) are paved (with at least 24,474 kilometers
or 15,200 miles of expressways).
From the above information, we can conclude that China is ahead of India in its
National Highway Development Sector.
The development of Highways in China is far ahead from India.

Railways
Indian Railways has 114,500 kilometres (71,147 mi).of total track over a route of
65,000 kilometres (40,389 mi)and 7,500 stations. It has the world's fourth largest
railway network after those of the United States, Russia and China.
In China, China has an estimated 69,412 kilometers (43,131 miles) of railroad.

Railways have been the most important tools for transportation in China.
From the above information, we can conclude that India stands at 4 th position and
China stands at 3rd position in the sector of railways.
It is also seen that Indian railways cover 71,147 miles which is more as compared to
China which is covering 43,131miles.
Ports
In India, Capacity addition of 485 million MT in Major Ports, 345 million MT in Minor
Ports, construction of jetties and berths, Port connectivity, channels deepening and
port equipments.
Whereas, Chinas ports will stay number one. According to an outlook report by the
Chinese Academy of Sciences, Chinas ports will remain the busiest in the whole
world for 2011. This will be the case even if the economic recovery in the U.S. and
the European Union is very slow and will probably affect container volume growth.
We can conclude that the capacity of the ports of China are much more than that of
India.
It is also stated that according to an outlook report by an academy, they have posted
that Chinas port will remain No.1 as well as the most busiest port in the whole world.
Telecom and IT
Achieving a telecom subscriber base of 600 million, with 200 million rural telephone
connections, Achieving a broadband coverage of 20 million and 40 million internet
connections.
In China, It has 929.84 million mobile phone users and there are 420 million Internet
users as well as there are 364 million Broadband Users.
We can conclude that the telecom subscribers, broadband coverage and the internet
connections from this sector is much less than that from China.
Though there are many users of internet now in India, but it still lags behind China.
Economic Overview
According to the International Monetary Fund, as of 2011, the Indian economy is
worth US$1.631 trillion; it is the ninth-largest economy by market exchange rates,
and is, at US$4.057 trillion, the fourth-largest by purchasing power parity, or PPP.
With its average annual GDP growth rate of 5.8% over the past two decades, and
reaching 10.4% during 2010, India is one of the world's fastest-growing economies.
However, the country ranks 138th in the world in nominal GDP per capita and 129th
in GDP per capita at PPP.
According to the IMF, the People's Republic of China's annual average GDP growth
between 2001 and 2010 was 10.5%, the Chinese economy is predicted to grow at an
average annual rate of 9.5% between 2011 and 2015.
The overall growth of gross domestic product (GDP) at factor cost at constant prices,
as per Advance Estimates was 8.5 per cent in 2010-11, representing an increase
from the revised growth of 8 per cent during 2009-10, according to the monthly
economic report released for the month of July 2011 by the Ministry of Finance.
(source: www.finmin.nic.in)
As we can see the graph which is shown here, that India and China are top side
countries in case of GDP growth
India and china is much more ahead than brazil, Us, Japan and Russia in terms of
GDP growth rate.
International trade of India and China

International Business in India looks really lucrative and every passing day, it is
coming up with only more possibilities. The growth in the international business
sector in India is more than 7% annually. There is scope for more improvement if
only the relations with the neighbouring countries are stabilized. The mind-blowing
performance of the stock market in India has gathered all the more attention. India
definitely stands as an opportune place to explore business possibilities, with its
high-skilled manpower and budding middle class segment.
China's member status has brought about numerous policy changes to promote
openness, including tariff cuts and non-discriminatory treatment of domestic and
foreign companies, which are expected to have a major impact on the formerly wellprotected state-owned enterprise sector. Although China experienced growth and
success while only shallowly integrated, its reform-oriented leadership is consistently
looking to increase the pace of integration.
The government has decided to incur the high short-term costs of opening the
economy in order to reap the benefits of increased competitiveness that deeper
international trade and investment will bring.
Present Trade Relations and Business Volume of different

products with India.
The governments of both the countries also took the necessary initiative to turn into
dialogue partners in the Association of Southeast Asian Nations (ASEAN).
Both India and China hold more or less same positions in the global economic
scenario. This in turn has further enhanced the economic relations between the two
countries. In 2003, Bangkok Agreement was signed between the two countries.
Under this agreement both China and India offered some trade preferences to each
other. India provided concessions on 188 products exported from China.
On the other hand, China provided preferences on tariff for 217 products exported
from India. The economic relations between the two nations is expected to improve
aided by the flourishing IT and ITES sector, biotechnology industry, health sector,
and financial sector. The bilateral trade between the two countries is expected to
reach 20 billion US dollars by the year 2008. The projected figure for 2010 is 30
billion US dollars.
China has already been the top trading partner of India in the recent time. The
economic relation between the two countries is considered to be one of the most
significant bilateral relations in the contemporary global economic scenario and this
trend is expected to continue in the years to come.
PEST Analysis
Political
The Peoples Republic of Chinas current political system is Communism, with the
capital city being Beijing. There are 23 different provinces (including Taiwan) and five
separate regions in China. Their independence day was 221 BC under the Chin
Dynasty, January 1, 1912 under the Manchu Dynasty, and October 1, 1949 when the
Peoples Republic was formed, which is their national holiday. The Chinese
constitution was created on December 4, 1982, and their legal system involves a
very complicated set of cultural statutes and customs for criminal law.
The government is trying to upgrade the commercial laws to adapt to the new needs
required due to an increase in foreign trade (Forsyth, 2004, 35-38).
Economic
Chinas population is 1.3 billion people, 22.3% aged 0-14, 70.3% aged 15-64, and
7.5 aged 65 and over. Chinas GDP is $6.449 trillion, with the GDP real growth rate
at 9.1%, and GDP per capita at $5,000. The GDP by sector is 14.8% for agriculture,
52.9% for industry, and 32.2% for services. Investments make up 43.4% of the GDP
in China. However, the Chinese population has 10% of its people living in poverty,
with the lowest 10% equaling 2.4% of the household income, and the highest 10%
equaling 30.4%. The inflation rate is 1.2%, labor force 778.1 million, unemployment
rate 101%, and budget for revenues at $265.8 billion, with expenditures at $300.2
billion. The labor force includes 50% in agriculture, 22% in industry, and 28% in
services. Over 75% of all toys sold in the US are made in China and it controls
almost 25% of the globes foreign currency reserves. As for per capita income, China
has 6% growth (Fouquin, 1998, 105-108).
Agriculture and industry are the major markets in China, especially in larger cities
like Hong Kong and Shanghai, where there is a lot of foreign investment. The public
debt is 30.1% of the GDP. The agriculture products are wheat, rice, peanuts, tea,
potatoes, cotton, barley, fish and pork.
The industries include coal, textiles and apparel, iron and steel, automobiles,
telecommunications, electronics, cement, chemical fertilizers, petroleum, and food
processing.
The industrial growth rate is 30.4%, with $436.1 billion in exports, and $397.4 billion
in imports. The majority of the Chinese people are not very religious and considered
atheist, with only 3%-4% being Christian and 1-2% being Daoist, Muslim or Buddhist.
The country is not very culturally homogenous and the majority of the people are
Chinese. The official Chinese languages include Chinese, Mandarin and Cantonese
(Yin, 2007, 1-2).
FDI is beneficial to the host country because it brings in foreign business, products
and services that would otherwise not be available. However, FDI can also result in
small local businesses going bankrupt due to not having competitive advantages
over larger companies. FDI is the key to underdeveloped nations improving their
economy and strategic alliances.
China does not yet belong to any regional trade blocs and has been a member of the
WTO, World Bank and the IMF for 10 years. The country has borrowed billions of
dollars from the World Bank and the IMF in the past year, and how has huge debts
totaling over 300 billion dollars.
Sociocultural
China still maintains many of its most traditional values and beliefs of Confucianism,
which is taught at many schools and academies. Confucianism is a social order and
almost considered their religion since most Chinese do not follow any other doctrine.
The basis of Confucianism for the Chinese culture involves family organization and
many values related to social life.
Social harmony is a major rule to this belief, which also includes many cultural rituals
and ceremonies that are thousands of years old and still practiced by the older
generation today. However, many of the younger generation are less strict in their
Confucianism beliefs, due to modernization of the country and influences by other
cultures like America (Redinger, 2003, 1-2).
Technological
China has 263 million main line telephones, 269 million mobile phones, 160,421
Internet hosts, and 94 million Internet users.China is undergoing many new
technology changes, especially in their banking sector, which still concerns its
leaders due to its effect on the stability of the economy.
As China learns how to integrate new IT methods into its different sectors, they are
still trying to upgrade the skills and knowledge of their workers to meet the
technology needs (Rashtchy, 2004, 1-3).
China is also actively developing its software, semiconductor and energy industries,
including renewable energies such as hydroelectric, wind and solar power. In an
effort to reduce pollution from coal-burning power plants, China has been pioneering
the deployment of pebble bed nuclear reactors, which run cooler and safer than
conventional nuclear reactors, and have potential applications for the hydrogen
economy.
Chinas central government budget for science and technology has increased by
20%annually over the past 5 years. More recently, China approved their 12th FiveYear Plan in March of 2011. Within the plan, China has strategically selected seven
technology-related industries to be key sectors for development.
The government is expected to funnel over $1.5 trillion into these industries over the
next 5 years with the goal of increasing the technology sectors share of GDP from
2% currently to 15% by 2020.
In 2010, China was identified as the worlds leading green IT producer as the sector
grew 77% and brought in $63.9 billion in revenue. Looking forward, the sectors
growth is projected to continue as the government supports initiatives in an effort to
manage its Populations impact on the environment. For example, with the number of
cars in China forecasted to increase 500% by 2030, the government is targeting the
production of one million electric vehicles by 2015.
CONCLUSION
From the above we conclude the various challenges and its improvement needed in
the country. They are as follows:
The major challenges facing the sector are :
Indias roads are congested and of poor quality
Lane capacity is low majority of national highways are two lanes or less. A quarter of all
India's highways are congested. Many roads are of poor quality and road maintenance
remains under-funded. This leads to the deterioration of roads and high transport costs for
users.
Rural areas have poor access

Roads are significant for the development of the rural areas - home to almost 70 percent of
India's population. Although the rural road network is extensive, some 33 percent of Indias
villages do not have access to all-weather roads and remain cut off during the monsoon
season.
The railways are facing severe capacity constraints

All the countrys high-density rail corridors face severe capacity constraints. Also, freight
transportation costs by rail are much higher than in most countries as freight tariffs in India
have been kept high to subsidize passenger traffic.
Urban centres are severely congested

In Mumbai, Delhi and other metropolitan centres, roads are often severely congested during
the rush hours. The dramatic growth in vehicle ownership during the past decade - has
reduced rush hour speeds especially in the central areas of major cities.
Ports are congested and inefficient

The average annual growth of cargo volume in the ports in the last decade was close to
10%, However, capacity utilization in some of the major ports remain as low as 58-60%.
Both bulk and containerized traffic is expected to grow at a much faster pace in future and by
some estimate the container traffic is projected to grow to about 4.5 times of the current
volume by 2025. India's ports need to significantly ramp up their capacity and efficiency to
meet this surging demand.
Airport infrastructure is strained

Air traffic has been growing rapidly leading to severe strain on infrastructure at major
airports, especially in the Delhi and Mumbai airports which account for more than 40 percent
of nations air traffic.
IMPROVEMENTS :
Indias transport sector is large and diverse; it caters to the needs of 1.1 billion people. In
2007, the sector contributed about 5.5 percent to the nations GDP, with road
transportation.
However, the sector has not been able to keep pace with rising demand and is proving to
be a drag on the economy. Major improvements in the sector are therefore required
to support the country's continued economic growth and to reduce poverty.
Roads :
Roads are the dominant mode of transportation in India today. They carry almost 85
percent of the countrys passenger traffic and more than 60 percent of its freight. The
density of Indias highway network -- at 0.66 km of roads per square kilometer of land
is similar to that of the United States (0.65) and much greater than China's (0.16).
However, most roads in India are narrow and congested with poor surface quality,
and 33 percent of Indias villages do not have access to all-weather roads.
Railways :
Indian Railways is one of the largest railways under the single management. It
carried some 19.8 million passengers and 2.4 million tonnes of freight a day and is
one of the worlds largest employer. The railways play a leading role in carrying
passengers and cargo across Indias vast territory.
Ports :
India has 13 major and 199 minor and intermediate ports along its more than 7500
km long coastline. Indias ports play a very significant role in improving foreign trade
in a growing economy. These ports serve the countrys growing foreign trade in
petroleum products, iron ore, and coal, as well as the increasing movement of
containers. Inland water transportation also remains largely undeveloped despite
India's 14,000 kilometers of navigable rivers and canals.
Bibliography
1. http://en.wikipedia.org/wiki/China#cite_note-Ref_abw-252
2. www.finmin.nic.in
3. http://business.mapsofindia.com/india-business/international-business.html
4. http://www.cid.harvard.edu/cidtrade/gov/chinagov.html
5. http://www.economywatch.com/international-economic-relations/ch/
6. http://www.guggenheimfunds.com/libraries/literature_en/the_growth_potential
_of_china_s_technology_sector.pdf )
7. "Blinding Science: China's Race to Innovate" Bruce Einhorn, Business

Week, 31 March 2006, accessed: 16 April 2006
8. ^ Robert J. Saiget."China leading world in next generation of nuclear

plants DAGA. 5 October 2004. Retrieved 16 April 2006
9.
China Makes World's Fastest Supercomputer". International Business

Times. 28 October 2010
10.
Two China Supercomputers Among World's Top 10". WorldTech24.
2010-06-01. Retrieved 2011-11-01
2012
Country Study:
SOUTH KOREA
VADODARA - GUJARAT - INDIA
17th November, 2011
Compiled by:
Dr. Kunjal Sinha and Dr. Rajesh Khajuria
BRIEF REPORT
ON
OF
SOUTH KOREA
C K SHAH VIJAPURWALA
INSTITUTE OF
MANAGEMENT
(705)
MBA (DIV. B)
ENROLLMENT NOS.
107050592061
TO
107050592120
SHRI MAHAVIRA JAINA VIDYALAYA EDUCATION FOUNATION

C.K.SHAH VIJAPURWALA INSTITUTE FO MANAGEMENT
(AICTE Approved, Affiliated to Gujarat Technological University)
R.V.Desai Road Pratap Nagar, Vadodara -390004, GUJARAT, INDIA. Tel.: +91-265-2418328 -29-30
Fax: +91-265-2418327 Email : mba@cksvim.edu.in / cksvim@gmail.com Website : www.cksvim.edu.in
Country Study: SOUTH KOREA. Global Country Study by MBA Students (Batch 2010-12) Division B
(Faculty Coordinator - Dr. Kunjal Sinha)
Sr.
No.
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Enrollment
No.
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Name
Shah Ankitkumar Vinaykant
Chudasama Khushbu Sudhakarbhai
Priyal Surendra Mithaiwala
Agrawal Ravikumar Buddhisagar
Rajput Akash Harishbhai
Dangi dixitkumar Navnitbhai
Amdawadkar Kedar Shripad
Parmar Krutika Anubhai
Amin Pritiben Narharibhai
Maheshwari Piyush Mukund
Bhatt Dhrutiben Rohit
Chavhan Ragini Kishorbhai
Dhami Abhay Nitinkumar
Nihalani Rashmi Maheshkumar
Shah Vihangini Bharatkumar
Mohile Krutika Yogendra
Modi Harshil Sureshbhai
Shah Maulik Pankajkumar
Topic for Study by the Team of 6 MBA Students of CKSVIM

Vadodara
"SOUTH KOREA's Electronic and Telecommunications"

(Guide : Ms. Neelu Nakra, Asst. Professor )
"South Korea & India Dairy Industry & Product Market: A

Comparative Study"
(Guide : Mr. Prakash Patel, Asst. Professor)
"SOUTH KOREA's Banking and Non-Banking Services"

(Guide : Mr. Nirav Majmudar, Asst. Professor)
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107050592100
107050592101
Sonagara Dhaval Virjibhai

Pathan Haiderkhan Salimbhai
Shah Dhara Shaileshbhai
Parmar Dharmendra Amrutlal
Arti Bhuvneshwas Singh Rajput
Pancholi Hirali Pravinbhai
Thanth Rajubhai Nagjibhai
Bajani Nandan Dineshchandra
Shah Sapan Nareshbhai
Thakore Diptesh Shailendrakumar
Chauhan Mikinkumar Rajeshbhai
Pandya Ketulkumar Kanubhai
Rathod Sumantkumar Govindbhai
Patel Sameer Jayeshbhai
Tank Ravi Ratibhai
Macwan Boski Kirit
Tadha Nileshbhai Tejabhai
Shah Aakash Ashokkumar
Chokshi Hardik Naineshchandra
Shah Mahek Kamleshkumar
Shah Richaben Jayendrakumar
Desai Ripal Moghajibhai
Prajapati Krunal Dahyabhai
Limbachiya Tejaskumar
107050592102
Mahendrabhai
"Political Environment of South Korea"

(Guide : Ms. Preeti Singhal, Asst. Professor)
"SOUTH KOREA's Internet and e-commerce industry"(Guide :

Mr. Yogen Shah, Visiting Faculty )
"SOUTH KOREA's Automobile Industry"

(Guide : Ms. Ranjita Banerjee, Asst. Professor)
"SOUTH KOREA's Transport Industry"

(Guide : Mr. Manish Joshi, Visiting Faculty)
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Rathod Arjun Narendrabhai

Parikh Chaitree Babul
Chawda Rachanaben Pradip
Baraiya DharmeshKanubhai
Chhaiya Dilipkumar Rajabhai
Hadiya Pankajkumar Kanjibhai
Kapadia Heenaben Bhikhabhai
Makwana Bhavin Ramanlal
Mer Manoj Karshanbhai
Chauhan Ankitaben Jashvantlal
Parmar Ashish Shantilal
Vaghela Kamleshkumar Kanubhai
Shikhar Mathur
Nikita Soni
Jay Shah
Neelam Jain
"SOUTH KOREA's Service industry"

(Guide : Ms. Ranjita Banerjee, Asst. Professor)
"Cultural relationship / difference between India & South

Korea"(Guide : Mr. Umesh Shah, Visiting Faculty)
"Study of Technological Innovation in South Korea"

(Guide : Mr. Yogen Shah, Visiting Faculty)
A
GLOBAL COUNTRY STUDY REPORT
ON
Electronics and Telecommunication of South
Korea
Submitted to
C.K Shah Vijapurwala Institute Of Management
In
Faculty Guide
Neelu Nakra
Submitted by
1) Ankit Shah
2) Khushbu Chudasama
3) Priyal Mithaiwala
4) Akash Rajput
5) Dixit Dangi
107050592061
107050592062
107050592063
107050592065
107050592066
MBA SEMESTER III/IV

C.K Shah Vijapurwala Institute of Management
MBA PROGRAMME
Ahmedabad
SUMMARY
The growth of Korea's electronics industry has been characterized by two major
takeoffs that have turned this nation into a major global producer in less than two
decades. These export-driven takeoffs involved rapid technological shifts that
emphasized production in different electronics sectors and utilized Korea's most
significant international benefit, low-cost labor. In this process, Korea's territorial
division of labor has played a major role, promoting considerable concentration in
the primate metropolitan region during each takeoff, while a process of dispersion
occurs during intertakeoff periods. Statistical tests with a representative sample of
electronics plants show that territorial location is a far more important element of
interregional and local integration than the temporal parameter. A narrow focus
on takeoff dynamics that does not incorporate the territorial dimension would
therefore provide an inadequate explanation of Korea's emergence in electronics
production and of the domestic integration of this industry.
Korea's electronics competences in the past 25 years have undergone
remarkably consistent and rapid expansion in terms of (1) size and capacity of
facilities, (2) technological expertise and sophistication, and (3) income earned
and impact on the world market. Korea has built and is continuing to build a
stand-alone capability in a broad range of electronics technologies, including
DRAM, SRAM, and ASIC design approaches; electronics materials and
packaging; and development of key new information technology products (e.g.,
displays). The nation's strategic focus is on achieving dominance not only in
production and manufacture of electronics products and components, but also in
creation and innovation of new technologies in the field. Korea is determined to
remain internationally competitive in electronics in the long run and is organized
to commit the required long-term financial and logistical resources to achieve its
goals.
Imported electronic goods counted to $19.77 billion in recent times, as export
earnings were $3.17 billion.
More than 35 percent of electronics appliances imports in India are sourced from
China.
Indian electronics and appliances market has less than two percent share in the
global market, while share in production is less than one percent.
Foreign Direct Investments (FDI) in the electronics industry stood at $0.75 billion
during the nine year period from April 2000 to March 2009.
The electronic and appliances industry is dignified to grow at a compound annual
growth rate (CAGR) of 11 percent, as the industry which is estimated at $27
billion in 2008-2009, is expected to touch $40 billion by 2012.
The electronic and appliances industry is composed to grow at a compound
annual growth rate (CAGR) of 11 percent, as the industry which is estimated at
$27 billion in 2008-2009, is expected to touch $40 billion by 2012.
The key factors which will drive domestic electronics and appliances market
include growth in per capita income, shift in cultural patterns, life-styles and
access to credit. About 10 million households are projected to have income levels
above $10,000 per annum. With a growth of 20 percent in per capita income, this
segment provides opportunities for luxury products sales. More than 95 percent
of households are estimated to be below the income level of $10,000 in 2009-10.
Rising income and changing lifestyle have condensed the replacement cycle, as
a television set which is meant for change once in every nine years (It has come
down to 4-5 years). Other domestic appliances replacement cycle has also
dropped down to 7-8 years from 12 years. With the allocation of $8.15 billion in
the National Rural Employment Guarantee Act (NREGA), which is going to
benefit 44.7 million households, a change in the demand for consumer goods in
the electronics and appliances industry is expected.
The joint study has also recommended a 25 year master plan with a long term
vision for electronics and appliances industry, coming strategic options available
to attract manufacturing facilities in India.
Overview and Trends
Korea is among those OECD countries post the highest economic growth rates
(6.2% in 2010), despite such difficult conditions as the modesty of the advanced
countrieseconomic recovery and geopolitical risks. The financial markets in
Korea showed an unstable pattern of movements at certain times owing to the
fiscal problems in the Eurozone and North Korea-related risks. Consumer prices
marked quickeningmovements but in2010 as a whole rose by 2.9%, closely

approaching the 3.0% midpoint of the medium-term inflation target. In 2011,
Electrical & Electronics Industry
The Indian electrical equipment manufacturing industry is inspecting a sustained
grow momentum,with the industry registering a growth of 14% in the financial
year 2010-11.
Cable sector saw a rise in overall demand of 16%; mostly driven by control
cables which saw a growth of 32%.
LV and EHV power cables witnessed a steady growth of about 10%.
Indian exports of electrical equipment are less than 1% of the global trade.
With the electricity sector being a sunrise sector across the entire developing
world, there also exists a significant export potential for the domestic industry.
The Electronics Industry
The market for electronic products in India has witnessed significant growth in
recent years due to several factors: such as manufacturing growth, ICT
penetration, growing disposable income, retail boom and attractive finance
schemes.
The share of electronics production in India's GDP has been growing over the
years, with increasing position of this sector. From a level of 1.6% share in India's
GDP in 2001-02, it has increased to 1.95% in 2009-10.
The market size of the electronic industry is estimated to exceed US $ 150
billion by 2015.
The largest segment is the consumer electronics segment, while the biggest
export segment is of components.
India is also an exporter of a immense range of electronic components and
products for the following segments - Display technologies, Entertainment
electronics, Electromechanical components, Telecom equipment, Transmission &
Signalling equipment, Semiconductor designing ,Electronic Manufacturing
Services (EMS)
The export performance of electronic goods is expected to touch US $ 15 billion

by 2013-14.
Telecommunications: South Korea had 22.8 million landline telephones and
33,591,800 cellular phones in use in 2003. Estimates, the country had 42 million
radios,according to 2002 estimates. South Korea leads all nations in broadband
access and in 2003 had 29.2 million Internet users and 11 Internet service
providers. South Koreans had access to some 121 television broadcast stations
and 55.9 million television sets,in the late 1990s.
Why LG and Samsung only?
Among the number of foreign players operating in India, in Television Industry,
the two Koreanplayers, LG and Samsung they may be operating on some kind of
cooperating strategies. If one focuseson the pricing strategies, marketing
strategies, product choice, advertisements publicized, offersmade and their
timings, in India, it is clear that there is something which is going on wrong.Thus,
we are going to study the collaborated firm SamLG .Samsung is the world's
largest conglomerate by revenue with annual revenue of US $173.4billion in 2008
and is South Korea's largest chaebol. Samsung Group accounts formore than
20% of South Korea's total exports. In many domestic industries, Samsung Group
isthe only monopoly dominating a single market, its revenue being as large as
some countries' totalGDP
Samsung Electronics, which saw record profits and revenue in2004 and 2005,
overtook Sony as one of the world's most popular consumer electronics
brands,and is now graded in the world overall.
On the other hand, LG is the second largest maker of TV sets in the world. With
every design ofits television sets, The Videocon group hasan annual turnover of
US$ 4.1 billion, making it one of the largest consumer electronic and
homeappliance companies in India. Since 1998, it has expanded its operations
globally, especially inthe Middle East. Videocon has many products (within the
television segment itself) and is sellingthem through a Multi-Brand strategy. With
the largest sales and service network in India,Videocon Group brands include
Akai, Electrolux, Hyundai, Kelvinator, Kenstar, Kenwood,Next, PlanetM, Sansui,
Toshibha, Philips (TV Products) etc.
How LG and Samsung Won Over the Indian Market?

Sales of the two South Korea-based conglomerates were 35% to 50% higher in
India in September and October 2008, About 3.5 million government employees
received the first installments of their delayed salary raises around that time,
resulting in a sudden surge in disposable income.
However, is the level of success LG and Samsung have achieved in India. In just
over 10 years, the Korean due has established power over the Indian white
goods market, they account for the largest share of the $6 billion consumer
durables, electronics and appliances market, with LG claiming the preferred
brand position for virtually everything from televisions to microwave ovens and
washing machines, while Samsung is a steady number-two or number-three
player.
LG and Samsung's success is a function not just of what these two companies
did, but also of what their competitors didn't do. On the other hand, lower-priced
Indian brands offered old-generation products,they did not invest sufficiently in
R&D because they were not able to launch new products quickly enough to
amortize those costs.
IT and Broadband Development

Today, South Korea has the highest number of broadband users.The government
was active in promoting privatization and deregulation in general, and the
information technology (IT) sector was no exception.
The government implemented structural reforms in July 1990. Since the mid1990s, the Ministry of Information and Communications (MIC) has pursued a
policy of high-speed telecommunication infrastructure as a foundation to build a
knowledge-based society. Korea Information Infrastructure (KII) was established.
KIIs goal was to advance the nations IT infrastructure. In August 1995, the
Framework Act on Information Promotion was enacted.
In 1999, the government provided US$77 million in loans with preferential rates to
facilities service providers (FSP). In 2000, another US$77 million was provided in
loans for suburban areas, small cities and towns, and regional industrial areas.
Another US$926 million was provided until 2005 in order to supply the rural areas
with broadband.
The number of broadband subscribers in Korea reached 10 million in October
2002, with about 70% out of 14.3 million homes connected at the speed of over 2
Mbit/s.
In 2002, there were six operators providing broadband services in Korea. The
market share leader was Korea Telecom (KT), with approximately 45.8% market
share (4.5 million subscribers), followed by Hanaro Telecom with approximately
28.6% of the market and Thrunet with approximately 13.1%. of the market. In
terms of technology, KT primarily uses Digital Subscriber Line (DSL). Hanaro
uses a mix of cable and DSL. Thrunet service is mainly provided through cable
modem.
Communications services improved dramatically in the 1980s with the assistance
of foreign partners and as a result of the development of the electronics industry.
The number of telephones in use in 1987 reached 9.2 million, a considerable
increase from 1980, when there were 2.8 million subscribers (which, in turn, was
four times the number of subscribers in 1972).
The Japanese established a radio station in Seoul in 1927; by 1945 there were
about 60,000 radio sets in the country. By 1987 there were approximately 42
million radio receivers in use, and more than 100 radio stations were
broadcasting. Ownership of television sets grew from 25,000 sets when
broadcasting was initiated in 1961 to an estimated 8.6 million sets in 1987, and
more than 250 television stations were broadcasting.
Indian investment in ROK up to 2010 is estimated to be about $1billion.

During first year of CEPA in 2010, the bilateral trade between India and
Republic of Korea increased by 40% to USD 17.10 billion as compared to
2009. Indian exports rose by 37% while Korean exports increased by 42%.
ROLE OF THE GOVERNMENT

Government nurtures the electronics industry in Korea in at least four ways.
It provides a legislative basis for growth of high-technology industry
through means such as national banking regulations, low-interest loans,
tax
incentives,
and
duty-free
import
of
selected
capital
goods.
It promotes education and R&D for high-tech industry by providing direct

financial support to public and nonprofit institutes, universities, and other
educational institutions, primarily through the Ministry of Science and
Technology (MOST); the Ministry of Trade, Industry, and Energy (MOTIE);
and the Ministry of Information and Communication (MOIC). Such support
often involves partnering with both established and emerging firms in costsharing
new
product
or
technology
development.
It funds infrastructure development, including highways and transportation

systems, rapid dissemination of Internet-type services, etc., and through
construction of "science parks." The most prominent of these is Taedok,
twenty miles outside Seoul. Infrastructure development still lags
manufacturing growth, however.
Specific Taxation Recommendations:
1. Implementation of GST by April 2012 Leads to Rationalize Indirect Tax

structure: 12% GST (8% Excise + 4% VAT) on electronics value chain.
2. If GST is delayed, then Zero CST on Electronic value chain should be
implemented.
3. Abolish Special Additional Duty (SAD) on Electronic components to avoid

Inverted Duty Structure.
4. Freeze the Excise duty rates due to weak and uncertain economic situation
5. Ensure green channel for import of raw material and components.
6. Continue incentives for large domestic consumers such as the IT/ITES
industries
7. As recommended by Empowered Committee, 4% VAT should be
implemented on all Electronic components and assemblies.
8. Zero duty on all inputs for manufacturer of Electronic components and
parts, including dual use inputs for all ITA-1 items.
9. Introduction of CVD & SAD on Silicon wafers in the last budget affecting
the cost-competitiveness of the domestic solar cell and module
manufacturers.
An Overview of the National Policy on Electronics
The key push under the National Policy on Electronics is to transform India into a global
hub
for
electronics
system
design
and
manufacturing
(ESDM).
Given Indias growing strength in chip design and embedded software and the increasing
importance of design in product development, India has great potential as an ESDM
annually by 2020.
Create an institutional mechanism for developing and mandating standards and
certification for destination.
The 14 objectives of the National Policy on Electronics are to:
1. Create an eco-system for a globally competitive ESDM sector in the country to
achieve a turnover of about US$400 billion by 2020, involving investment of about
US$100 billion and employment to around 28 million people at various levels.
2. Build on the emerging chip design and embedded software industry to achieve
global leadership in VLSI, chip design and other frontier technical areas and to
achieve turnover of US$55 billion by 2020.
3. Increase the export in the ESDM sector from US$5.5 million to US$80 billion by
2020.
4. Significantly enhance the availability of skilled manpower in the ESDM sector.

Special focus for augmenting post graduate education and to produce about
2,500 PhDs
5. electronic products and services to strengthen quality assessment infrastructure
nationwide.
6. Develop an appropriate security ecosystem in ESDM for its strategic use.
7. Create long-term partnerships between EDSM industry and strategic sectors like
defense, space, and atomic energy, etc.
8. Become a global leader in creating intellectual property in the ESDM sector by
increasing fund flow for R&D, seed capital and venture capital for startups in the
ESDM and nanoelectronics sectors.
9. Develop core competencies in sectors like automotive, avionics, industrial,
medical, solar, information and broadcasting etc through use of ESDM in these
sectors.
To implement the above objectives, the policy created establishes the National
Electronics Mission, a nodal agency for the electronics industry within the Department of
Information Technology, with direct interface to the Prime Ministers office, and renamed
the Department of Information Technology as the Department of Electronics and
Information Technology.
The policy is split into sections, including:
1. Human Resource Development
2. Developing and Mandating Standards
3. Cyber Security
4. Strategic Electronics
5. Creating an Eco-system for Vibrant Innovation and R&D in ESDM Sector
6. Nanoelectronics
7. Handling E-waste
Three of the most prominent sections (described in detail below) are:
Creating an Eco-system for Globally Competitive ESDM Sector
Promotion of Exports
Electronics in Other Sectors
OBJECTIVES
1. To create an eco-system for a large competitive ESDM sector in the
country to achieve a turnover of about USD 400 Billion by 2020 including
investment of about USD 100 Billion and employment to nearby 28 Million
people at various levels.
2. To build on the chip design and embedded software industry to achieve
global leadership, chip design and other frontier technical areas and to
achieve turnover of USD 55 Billion by 2020.
3. To boost the export in ESDM sector from USD 5.5 Billion to USD 80 Billion
by 2020.
4. To significantly give importance to availability of skilled manpower in the
ESDM sector. Special focus for augmenting post graduate education and
to produce about 2500 PhDs annually by 2020.
5. To develop and made an appropriate security ecosystem in ESDM for its
strategic use.
6. To create long-term partnerships between the two, EDSM industry and
strategic sectors like Defence, Space, and Atomic Energy etc.
7. To become a global leader in creating Intellectual Property (IP) in the
ESDM sector by increasing fund flow for R&D.
8. To develop core competencies in sectors as automotive, avionics,
industrial, medical, solar, Information and Broadcasting , through use of
ESDM in these sectors.
9. To use technology to develop and made electronic products to meet
domestic needs and conditions at affordable price points.
10. To expedite adoption of best practices in e-waste management practices.
To create specialized governance structures within Government to cater to
specific needs of the ESDM sector including high velocity of technological
and business model changes.
BIBLIOGRAPHY
www.etri.re.kr/eng/
en.wikipedia.org/.../Electronics_and_Telecommunications_Research_..
www.alacrastore.com/company.../Seoul_Electronics_Telecom-36301...
www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA292371
www.etri.re.kr/eng
timesofindia.indiatimes.com
www.ibef.org/attachdisplay.aspx?cat_id=447&art...
www.livemint.com/2010/05/.../LG-plans-new-products-for-Indi.htm
Indian_AEDE_Report.pdf
https://www.cia.gov/library/publications/the-world-factbook/.../ks.ht..
BB_1108_E_Branchenbericht-SdkoreaICT.pdf
mit.gov.in/content/public-consultation-2011
http://loksabha.nic.in/
www.indochamkorea.org
CommunicationsEquipment_1216 GP MATERIAL22-11-2011.pdf
NASSCOM_Annual_Report_2010-11.pdf
A
ON
South Korean and Indian Dairy Industry and

Product Market-A Comparative Study
Submitted to
In
Faculty Guide
Prakash Patel
Submitted by
1) Kedar Amdawadkar
2) Krutika Parmar
3) Priti Amin
4) Piyush Maheshwari
5) Dhruti Bhatt
6) Ragini Chauhan
107050592067
107050592068
107050592069
107050592070
107050592071
107050592072
MBA SEMESTER III/IV

MBA PROGRAMME
Ahmedabad
Most countries produce their own milk products; the structure of the dairy industry
varies in different parts of the world. In major milk-producing countries most milk
is distributed through wholesale markets. Milk is the largest segment of the global
dairy market, accounting for 35.2% of the market's total value. The global dairy
market grew by 3.2% in 2009 to reach a value of $299.7 billion. In 2014, the
global dairy market is forecast to have a value of $370.9 billion, an increase of
23.8% since 2009.
South Korea has the worlds 14th largest economy. The country has progressed
from basic industries such as cement, fertilizers and industrial chemicals, to
producing automobiles, electronics, iron and steel and shipbuilding and now to
computer and other technological products. The South Korean dairy market
generated total revenues of $3.7 billion in 2009, representing a compound annual
growth rate (CAGR) of 4.3% for the period spanning 2005-2009. Yogurt & from
age frails sales proved the most lucrative for the South Korean dairy market in
2009, generating total revenues of $1.9 billion, equivalent to 52.3% of the
markets overall value. The market potential for imported processed ingredients
looks good as the local industry lacks price competitiveness against imports,
even with very high import duties. Bakery and confectionery companies, the main
consumers of milk powder, have increased their purchases of imported products
to make cheese, yoghurt and ice cream. Imports of those products are expected
to continue to grow.
India has a modern economy with a large agricultural sector, diversified industry
and a relatively large and sophisticated financial and service sector. As Indias
population continues to expand and the middle class consumer lifestyle gains in
momentum, there will be increasing opportunities for foreign companies to supply
both commodity and higher-value niche food and beverage products. The dairy
industry plays an important role in the socio-economic development of India. The
dairy industry in India is instrumental in providing cheap nutritional food to the
vast population of India and also generates huge employment opportunities for
people in rural places. Trade in dairy products is very volatile, as dairy trade flows
can be affected by (a) overall economic a situation in a country, (b) fluctuations in
supply and demand, (c) changing exchange rates and (d) political measures.
Additional volatility is introduced by the fact that the global dairy market is
extremely concentrated in terms of buyers and sellers; hence, supply or demand
shocks are not easily absorbed. With demand for dairy products most rapidly
rising in regions that are not self-sufficient in milk production, volumes of dairy
trade are growing. Also the share of global dairy production that is traded will
increase as trade will grow at a faster pace than milk production.
This report represents the benefits and opportunities for both the countries and
their future scopes with respect to the dairy industry. Both the countries have a
sound developed dairy industry, and hence can trade and exchange their
resources for each others development.
INTRODUCTION OF INDIA
Demographics are the most recent statistical characteristics of a population.
These types of data are used widely in sociology, public policy, and marketing.
Commonly it includes gender, race, age, disabilities, mobility, home ownership,
employment status, and even location. Demographic trends describe the
historical changes in demographics in a population over time. Both distributions
and trends of values within a demographic variable are of interest. Demographics
are about the population of a region and the culture of people there.
SALIENT FEATURES OF INDIA

India occupies 2.4% of world's land area and supports over 17.5% of the world's
population. India has more land area than any country except the United States,
and more water area than any country except Russia, Canada and the United
States. Indian life revolves mostly around agriculture and allied activities in small
villages, where the overwhelming majority of Indians live. As per the 2001
census, 72.2% of the population lives in about 638,000 villages and the remaining
27.8% lives in more than 5,100 towns and over 380 urban areas.
INDIA
Demographics of India
Population of India, 1961-2003

Population:
1,210,193,422 (2011 est.) (2nd)
Growth rate:
1.41% (2009 est.) (93rd)
Birth rate:
22.22 births/1,000 population (2009 est.)
Death rate:
6.4 deaths/1,000 population (2009 est.)
Life expectancy:
69.89 years (2009 est.)
Male:
67.46 years (2009 est.)
Female:
72.61 years (2009 est.)
Fertility rate:
2.68 children born/woman (2010 est.) (82nd)
Infant
mortality
rate:
30.15 deaths/1,000 live births (2009 est.)
Age structure:
31.1% (male 190,075,426/female 172,799,553) (2009
0-14 years:
est.)
63.6% (male 381,446,079/female 359,802,209) (2009
15-64 years:
est.)
5.3% (male 29,364,920/female 32,591,030) (2009
65-over:
est.)
Sex ratio:
At birth:
1.12 male(s)/female (2009 est.)
Under 15:
15-64 years:
65-over:
Nationality:
Indian
Language:
Hindi
SOUTH KOREA
Year Population
Growth rate Age structure

014 years: 18.3% (male 4,714,103 / female
4,262,873)
2007 49,044,790 0.578%

17,346,594)
65 years and over: 9.6% (male 1,921,803 / female
2,794,698)
4,368,139)
2006 48,846,823 0.58%

17,250,862)
65 years and over: 9.2% (male 1,818,677 / female
2,678,914)
Age structure
014 years: 16.8% (male 4,278,581/female 3,887,516)
1564 years: 72.3% (male 17,897,053/female 17,196,840)
65 years and over: 10.8% (male 2,104,589/female 3,144,393) (2010 est.)
Growth
Birth rate: 9.8 births/1,000 population (2011 est.)
Total fertility rate: 1.28 children born/woman (2011 est.)
Death rate: 5.4 deaths/1,000 population (2011 est.)
Infant mortality rate: 4.24 deaths/1,000 live births (2010 est.)
Net migration rate: 0 migrant(s)/1,000 population (2010 est.)
Sex ratio
At birth: 1.07 male(s)/female
Under 15 years: 1.075 male(s)/female
1564 years: 1.038 male(s)/female
65 years and over: 0.69 male(s)/female
Total population: 0.99 male(s)/female (2011 est.)
Life expectancy
Total population: 81 years
Male: 75.56 years
Female: 82.28 years (2010 est.)
Religions
Nonreligious: 49.3%
Christianity: 26.3%
Buddhism: 23.2%
Islam: 0.1%
Other: 1.3%
Literacy
Definition: age 15 and over can read and write
Total population: 97.9%
Male: 99.2%
Female: 96.6%
Particulars
Rank
Currency
Trade organizations
GDP
GDP growth
GDP per capita
GDP by sector
Economy of India
9th (nominal) / 4th
(PPP)
1 Indian Rupee (INR)=
100 Paise
WTO, SAFTA, G-20 and
others
$1.70 trillion (nominal:
9th;
2010)
$4.45 trillion (PPP: 4th;
2010)
8.5% (201011)
$1,382 (nominal: 138th;
2010)
$3,608 (PPP: 129th;
2010)
Services
(55.2%),
industry
(26.3%),
Economy of South Korea

15th (nominal) / 12th (PPP)
South Korean Won (KRW)
APEC, WTO, OECD, G-20
PPP: $1.423 trillion (2010 est.)
Nominal: $1.007 trillion (2010
est.)
6.1% (2010-11)
PPP: $30,200 (2010 est.)
Nominal: $20,265 (2010 est.)
Agriculture (3.0%), industry
(39.4%), services (57.6%) (2008
Inflation (CPI)
Population
below poverty line
Gini index
Labour force
agriculture
(18.5%) est.)
(2010 est.)
9.72%
(September
3% (2010 est.)
2011)
37% (2010)
36.8 (List of countries)

478 million (2nd; 2010)
Agriculture
(52%),
Labour
force
industry (14%), services
by occupation
(34%) (2009 est.)
Unemployment
9.4% (200910)
telecommunications,
textiles, chemicals, food
processing,
steel,
transportation
Main industries
equipment,
cement,
mining,
petroleum,
machinery,
software,
pharmaceuticals
Ease
of
doing
134th
Business Rank
2% (2004 est.)
31.4 (2009)
24.62 million (2010 est.)
Agriculture:
7.3%;
industry:
24.3%; services: 68.4% (2010
est.)
3.3% (2010 est.)
electronics, telecommunications,
automobile
production,
chemicals, shipbuilding, steel
16th
FIRMS OF INDIAN DAIRY INDUSTRY

Mother Dairy Fruits & Vegetables Pvt Limited
Amul
Nestle India Limited
Britannia Industries Limited
Hindustan Unilever Limited
Karnataka Co-operative Milk Producers Federation Limited
Hatsun Agro Product Limited
India, Milk yield per cow, kg / year
Source: statinfo.biz- international economic statistics
LEADING COMPANIES OF SOUTH KOREA:

Bing Grae Co. Ltd.
Namyang Dairy Products Co. Ltd
Maeil Dairy Industry Co. Ltd.
Republic of Korea (South Korea), Milk yield per cow, kg / year
Source: statinfo.biz- international economic statistics
INDIAN DAIRY EXPORTS BY PRODUCT TYPES (2010/11)
Source: IUF Dairy Industry Research
ANALYSIS OF INDUSTRY WITH VARIOUS VARIABLES

1 PRODUCTION
INDIA
Emphasis on both cattle and buffalo milk
Buffalo milk has been preferred for its

high milk fat content.
Dairy cattle becoming more popular due

to their increased yields and shorter dry
periods
SOUTH KOREA
Grown to produce 2.5 million tons of raw
milk in 2002 from 48,000 in 1970.
Dairy cows increased rapidly until the early
1990s size per farm has also grown
quickly from under 10 cows per farm in
1985 to 47 cows per farm in 2002.
DOMESTIC CONSUMPTION
INDIA
SOUTH KOREA
Indian dairy production is growing at a
rate of about 4% per year, yet consumer
demand is growing at about double that
rate.
Farmers working directly with buyers from Milk consumption in Korea has also shown
rapid development.
the organized sector generally have
access to modern extension services due Per capita consumption grew from 4.6 kg
to 64.2 kg.
responded to increasing dairy prices.
Artificial insemination services are
expected to grow in the future, as the
government of India continues to develop
protocols for imported genetics products.
SUPPLY & DEMAND

INDIA
Indian family allocates 17 per cent of the

household food outflow on milk and milk
products.
The higher GDP growth rate, enhanced
income of rural households
It is estimated that the demand for milk
will grow at 7% per annum at current rate
of income growth, while the growth in
milk production is likely to continue at the
present rate of 4.4% in the near future.
SOUTH KOREA
In the first nine months of this year, U.S.
export shipments to South Korea were
valued at $174 million, up 85 % from the
previous year.
The United States became Korea's
number-one cheese supplier, with a share
of 45%, Overall sales are on pace to
approach $240 million this year.
With 75 % of the 16 supplier surveys
returned, the event generated 7,000 tons
(15.4 million pounds) of new business
worth an estimated $31.5 million over the
next 12 months
DAIRY TRADE POLICIES & IMPORT PATTERNS

INDIA
Most of the demand-supply gaps of

liquid milk requirements for urban
consumers were met by importing
anhydrous milk fat / butter and dry milk
powders.
In the 1990s, India started exporting
surplus dairy supplies, such as SMP,
WMP, butter and ghee. The Agricultural
and Processed Food Products Export
Development
Authority
(APEDA)
regulated the export and import of dairy
products till early 1990s.
India has recently concluded a tariff rate
quota to deal with US, EU and Australia
on imposing custom duty of 15% on
imports of SMP and WMP up to 10,000
tons and 60% on imports beyond this
level.
SOUTH KOREA
With the Uruguay Round WTO
agreement, Korea formally opened the
dairy market, provided that minimum
access (MMA) quotas, relatively low
within-quota tariff rates, and very high
over-quota tariff rates.
Rapidly growing import items include
cheese and formulated infant powder.
Cheese imports grew at an annual rate of
19% since 1995. In 2004, cheese
accounted for almost 40% of all dairy
imports by value.
At the other end of the spectrum,
formulated butter (which is about 70%
milk fats) has a single tariff of 8%.
Cheese imports have a single tariff of
36%. This tariff patterns account for the
high imports of cheese and formulated
butter fit to the imports of products such
as skim milk powder and butter. For
example, in 2003, Korea imported only
1380 tons of butter, but 13,161 tons of
formulated butter.
POLICY SCENERIO
INDIA
SOUTH KOREA
The total amount of milk produced has The first two are labeled as the Doha
more than tripled from 23 million tones
scenario and the Free trade scenario
back in 1973 to 74.70 million tones 26
and the third as the Domestic reform.
years later in 1998.
Under the Doha scenario, Koreas high
over-quota dairy product tariffs decline by
Since liberalization of the dairy sector in
50% by 2015 and the much lower within
1991, a very large number of private
quota tariffs and single tariffs decline by
sector companies / firms have, despite
25% by 2015.
MMPO, established dairy factories in the
country. The share of the total milk giving With a 50% cut for the high tariffs and a
out capability by private sector is 44% of
25% cut for the low tariffs, the resulting
total installed capacity of 73 MLPD
component tariffs in 2015 are 20.9% for
(Million Liters per Day) in the country.
fat and 25.9% for NFS.
India has been identified as among the

first 10 emerging markets in the world.
India has the vastest domestic market in
the world with over one billion consumers
- a majority of whom are vegetarians with
drinking of milk as habit.
. Although we are mainly focused on trade

policy, one important question involving
the Korean dairy market concerns any
possible improvement of the domestic
price support policy.
SALES VOLUME
INDIA
Being the worlds largest producer and
consumer of dairy products, India
represents one of most lucrative dairy
markets.
IMARC Group, one of the worlds
important research and voluntary firms,
finds that the sales of dairy products in
India will nearly double its size from INR
2.6 Trillion (US$ 60 Billion) to around INR
5.1 Trillion (US$ 115 Billion) by 2016.
IMARCs new report entitled Indian Dairy
Market Report & Forecasts 2011-2016
provides an analytical and numerical
insight into the Indian Dairy market.
SOUTH KOREA
Sales of all drinking milk products were
valued at nearly $3 billion in 2008. Plain
pasteurized milk accounted for nearly twothirds of sales value. Retail prices for fluid
milk products increased by 20 % since
August 2008 due to higher feed and
energy costs.
Sales of milk-based beverages with soy
content grew 2 % to a level of $282 million
in 2008.
Because most reduced fat milk is
consumed by adult consumers, the faster
growth of this product type is increasing
the share of adult consumption in milk
overall.
AVERAGE ANNUAL GROWTH RATE OF INDUSTRY

INDIA
SOUTH KOREA
The industry had been recording
an annual growth of 4% during the
period 1993-2005, which is almost 3
The average growth rate of the dairy
times the average growth rate of
industry in South Korean dairy market
the dairy
industry since
the
generated total revenues of $3.7 billion in
independence.
2009 and represented a compound
Milk production in India has developed
annual growth rate (CAGR) of 4.3% for
significantly in the past few decades
the period across 2005-2009.
from a low volume of 17 million tons in
1951 to 110 million tonnes in 2009.
Currently, the Indian dairy market is
growing at an annual rate of 7%.
INVESTMENT IN ADVERTISING & PROMOTION
8
INDIA
SOUTH KOREA
In South Korea the investment done in
In India the investment done in
advertisement and promotions of dairy
advertising & promotion of dairy
products by the respective companies is
products by the respective companies is
an average of 5-8% of their income and
an average of their 2.5% of their
the most of the advertisement &
turnover and most of the advertisement
promotions are done for Chocolates and
& promotion are done for butter and
Ice-creams.
cheese along with the ice-creams.
9
PRODUCT RANGE
INDIA
SOUTH KOREA
Curdled dairy products (like paneer, Chilled and shelf stable desserts, Chilled
rsagulla), non-curdled dairy products (like
snacks,
Coffee
whiteners,
peda, barfi, gulab jamun, ghee, kulfi),
Condensed/evaporated
milk,
Cream,
fermented dairy products (like masti dahi
Flavoured milk drinks, Flavoured powder
i.e.curd, shrikhand), other dairy products
milk drinks, Fromage frais and quark, Milk,
(like Milk, Tea, Coffee, Dairy Whiteners,
Powder milk, Processed cheese, Sour milk
Infant
Nutrition,
Malt
Beverages,
drinks, Soy beverages, Unprocessed
Margarine, Flavored Milk and Ice Cream).
cheese, Yoghurt.
10
REVENUE GENERATION
INDIA
SOUTH KOREA
Dairy market in India is quite huge and The South Korean dairy market generated
total revenues of $3.7 billion in 2009,
according to an estimate the unorganized
representing a compound annual growth
milk and milk product market is about Rs
rate (CAGR) of 4.3% for the period
470 billion while the market for processed
spanning 2005-2009.
organized dairy segment is only Rs
10000 corers. The market for traditional The performance of the market is forecast
to slow down, with an predictable CAGR
dairy products in India is estimated to be
of 4% for the five-year period 2009-2014,
US $ 10 billion, being the largest and
which is predictable to lead the market to
fastest growing segment of the Indian
a value of $4.5 billion by the end of 2014.
dairy industry.
11
R & D TECHONOLOGY
INDIA
SOUTH KOREA
The survey, which includes input from The first level in the R&D system is the
R&D personnel in companies ranging in
producer-university-researcher
joint
size from less than 50 to over 500
platform. This level is composed of the
employees and with dollar volumes from

less than $25 million to $75 million or
more, was designed to calculate the
conclusion procedure and level of R&D in
these companies.
12
DAIRY PRODUCTS CONSUMPTION

INDIA
13
National Dairy Product Processing

Technology R&D Sub Center, the Dairy
Product Test Institute of the National Dairy
Product Test Center, the Inner Mongolia
Institute of Dairy Industry, the Key
company Lab in the Inner Mongolia
Autonomous Region, Yili Group Postdoctorate Research Station and the Dairy
Patent Information Platform of Yili Group.
The Per Capita expenditure of drinking

milk is 250 gram per day. The dairy
products consumed by unorganized
sector are 65%. While the dairy products
consumed by organized sector is 40 to
50%.
SOUTH KOREA
Consumption of all drinking milk products
were valued at nearly $3.33 billion in
2010, improved by 3 % compared to 2009.
Milk is perceived as a drink for children to
consume as a source of calcium, so, with
the low birth rate, milk consumption per
capita has been declining, although it
improved slightly to record fractionally
optimistic volume sales growth from 2009.
PACKAGING
INDIA
SOUTH KOREA
Packaging materials used in Indian dairy Vacuum Packaging, Modified Atmosphere
industry are Tin Containers, Aluminum
Packaging, Oxygen Absorbers, Poly Clip
Foil, Paper Carton Boards, Glass and
System, Aseptic Packaging, ComputerPlastic Materials.
Aided Designing, Edible Packaging,
Vacuum Packaging, Poly Packaging,
Disposal of Packages, Recycling, and
Disposable Packaging
Recommended Packaging & Storage.
Packaged food sales grew by 2.5% from
2008 to 2009.
14
CONTRIBUTION TO ECONOMY
INDIA
The industry contributes about

115970 to the national economy.
SOUTH KOREA
The contribution is about 3% of the
Rs
national economy.
15
KEY DRIVERS & CHALLENGES IN THE MARKET

INDIA
Quality of raw milk, conditions of
transportation of milk and the lack of
skilled man power, the infrastructural
necessities to support the raw milk
sourcing
structure
are
are major
constraint.
Dairy Plants are not able to utilize their
entire installed capability (most of them
utilize only 50 to 80% of their installed
capacity). Also, plants have reported loss
of milk during giving out which may be
due to inadequate defense and lack of
awareness.
. In spite of India being the number one
milk producing country in the world, still
only about 35% of milk produced in India
is processed and that too is facing a
number of challenges in terms of
infrastructure,
prepared
efficiencies,
quality and promotion among other
aspects.
SOUTH KOREA
The six long shelf-life dairy-based

beverages in varied flavors (Forest Fruit,
Peach Passion, Strawberry), milk protein
level (1-2%), sweetness (sucrose 8-11%).
>>South Korea has relatively high tariff
levels and quota restrictions covering a
broad range of imported food products.
However South Korea is also proactive in
developing
bilateral
Free
Trade
Agreements (FTAs) with trading partners
and this offers new opportunities.
The long-lasting drive for efficiency and
quality assurance has drawn upon
advances
in veterinary
technology,
innovations in milking, transport and
processing. The availability of sustainable
energy supplies and meeting possible
global warming require further advances in
technology and adoption.
FUTURE BUSINESS OPPORTUNITIES

We examine two trade policy scenarios that allow for additional import access to
then Korean market in 2015 with no change in domestic policy and one domestic
policy scenario that eliminates domestic price support with no change in trade
policy. The first two are labelled as the Doha scenario and the Free trade
scenario and the third as the Domestic reform. Under the Doha scenario,
Koreas high over-quota dairy product tariffs decline by 50% by 2015 and the
much lower within quota tariffs and single tariffs decline by 25% by 2015. This
scenario is consistent with the kind of formulas under discussion in the current
negotiations under which the higher tariffs will be cut most (WTO, 2005; Jean et
al., 2005). The free trade scenario is provided for comparison as benchmark for
what would be expected if Korea were to completely open its border for dairy
product imports with zero tariffs. These scenarios impose no changes in the
government-set fluid milk price policy in Korea.
We expect such a policy to be maintained under WTO rules for reducing the
aggregate measure of support (AMS) or under the blue box (WTO, 2004; WTO,
2005). To translate the assumed reductions in product tariffs into reductions in
component tariff and implied price declines for fat and NFS in Korea, we
calculated the component tariff rates as weighted averages of product tariffs
(weighted by component shares in each product). With a 50% cut for the high
tariffs and a 25% cut for the low tariffs, the resulting component tariffs in 2015 are
20.9% for fat and 25.9% for NFS. This is equivalent to a 31.5% decline in the
implied tariff for fat and 39% decline in the implied tariff for NFS from the current
(2004) level of tariffs.
Although they are mainly focus on trade policy, one important question involving
the Korean dairy market concerns any possible reform of the domestic price
support policy. To gain some insight on this issue, we also investigate the regime
of no domestic price policy by asking how the market variables would change if
the government does not fix the price of raw milk. Note that the small country
assumption implies that component prices are insulated from any changes in the
domestic market.
FINDINGS AND CONCLUSION:
Demand of process quality dairy products is increasing in India.
Exports are expected to increase but not as much as domestic demand.
Demand of Ghee or clarified butter and value added products are set to
increase in near future.
The major factors that affect the export potential of milk and dairy products
are high cost of production, lack of information and marketing support.
The major factor that impact the quality of process milk products bis-a-bis,
the prescribed standards are quality of RM, condition of Transportation of
milk and lack of skill manpower.
Availability of Butter Milk Coolers (BMC), farm equipment and cold chain
infrastructure, to maintain the quality of milk, is not comparable to their
demand on the ground level.
There is a still a large gap in awareness and implementation of good dairy

farming practices in terms of good quality fodder, good agriculture
practices and appropriate Hygiene practices required to improve the
quality of RM.
Plants are not able to utilize their complete installed capacity (it utilizes 5080 %). Also, plants have reported loss of milk during processing which
may be due to lack of maintenance and awareness.
There is a visible gap in the demand and supply of skilled manpower at the
dairy plant level specially introduction of new products, quality and testing
personal.
There is a lack of modern manufacturing technologies or facilities required

to match the growing demand, improve operational efficiency and
maintain, the quality and hygiene levels.
Centralized information network which can assist the stack holders of the
dairy sectors in terms of market trends best practices etc, is presently
not available in the country.
The dairy processing industries of Korea is also facing intense competition.

Milk plants with lower productivity and profitability are closing and the
larger dairy plants whose scale of economy helps to increase the
productivity and profitability are sustaining in the market.
There is potential problem likely to be faced by the Korean dairy industry.

Because of the high tariff on milk powder, there has been increase in the
import of imitated milk powder. This can become a potential problem for
the survival of the Korean dairy industry.
Both South Korean and foreign goods and services often face regulatory
issues coming from extreme government oversight, which leads to
increased costs.
BIBLIOGRRAPHY
Referred
Date
18-2-2012
Web-Site
http://cms.iuf.org/sites/cms.iuf.org/files/Indian%20Dairy%20Industry.p
df
20-2-2012
http://www.businesswire.com/news/home/20111219005809/en/Resea
rch-Markets-Dairy-South-Korea---Industry
28-2-2012
http://www.dpi.vic.gov.au/agriculture/investment-trade/market-accessand-competitiveness/?a=29693
13-3-2012
http://www.researchandmarkets.com/reports/314150/dairy_in_south_k
orea.pdf
25-3-2012
df
01-4-2012
http://aic.ucdavis.edu/research/FPopenKordairy.pdf
03-4-2012
http://www.aavinmilk.com/dairyprofile.html
07-4-2012
http://www.nabard.org/fileupload/DataBank/TechnicalDigest/ContentE
nglish/issue9td-6.pdf
10-4-2012
http://www.indairyasso.org/
df
15-4-2012
http://www.technopak.com/resources/Food/PPP%20in%20Indian%20
Dairy%20Industry_Technopak_CII_Background%20Paper_May08,20
10%20pdf%20ver.pdf
22-4-2012
http://californiaagriculture.ucanr.org/landingpage.cfm?article=ca.v065n
02p66&fulltext=yes
A
ON
BANKING AND NON-BANKING SERVICES IN

SOUTH KOREA
Submitted to
In
Faculty Guide
Mr. Nirav Majmudar
Submitted by
1) Abhay Dhami
107050592073
2) Rashmi Nihalani
107050592074
3) Vihangini Shah
107050592075
4) Krutika Mohile
107050592076
5) Harshil Modi
107050592077
6) Maulik Shah
107050592078
MBA SEMESTER III/IV
MBA PROGRAMME
Ahmedabad
Executive summary
In the executive summary of South Korea and Indian Banking sector, we have
worked in this Global Project about the Economic overview of South Korea and
India, and also different banking parameters as per the secondary data available.
Economic Overview of the South Korea Country we have studied
Demographic Profile of the South Korea which includes Background , Age ,sex
ratio, languages, Life expectancy, growth, Literacy, religion.
South Korea is the 12th largest economy in the world, with a GDP
(PPP) of 1.459 trillion in 2010. South Korea is one of the fastest
growing economies from the 1960s to 1990s, and was termed as
one of the Asian Tigers, along with Hong Kong, Singapore and
Taiwan.
South Korea's economic growth relied heavily on its exports, due to a lack of
natural resources, and small domestic consumer market. This also makes them
the 7th largest exporter and 10th largest importer in the world. The South Korean
economy has also grown from one which is labor-intensive, to one which is more
capital and technology-orientated.
India, on the other hand, adopted an import-substitution policy since its

independence until the early 1990s. Since 1991, India has introduced wideranging economic policy reforms and is moving towards a market-driven
economy.
At present, India is the second fastest growing economy in the world. Both India
and Korea have been getting integrated with the world economy, enhancing their
role in the international economic order.
South Korea's growing economy is also one of the few countries which avoided
recession during the 2008 financial crisis. However, the country's progressive
economic growth could be impeded by its continued tension with North Korea.
Economic ties between North and South Korea were established in 1988, and
trade volume rose to $1.82 billion in 2008, making South Korea the second
largest trading partner of North Korea, after China. But constant conflicts
between the two nations have severed the economic ties between them.
Overview different economic sector of South Korea

South Korea is the 12th largest economy in the world, with a GDP (PPP) of 1.459
trillion in 2010. South Korea is one of the fastest growing economies from the
1960s to 1990s, and was termed as one of the Asian Tigers, along with Hong
Kong, Singapore and Taiwan.
South Korea's economic growth relied heavily on its exports, due to a lack of
natural resources, and small domestic consumer market. This also makes them
the 7th largest exporter and 10th largest importer in the world. The South Korean
economy has also grown from one which is labor-intensive, to one which is more
capital and technology-orientated.
South Korea's Industry Sector: - South Korea's agriculture contributes only 3

percent of the nation's total GDP in 2010 and employs 7.3 percent of the
country's workforce.
The industry of South Korea contributes 39.4 percent of the country's GDP in
2010.
Rice is the most important agriculture crop of South Korea. It made up 90 percent
of the total grain production, and supplies over 40 percent of the farmers'
income. However, rising farmers' wages and land values have made rice
costly to produce. With 16.58 percent o arable land, South Korea's agriculture
is also responsible for the production of crops such as barley, vegetables,
fruits and production of cattle, pigs,
Electronics boosted the South Korean economy in the 1980s, by becoming the
world's sixth largest manufacturer of electronic goods.
The automotive industry also plays a major role in the South Korean economy
today.
Services in South Korea contribute 57.6 percent of the nation's total GDP and
employs 68.4 percent of the workforce.
Overview of Business and trade at international level
South Korean economy and trade a brief history: 1945, South Korean
economy was mainly agricultural. In the following decades South Korea
developed light industry, consumer products and heavy industry.
At the beginning of the 21st century, South Korea is leader in the IT sector
thanks to the aids received by its government. Leading firms in this sector
are Samsung Electronics and LG Electronics.
South Korean economy and trade a brief history:
The biggest part of South Korean GDP is made up by the service industry
(about 55%)
The second most important South Korean is trade sector.
South Korean industries include: the textile and steel sectors
South Korean international trade Import and Export
Import South Korea imports mainly mineral fuels, electric and

mechanical equipment, iron and steel
Export South Koreas most important export partners are again China,
Japan, the European Union and the USA, and the products that South
Korea exports are: electric and electronic goods, machinery, vehicles, ship
and boats.
Overview of Industries trade and commerce
The Korean financial industry consists of three groups: (i) a central bank
(BOK); (ii) deposit money banks, including commercial and specialized
banks; and (iii) nonbank financial institutions (NBFIs), which include
development, savings, investment, insurance, and other institutions. The
Korea Development Bank and Export-Import Bank of Korea engage in
similar activities. Using Government funds, foreign capital, or funds raised
from the issue of special debentures, they provide medium- and long-term
loans or credit to key sectors such as (i) the export industry, (ii) parts and
components industry, (iii) high-technology business, and (iv)research and
development projects for developing new technologies.
Economic Geography
South Korea has a land area of 96,920 square km, with 16.58 percent of
arable land. The country's main agricultural crops are rice and barley. Other
product supplied by South Korea includes vegetables, fruits, root crops, cattle,
pigs, chicken, milk, eggs and fish. South Korea also enjoys few natural resources
such as coal, tungsten, graphite, molybdenum, lead and hydropower potential.
India and Korea have shared a close relationship since the establishment of
formal diplomatic ties in 1973. The last three and a half decades have seen highlevel exchanges and the signing of several crucial agreements leading to a
continuous strengthening of bilateral economic relations.
PESTEL ANALYSIS
PESTLE analysis of South Korea identifies issues that affect the countrys
performance through the prism of current strengths (strengths), current
challenges (weaknesses), future prospects (opportunities) and future risks
(threats).
The political landscape discusses the evolution of the political scenario in

South Korea in different periods.
o The economic, social, foreign and defense policies are considered in the
political landscape section.
o The social landscape covers the demographics, education and
healthcare scenario in South Korea. The social welfare policies of the
government along with the countrys performance in terms of healthcare,
income distribution.
o
The technological landscape discusses the structure and policies in

terms of Intellectual property, research & development, technology.
o The legal landscape examines the structure of the judicial system,

legislation affecting businesses, tax regulations, labor laws, trade
regulations and corporate governance in South Korea.
o The
environmental
landscape
in
South
Korea
environmental regulations and policies of the country
discusses
the
Bank is a lawful organization, which accepts deposits that can be

withdrawn on demand. It also lends money to individuals and business
houses that need it.
o The Bank of Korea (BOK) is the central bank of South Korea and issuer of
South Korean won. It was established on June 12, 1950 at Seoul, South
Korea.
Primary Purpose of banking.

o The primary reason of the Bank is to pursue price stability
o The central bank has to safeguard the value of the money by keeping
inflation low. Because the purchasing power of money depends on prices.
When prices rise, the same amount of money buys less than before.
Organization contains Monetary Policy Committee.
When the Monetary Policy Committee deems it necessary for the

implementation of monetary and credit policies, the Bank of Korea request
the FSS to perform an examination of a bank and other financial
institutions.
Functions Of South Korea Bank

o
Issuing Banknotes and Coins
o Formulating and Implementing Monetary and Credit Policy

o . Acting as the Banker's Bank
o Serving as the Government's Bank
o Operating and Managing Payment Systems
o
Managing Official Foreign Exchange Reserves
o Monitoring the Financial System and Assessing Its Stability

o Carrying out Economic Education
Banks of South Korea

central bank
o Nation wise bank
o Special bank
o Local bank
Types of Accounts:
o Savings
o Time Deposit
o Installment
o Services, Fees & Interest
o Credit Cards
o The Korea Travel Card (KTC)
o Sending Money Home
The Bank of Korea policy objective

The Bank of Korea Act provides that the sole purpose of the Bank is to contribute
to the sound development of the national economy by pursuing price stability
through the formulation and implementation of efficient monetary and credit
policies.
Recently, following the global financial crisis, the Bank of Korea has placed
greater emphasis on heightening the stability of the financial system.
Organization
The Monetary Policy Committee as the policy decision-making body, has the
right to deliberate and resolve on major matters concerning monetary and credit
policy and the operations of the Bank of Korea.
Resolutions at a Monetary Policy Committee meeting are adopted by simple
majority when there are at least five members present. Any member may submit
a proposal with the concurrence of at least one other member.
7 steps of opening a Bank account in India and South Korea
Financial Supervisory system in S. Korea prior to FSS
Korea financial supervisory system was largely fragmented, with the
banking, securities, insurance, and non-bank sectors individually managed and

regulated by a separate agency. Further the authority of supervision was split
into two governing entities,
1] The supervisory agencies and
2] The Ministry of Finance and Economy.
Establishment of Financial Supervisory Service (FSS)
After the end of the 1980s which marked a time of diversification in the financial
industry and businesses crossover into other financial sectors.
The financial supervisory system of past, which include the banking, securities,
and insurance sectors were each regulated by their respective supervisory
agencies, which was has longer fit to the innovations in the financial environment.
And as a result, the government established Financial Reform which is said as
the financial supervisory system.
Major Functions
Major functions of FSS are:
Supervision of financial institutions
Examination of financial institutions
Supervision of the capital market:
Supervision of accounting
Protection of customers of financial services
Introduction to Indian Banks
With the ongoing financial depression, the position of banks have become all the
more important in the course of working of the money market and hence the
economy of a nation. Banks over the years have become a major aspect of an
economy. However, over time banks have transformed from merely money
generating organizations to a multi tasking entity.
Types of Indian banks:

o Central bank
o Public sector
o Private sector
o Foreign sector
Functions of an Indian Bank:
Banks essentially perform the following functions:
1. Accepting Deposits from public/others (Deposits)
2. Lending money to public (Loans)
3. Transferring money from one place to another (Remittances)
4. Credit Creation
5. Acting as trustees
6. Keeping valuables in safe custody
7. Investment Decisions and analysis
8. Government business
Korea Development Bank
Since its establishment in 1954, the Korea Development Bank, the wholly-owned
Government Bank, has been the nation's leading provider of long-term funds to
major industrial projects.
Role of Banks in Indian Economy
The Banking sector has performed the key functions of providing liquidity
and payment services to the real sector and has accounted for the Bulk
of the financial intermediation process.
Over the years, over 30-40% of gross household savings have been in the
form of bank deposits and around 60% of the assets of all financial
institutions accounted for by commercial banks.
Important landmark in the development of banking sector in recent years has

been the initiation if reforms following the recommendations of the first
Narasimham Committee on Financial System
By reviewing the strengths and weaknesses of these banks, the Committee

suggested several measures to transform the Indian banking sector from a highly
regulated to amore market oriented system and to enable it to compete effectively
in an increasingly globalised environment
While comparing the total gross domestic saving across India and South
Korea during the period 1999-2004. The gross domestic saving is high in South
Korea (an average 130.66), while in India 104 so South Korea is better than India
In the Structure of Banking Systems Bank Assets/GDP are 97.70 and in India
47.55 so the South Korea is better than India .In % of Bank Assets Government
Owned India is 1st rank in all over world where South Korea is 15th rank.
In performance of Banking Systems South Korea is again better than India. In
ROE Indias rank is 38 where in South Korea is 5.compare to ROA Indias rank is
41 where South Korea is on 10th position so overall performance is good in South
Korea.
The Structure, Scope, and Independence of Bank Supervision is better in South
Korea compare to India.
Comparative information presents information on the frequency of on-site bank
examinations. We have no direct information on the scope of bank examination.
Korea Development Bank
Korea Development Bank was, establishment in 1954 the wholly-owned
Government Bank, has been the nation's leading provider of long-term funds to
major industrial projects. Moreover, since the financial crisis in Korea in late 1997,
the Bank has been at the epicenter of the financial reform and bank-led
restructuring of domestic corporations. KDB plays a leading role in supporting
trade finance, as well. KDB was ranked the "Best Asian Sovereign Borrower" by
"Euro money" in June 1999
Korean investments in India

Korea accounts for about 2.64% of total FDI inflows, amounting to US$ 2.601
billion (excluding amount approved for ADRs/ GDRs).
The main sectors attracting foreign direct investment from South Korea are
transportation industry accounting for over 1/3rd of the share, fuels (power & oil
refinery), electrical equipment (computer software & electronics), chemicals
(other than fertilizer) and commercial, office & household equipments.
Indian investment in Korea
With the growing amount of globalization and liberalization, not only Korean
companies are making their presence felt in India, Indian firms too are
establishing themselves in Korea.
The U.S. goods trade deficit with Korea was $13.1 billion in 2011, up $3.1 billion
from 2010. U.S. goods exports in 2011 were $43.5 billion, up 12.0 percent from
the previous year. Corresponding U.S. imports from Korea were $56.6 billion, up
15.9 percent. Korea is currently the 7th largest export market for U.S. goods.
Business opportunities in future

o The Future of Money
o Preparing for future banking crises
o South Korean banks look beyond their borders
o Government action
Audit committee of Indian banking
Introduction
The real sector reforms were felt to restructure the Indian banking industry. The
reform measures necessitated the deregulation of the financial sector, particularly
the banking sector. The RBI had proposed to from the committee chaired by M.
Narasimham, former RBI Governor in order to review the Financial System
viz. aspects relating to the Structure, Organizations and Functioning of the

financial system. The guidelines that were issued subsequently laid the
foundation for the reformation of Indian banking sector.
The main recommendations of the Committee were: i.
Progressive reduction in Cash Reserve Ratio (CRR)
ii.
Phasing out of directed credit programmers and redefinition of the priority

sector
iii.
Deregulation of interest rates so as to reflect emerging market conditions
iv.
Imparting transparency to bank balance sheets and making more

disclosures
v.
Giving freedom to individual banks to recruit officers
vi.
Inspection by supervisory authorities based essentially on the internal

audit and inspection reports
Reduction of SLR and CRR

The Narasimham Committee had argued for reductions in SLR on the grounds
that the stated government objective of reducing the fiscal deficits will obviate the
need for a large portion of the current SLR. Similarly, the need for the use of
CRR to control secondary expansion of credit would be lesser in a regime of
smaller fiscal deficits.
The committee offered the route of Open Market
Operations (OMO) to the Reserve Bank of India for further monetary control
beyond that provided by the (lowered) SLR and CRR reserves.
Some problems with the stated aim of reducing SLR and CRR are:
1. The supporting condition of smaller fiscal deficits is not happening in
reality
2. Open market operations have not been used to any significant extent in
India for monetary control. The time required for gaining experience
with the use of such operations would be much more than 5-6 years.
3. A commitment to a unidirectional movement of these vital controls

irrespective of the effects on, and the response of, other economic
factors (such as inflation), would be unwise.
Conclusion and Suggestion
The main aim of this Global Country Study Report is to explore the Country South
Korea and Find out Opportunity for the Banking Industry in South Korea for Indian
.For this we have divided this report in two parts; in first part we have focus on
economic overview of the South Korea and in second part we have focus on
Banking sector in South Korea and future opportunities available there.
At the end of first part of this report we found that an Economic condition of South
Korea is very impressive as compared to India. South Korea is 15 th ranked world
economy and is ranked 12th based on purchasing power. So there is more
opportunity for companies to sell their products. As their purchasing power is high
they can able to buy more products in certain amount. The South Korean recent
GDP based on 2011 est. is 3.9% and having the growth rate is 6.1%. South
Korea is having high Share from service sector in GDP that is positive sign for an
economy.
South Korea has a remarkable export activity; as per 2011 estimates South
Korea is ranked 7th in Global Export with $558.8 billion Export made by South
Korea. The products which South Korea mainly exports are semiconductors,
wireless telecommunications equipment, motor vehicles, computers, steel, ships,
and petrochemicals. Thus, we can find here that South Korea is economically
reach country and it economy is growing in a high rate.
South Korea is having good business relations with India. Many Korean
companies started entering the Indian market aggressively and, within a short
period of time, many of them became household names in the country. At
present, many Korean enterprises such as LG, Samsung, Hyundai etc., have not
only established their presence but have been able to diversify their businesses
to various sectors in the economy.
Economic relations between India-Korea have strengthened over the years.
Currently the trade and investment between the two countries is low compared to
the size and structural complementarities of the two economies. There has been
changing demand structures and comparative advantages of both economies in

complementary sectors and so the trade between the two countries increases.
Indias exports mainly low value-added and industrial products while Indias
imports from Korea largely consist of relatively high value-added products.
Comparative advantage at both the aggregated and disaggregated levels shows
that Korea has been specializing in a few products which are highly competitive
as Indias exports have been more diversified.
While studying the banking sector of South Korea we came under a conclusion
that opening a bank account in South Korea is comparatively easy then Indian
banks. As we have complicated procedure for opening account in India.
Woori Bank is planning to establish their banks in Chennai till year end.
The Future of trade between Gujarat and South Korea is bright as Gujarat has a
good leadership of Shri Narendrabhai Modi and convenient environment for the
foreign companies who willing to enter into the Gujarat
We lastly conclude that Banking Performance is more effective and efficient in
South Korea.
BIBILIOGRAPHY
http://eng.bok.or.kr/broadcast.action?menuNaviId=1628
http://www.korea4expats.com/article-opening-a-bank-account.html
http://www.theasianbanker.com/bankmetrics/ab500/2011-2012/asia-pacificlargest-banks
http://ecos.bok.or.kr/flex/EasySearch_e.jsp
http://www.theasianbanker.com/#india
http://ecos.bok.or.kr/jsp/use/economyinfo_e/InSideEcoInfo.jsp
A
ON
POLITICAL ENVIRONMENT OF SOUTH KOREA

Submitted to
In
Faculty Guide
MRS PREETI SINGHAL
Submitted by
1) Dhaval Sonagara
2) Haiderkhan Pathan
3) Dhara Shah
4) Dharmendra Parmar
5) Arti Rajput
6) Hirali Pancholi
107050592079
107050592080
107050592081
107050592082
107050592083
107050592084
MBA SEMESTER III/IV

MBA PROGRAMME
Ahmedabad
Political overview of South Korea
Korea is governed by a directly elected President and a unicameral National

Assembly that is selected by both direct (90%) and proportional (10%) elections.
The president serves a single five-year term. National Assembly legislators are
elected every four years. Kim Dae-jung was elected president in December 1997.
The last National Assembly election was held in April 2000, and the last regional
elections, which select mayors, governors and other local government officials,
were held in June 1998. The next presidential election will be in late 2002, and
the next National Assembly election will be in 2004. The next regional elections
will be in June 2002. As of mid-July 2001, the ruling Millennium Democratic Party
had 115 seats in the 273- person National Assembly. The opposition Grand
National Party held 132 seats followed by former Prime Minister Kim Jong-Pils
United Liberal Democrats (ULD) with
20 seats. Six seats were held by
independents and members of minor parties.
The new conservative president, Lee Myung-bak, took office after winning the
presidential elections in a landslide victory since March 2008. Two months later,
his conservative Grand National Party won the majority of seats in the National
Assembly. In combination with other conservative parties, there is now a clear cut
conservative majority that makes it much easier for the government to implement
its policies than was the case for Lees predecessor, Roh Moo-hyun (2003
2008), who lacked or had only unstable majorities. During his election campaign,
Lee made dramatic promises to undo all regulations enacted during the the lost
decade of leftist rule. However, changes have thus far been incremental. Among
the Lee administrations strong points have been the handling of the global
economic and financial crisis.
After an initially slow reaction government introduced a very significant fiscal

stimulus package equivalent to 6.1% of GDP and the OECDs largest fiscal
stimulus package proportional to local economy size. The government was also
successful in negotiating a dollar swap agreement with the United States and
which re-established foreign investors assurance and arrested the massive
outflow of capital from Korea during the financial affright. Korea benefited from
relatively rigid financial regulations for mortgages and the presence of risk-averse
banks that held back debt on their books stemming from the financial crisis of
1997 1998.
The government prevented the bursting of the domestic real estate bubble in
Korea, although inflated real estate prices remain a major potential source of
instability. And Finally, pragmatic currency policies that allowed a dramatic
depreciation of the Korean currency helped Korean exports which playing the
most important role in the nations recovery. Since the crisis, green growth has
taken prime place as one of the governments new slogans and President Lee
can be credited for shifting attention towards environmental issues that had long
played no role in a Korean politics.
Apart from goals such as support for environmentally friendly and ecological
technology and this drive also includes issues such as the expansion of nuclear
energy and huge and big construction projects such as river restoration and dams
etc. Respected President Lee has also formulated the goal of Kukgiok (literally,
a country with a good character) which aiming to promote Koreas reputation and
soft power in the world by hosting international events like G-20 meeting in
November 2010, and by increasing spending for the development assistance. He
has continued free-trading policies of his precursor which seeking in particular to
sign trade agreements with the giant United States and the European Union in
order to secure export markets for Korean products and embarked on a foreign
policy initiative focuses at securing the supply of natural resources for the
resource-poor Korea. However, the countrys relationship with the North Korea
deteriorated dramatically as the Lee administration reduced aid to the North and
while the North tested long-range missiles and even conducted a huge nuclear
test in 2009.
Lees governance style and tactics is usually compared by his supporters to that
of a corporate chief executive officer, while being deemed authoritarian by his
opponents his decisiveness seems to come across well with Koreans while
Critics, however, point out that his administration is unwilling to acknowledge

criticism unless it becomes overwhelming and as during the objections against
U.S. beef imports. He is also criticised for trying to crush opposition, for example
by determining the personnel policies at public broadcasting companies and by
changing the law to allow rigid newspapers and other corporations to elaborate
into the broadcasting sector. The suicide of former President Roh on February
25, 2009, amongst investigations of corruption against him and his family raised
questions about the independence of the judiciary and further aggravated the
hostility between governing and opposition party. The opposition accused the
government of using the prosecutors office to discredit Roh and demolish the
opposition with unproven allegations.
The Lee administration is often credited for streamlining the bureaucratic system
by merging and sometimes downsizing ministries and government agencies.
These policies of advancement (Seonjinwha) have the goal of building a smaller
but more effective public sector, which is modeled after the management of a
private company and impedes private business initiative as little as possible.
However, there are already some indications that this downsizing strategy is
running into difficulties. For example, after the calamitous handling of the
objections against the import of U.S. beef in 2008, Lee re-established the position
of senior officer for public relations in the Blue House (South Koreas executive
office), one of the positions he had got rid of. The administration has also been
heavily criticised for its response to the sinking of the Korean Navy ship Cheonan
in March 2010. Civil society organizations have lost significant influence over the
last two years, a trend that has contributed to a degradation of democratic quality.
Democratic processes have been weakened, under the justification that progrowth policies must be quickly and expeditiously implemented. Political
discussions and civil society references have taken a back seat as the
government has dramatically cut spending and deserted consultations with
NGOs. The government is particularly unfriendly towards labour unions.
Political System of South Korea

Thus the above mentioned lines do show that what is the exact political system
of both the mentioned countries India and South Korea and thus the mentioned
things show that a political system of South Korea is usually based on a Republic
form of government with the President as Chief of the State and the
Prime
Minister as the Head of Government. And so the Powers of the government is

shared between the executive and legislature as well as judiciary. The Cabinet
comprises of a council of ministers who are being appointed by the President on
the proposal of the Prime Minister. Although
the political system of South Korea
continues to suffer from the aftermath of several years authoritarian rule.

The Executive:
The executive is headed by the President, followed by the Prime Minister and the
Cabinet And the President is the main
Head of State who is been elected by
popular vote for a solitary term of five years and the Prime Minister is a Head of
Government who is been appointed by the President with an approval of the
National Assembly. The Deputy Prime Ministers are too appointed by the
President on the suggestion of the Prime Minister. The Cabinet consists of the
State Council who is been appointed by the President on the Prime Minister's
suggestion of the Prime Minister. Usually the Executive functions are being
performed by the President while the Prime Minister's tasks involves the
supervision of administrative functions of the ministries.
The function of the Cabinet members is to act on policy matters and is
answerable to the President. The current position of the ministries involves the
present President of South Korea Roh Moo-hyun and the Present Prime Minister
Han Duck-soo.
The Legislature
The legislative branch includes the unicameral National Assembly and
the
members of which are being elected for a four-year term. There are 299
members in the National Assembly out of which 243 members are in solitary seat
constituency and 56 are being elected by relative representation.
Judiciary
The judiciary in South Korea is sovereign of the Executive and the Legislature.
The judiciary is been made up of the three courts which are Supreme Court,
appellate Court and the Constitutional Courts. The Supreme Court is been
considered
the highest court in the judiciary and the justices of which are
appointed by the President on the approval of the National Assembly. The

Constitutional Court justices are being appointed by the President in part based
on the nominations by the Chief Justice and National Assembly.
Major political parties of South Korea include:
The below mentioned are the main political parties working at present in the
South Korea
Democratic Labour Party or DLP
Democratic Party or DP
Grand National Party or GNP
People-First Party
Uri Party
The other key ministers of the south Korea includes
Industry, commerce, and energy : Kim Young-joo
Defence Minister : Kim Jang-soo
Foreign affairs and trade Minister : Song Min-soon
Labour Minister : Lee Sang-soo
Health and welfare Minister : Rhyu Si-min
Construction and Transportation : Lee Yong-sup
Government administration and home affairs : Park Myung-jae
Information and communications : Rho Jun-hyong
Minister of Justice : Kim Sung-ho
Planning and budget Minister : Chang Byoung-wan
Unification Minister : Lee Jae-joung
Thus this is the whole of political system of the south korea
which is been
mentioned well as above. For further studies we will discuss now the political
system of the india which can be mentioned as under.
Political System of India
The constitution of the Indian political system came into force on 26 November
1950 and advocates the trinity of justice, liberty and equality for all citizens.
The executive branch
The main head of state in India is the President. The President can declare a
state of emergency which enables the Lok Sabha to extend its life beyond the
normal five-year term. Almost
4,500 members of the national parliament and
state legislators are eligible to vote in the election of the President. The Indian
Presidency has recently attracted special attention because for the first time a
woman now occupies the role of the president: Pratibha Patil , who was formerly
governor of the northern Indian state of Rajasthan.
There is also the post of Vice-President who is elected by the members of both
houses of parliament. The Vice-President chairs the upper house called the
Rajya Sabh. The head of the government is a Prime Minister who is been
appointed by the President on the proposal of the majority party in the Lok
Sabha. Currently the Prime Minister of india is Manmohan Singh . Thus later on
Ministers are appointed by the President on the counsel of the Prime Minister
and these ministers cooperatively comprise the assembly of Ministers.
The legislative branch
The maximum size of the Lok Sabha is 552 members which is made up of up to
530 members from the states of India, 20 members from the Union Territories
and two members to represent the Anglo-Indian community if it does not have
adequate expression in the house according to the President.Currently the size of

the house is 545 which is made up of 530 elected from the states, 13 elected
from the territories, and two nominated from the Anglo-Indian community. Each
member except the two nominated ones represents a geographical singlemember district as in the British model for the House of Commons.
Lok Sabha
Each Lok Sabha is created for a five year term, after that it is automatically
dissolved if not extended by a announcement of Emergency which may enlarge
the term in one year increments. This is
happened on three occasions: 1962-
1968, 1971 and 1975-1977.

Rajya Sabha
The upper house in the Indian political system is the Rajya Sabha or Council of
Statesthe Rajya Sabha has up to 250 members and
12 of these members are
chosen by the President for their expertise in specific fields of art, literature,
science, and social services and
ones. The house
these members are known as the nominated
currently comprises of
238 members which are
elected
indirectly by the state and territorial legislatures in proportion to the unit's

population.
Political parties
In India the
political parties are either a National Party or a State Party. To be
considered of a National Party the party must be recognised in four or more

states and to be either the ruling party or in the opposition party in those states.
The parties are the congress and bhajap.
Overviews of Business and Trade at International Level
We have also included the overall view of the business and trade at international
level. The main determinant of whether a country imports or exports the product
is the price of the product . The overall value of the importing good and the world
price and home country price are also part of our study for the matter of project
and
we have also considered some areas like what are the tariffs and quotas
for the purpose of making an international trade
The other deliberation we have taken while making the report was the economic
profiles of both the country India and Korea
also the various trade policies
proffered by both the countries which affects the international trade of both the
countries The other thing for the part of report which is taken in to mind is the
investment of the countries in the other countries of the world and also in the
relative country .
India-Korea Investment Relations
We have also studied the various investments of the countries like the Korean
investment in India and the Indias investment in Korea
Economic reforms,
offered a favourable investment environment for potential foreign investors,

including some of the
Korean companies. Many Korean companies started
entering in the Indian market aggressively and, within a very short span of time,
many of them became household names in the country and captured a very
good and strong position in the market. At present, many Korean companies
such as LG, Samsung, Hyundai etc., have not only recognized their presence but
also
have been able to diversify their businesses to various sectors in the
economy and thus they have become a part of the Indian market.
Gujarat Korea Trade
South Korean representative shows the interest in partnering the Gujarat state
in auto, shipping, electronics and knowledge sectors. And thus by expressing the
interest in partnering with the Gujrat in the sectors of auto, shipping, Electronics
and knowledge industries MR.Kim asked chief minister to establish trade
relationship especially between gujrat and the south korea . and so he invited
MR. Narendra Modi to visit his country in order to have some healthy relationship
to develop ship building industries alongside 1600km in the Long coastline of the
state. He said that his government would greet the latest technology from south
korea for this project
He also called upon the Korean companies to set up their ventures in electronic
zone of Gandhinagar and Dholera
International Business and Trade

The main determinant of whether a country imports or exports a product is price.
Thus we have taken in to considerations the various price.World price is the price
prevailing in world markets and is the price at which we can sell or buy goods.
Domestic price is the price in our country without trade. Ignoring carrying costs, if
the world price is greater than domestic price before trade, then we will export the
good. If the world price is less than domestic price before trade, then we will
import the good. Trade allows us to buy goods more cheaply from international
businesses and sell them at a higher price than if we were restricted to the
domestic market.
Strategic Outlook on South Korean politics
In the coming years, South Korea might gonna face a number of more or less
urgent challenges. The biggest challenge probably is the further consolidation
and deepening of a democracy. While formal democratic institutions in Korea are
relatively static and whatever necessary expansion of civil and political rights has
taken a back seat in the last two years.
The current president, Lee Myung-bak, shows little bit restraint in using the
excessive executive powers yielded to the Korean president by the constitution
which might affect the decision making process. Looking to this aspect, it seems
of very significant to strengthen the political parties and the party system.
likewise, the Korean government has to be very careful not to deteriorate from
being simply business friendly into a chaebol republic in which policies are
designed to suit a few large business accumulates. Over influence of the
executive over public broadcasters is concerning, as are regulations that require
resident registration numbers to be posted on the Internet and Legitimate

concerns about the low level and sometimes even denigrator character of political
discussions should not be countered by aspersion suits but rather by delivering
and improving democratic education in schools, universities and throughout the
society. A second major issue concerns economic policies. While the countrys
crisis-management strategy has successfully stabilized very well in Korea in a
short run which creates challenges for the future.
The recovery has been pushed by exports and government spending, making a
quick exit strategy problematic. Higher interest rates and a balanced budget could
potential enough to push Korea back into recession. Higher interest rates would
also accelerate the appreciation of the Korean currency in a way and
undermining export competitiveness. Then again, loose monetary and fiscal
policies would definitely further inflate asset bubbles which particularly in the real
estate sector. Two options are hence available.
First, Korea could extend its expansive monetary and fiscal policies at the same
time strengthening the regulation of financial and real estate markets in order to
deflate asset price bubbles.
Second, Korea could constrain monetary and fiscal policies and follow out
controls on capital inflow that will prevent further appreciation of the won and a
foreign-capital-driven inflation of stock prices. The crisis recovery strategy has
also left the economys structural problems Not having come in contact, including
the oversized significant construction sector and the over dependence on large
business accumulates that often earn monopoly rents in the domestic market
which need to be evaluated. While the chaebol system has been really successful
in rapid adoption of new products, technologies and digitalisation and it lack the
capacity for the revolutionary innovation that is often performed by small and
medium scale companies. With vast competition from China growing both in
labour-intensive and capital-intensive production sectors the chaebol economy
will run into troubles.
Third, very significant aspect environmental issues have finally entered the
political mainstream, to a great extent government promoting its green growth
strategy. Looking to that aspect, the government should clarify the conflicting
aspects between the badly need for sustainable development at the same time
the focus on quantitative growth seen, example in a 747 vision economic plan.
And more, the government should avoid using the green-growth label to green
wash which are environmentally controversial projects such as real estate
developments in a green belt areas. Furthermore, the government should also
change the regulatory framework to provide handsome incentives for energy
conservation and environmentally friendly behaviour and practices. Finally, some
international community should gives pressure on Korea to admit its status as a
fully developed G-20 country, which would imply a move into of the Kyoto
protocol and a commitment to reducing CO2 emissions in the environment.
Fourth, the Korean government needs to address the comparatively low labormarket participation rates and particularly among women. This will require
improving the public infrastructure in a way as to allow women to combine
parenthood and work both. There is also an very much required for the
government to address the problems of the working poor and of unstable working
conditions. The government should make available public housing and also help
to strengthen the market for rental apartments. In order to reduce the heavy
burden of then educational costs, the government should definitely increase
public spending for education and act out clear rules for private education
institutions and provide more grants to university students in a significant manner.
Fifth and last, Korea is however searching for its new role in the international
politics. For example, the country has not yet established a clear cut agenda for
its G-20 participation and involvement. Korea has voiced mistrust about some of
the core projects of the G-20, such as the international coordination of financial
regulation and the reduction of trade surpluses etc. up to now, the Korean
government has seemed simply to enjoy the countrys increasing reputation in the
world economy; even so, it should open more energetic discussions with societal
actors and academics on the significant contribution Korea might make in solving
global problems like financial market instability, global imbalances and climate
change. Korea has made remarkably well progress in the field of development
cooperation with the various countries on various aspects but the quality of its
development assistance remains relatively low. An old concept of development
aid sustain, and much of the countrys assist remains in the form of tied aid and
Finally, the government should give up its ideological approach to North Korea
and adopt more practical policies. There is no any doubt that North Korea has a
militaristic and dictatorial kind of a regime that shows no respect at all for human
rights and is a really a danger to mankind and world peace. Nevertheless, the
policy of being tough on North Korea and cutting down human-centred aid has
only led to further impairment in a relationship between both regimes.
BIBILIOGRAPHY
www.korea.net
www.oecd.org/dataoecd/62/34/43707086.
Amnesty International, Report on Korea,

http://www.amnesty.org/en/region/south-Korea/report-2009.
www.foreigntradepolicy.
www.economywatch.com
www.en.wikipedia.orgs
A
ON
INTERNET INdUSTRy IN SOUTH KOREA

Submitted to
In
Faculty Guide
Mr. Yogen Shah
Submitted by
1) Raju Thanth
2) Nandan Bajani
3) Sapan Shah
4) Diptesh Thakore
5) Mikin Chauhan
6) Ketul Pandya
107050592085
107050592086
107050592087
107050592088
107050592089
107050592090
MBA SEMESTER III/IV

MBA PROGRAMME
Ahmedabad
Introduction:
Internet is certainly the most unique and greatest gift of technology to mankind.
Internet has made life so easier for us, that today we cant think our life without it
even for a minute. Internet is useful for both Individuals and Business. E-mail to
E-commerce Internet plays an important role for Businesses and Individuals.
Internet is emerged as an internet industry in past few years and plays an
important role in the economy of the most of the Countries. After watching the
growth of Internet Industry in the various countries economy and Individuals
increased dependence on this Internet Industry, we have decided the Internet
Industry for Our Global Country study report.
The Internet Industry is most relevant with our Country South Korea. As South
Korea is a country which is leader in technological and Internet related
development in the world. South Korea has emerged to become the world leader
in Internet connectivity and speed. The government of South Korea had
established policies and programs that facilitated a rapid expansion and use
of broadband. South Korea leads in the number of DSL connections per head
worldwide. It is estimated that South Korea has over 2 million Internet addicts,
about 8.5% of the Korean web users. South Koreas Internet Connection is
fastest in the world with 1gbps Internet Connection Speed.
Report Insights:
This Global Country Study report focuses on the Internet Industry of South Korea.
This report divided in two major parts First part is on economy of South Korea
and second part is Internet Industry Specific. On the whole this Global Country
Study report focuses on economy of South Korea and Internet Industry Specific
Environment of South Korea which provides a useful insights to those companies
and entrepreneurs want to start there businesses in South Korea in Internet
Industry.
Demographics of South Korea:
The population of South Korea is 48,754,657. The Age Structure of South Korea
is like this 0-14 years: 15.7%, 15-64 years: 72.9%, and 65 years and over: 11.4%.
Population growth rate in South Korea is 0.23%. The most of the people speak
here Korean and English language. 97.9% population of South Korea is
educated. The ethnic group of South Korea is homogeneous.
Economic Overview of South Korea:

South Korea has a market economy which ranks 15th in the world by nominal
GDP and 12th by purchasing power parity (PPP), identifying it as one of the G-20
major economies. It is a high-income developed country, with a developed
market. South Koreas GDP is $1.459 trillion and GDP Growth Rate of South
Korea is 6.1%. Its GDP Composition by sector is like Agriculture: 2.6%, industry:
39.3%, services: 58.2% this. 15% of Population of South Korea is below poverty
line. The South Korean economy's long term challenges include a rapidly aging
population, inflexible labor market, and overdependence on manufacturing
exports to drive economic growth.
Industries, Trade and Commerce:
The growth of the industrial sector was the principal stimulus to economic
development in South Korea. The most significant factor in rapid industrialization
was the adoption of an outward-looking strategy in the early 1960s. This strategy
was particularly well suited to that time because of South Korea's poor natural
resource endowment, low savings rate, and tiny domestic market. The strategy
promoted economic growth through labor-intensive manufactured exports, in
which South Korea could develop a competitive advantage. Government
initiatives played an important role in this process. The inflow of foreign capital
was greatly encouraged to supplement the shortage of domestic savings. These
efforts enabled South Korea to achieve rapid growth in exports and subsequent
increases in income. The main Industries of South Korea are Shipbuilding,
Automobile, Mining, Construction, Armaments.
The main objective of Korean trade policy has always been to promote structural
reform and efficiency. Expansion of high-technology industries, high value-added
exports and making Korea a northeast Asian business and financial hub are the
main priorities. Though Korea actively participates in the multilateral trading
system, like India, South Korea increasingly focused on regional and bilateral
trading arrangements after the Asian financial crisis. South Korea is an exportorientated country, with a total trade volume of 884.2 billion in 2010. This figure
also makes them the 7th largest exporter and 10th largest importer in the world.
Since 2003, South Korea has established its network of free trade agreements to
boost trade and economic ties with other countries.
Currently, South Korea has 5 FTAs in effect, 3 FTAs which has concluded
discussions, and 19 FTAs under negotiation and consideration. So far, the
biggest FTA of South Korea is the Korea-US Free Trade Agreement (KORUS
FTA) signed in 2007.
Total value of exports of Korea is US$466.3 billion. Primary export of Korea is
semiconductors,
wireless
telecommunications
equipment,
motor
vehicles,
computers, steel ships, petrochemicals Primary export partners are China (23.2
percent of total exports), US (10.1 percent), Japan (5.8 percent), Hong Kong (5.3
percent).
Total value of imports of Korea is US$ 417.9 billion. Primary imports of Korea
includes machinery, electronics and electronic equipment, oil, steel, transport
equipment, organic chemicals, plastics Primary import partners are China (16.8
percent of total imports), Japan (15.3 percent), US (9 percent), Saudi Arabia (6.1
percent), Australia (4.6 percent)
Economic Sectors of South Korea:
There are mainly three economic sectors in any country Agriculture sector,
Industrial sector, and Service sector. Agriculture sector: In comparison to the
industrial and service sectors, agriculture remains the most slow-moving
economic sectors in South Korea. The chief agriculture products in South Korea
are rice, barley, fruit, vegetables, cattle, pigs, chicken, fish and milk. As per the
2010 Estimates the Share of Agriculture Sector in GDP of South Korea is 7.3%.
Industry Sector: The industrial sector growth was the key stimulus to economic
development in South Korea. The country's main industries include automobiles,
electronics, steel products, semi-conductors, shipbuilding, and textiles. The
industrial sector accounts for 19.1% of country's work force. As per the 2010
Estimates the Share of Industry Sector in GDP of South Korea is 24.3%.
Services Sector: The service industries include restaurants, hotels, laundries,
insurance, public bath houses, health-related services, and entertainment
businesses. These services accounted for 19.7 percent of GDP in 1999, an
increase of 5.7 percent since 1989. As per the 2010 Estimates the Share of
Service Sector in GDP of South Korea is 68.4%.
Business and Trade at International level:

South Korea's international trade began in the 1960s when it started its export-led
growth development strategy, exporting mainly light and consumer goods and
labor-intensive products (toys, footwear, and clothing). Since the 1990s, it has
reduced the exports of such items in favor of heavy-industry, capital-intensive,
and high-tech products Since the early 1960s, South Korea has targeted
developed markets (the United States, Japan, and Europe) for its exports. Since
the 1990s, it has also added the growing Pacific market (China, including Hong
Kong and Taiwan) to its target list. South Korea's shipbuilding industry now sells
ships to Japan, a major global shipbuilder in its own right. It is now a major
exporter of telecommunications and computer equipment and devices.
Trade Relationship with India and Gujarat:
IndiaSouth Korea trade relations has been relatively limited, although much
progress arose during three decades. Due to 1990s Economic reforms Many
Korean companies started entering the Indian market aggressively and, within a
short period of time, many of them became household names in the country. At
present, many Korean enterprises such as LG, Samsung, Hyundai etc., have not
only established their presence but have been able to diversify their businesses
to various sectors in the economy. The share of Korea in total actual cumulative
FDI received and approved by India were 3.56 and 5.18 respectively during 1991
and 1999.
The Future of Trade between Gujarat and South Korea is Bright. As Gujarat has
good Leadership of Shri. Narendrabhai modi and convenient environment for the
foreign companies who willing to enter into the Gujarat. Recently During a meet
with CM of Gujarat representative from Korea shows their Interest in partnering
Gujarat in the sectors like auto, shipping, electronics and knowledge industries.
PESTLE Analysis of South korea:

Political Environment of South Korea is stable. Politics of the Republic of Korea
takes place in the framework of a semi-presidential representative democratic
republic, whereby the President is the head of state, and of a multi-party system.
Executive power is exercised by the government. Legislative power is vested in
both the government and the National Assembly. There are two major political
parties are there one is Grand National Party (GNP) and another is Democratic
Labor Party (DLP).
Economic Enviornment: For any countries economy if the dependence on
service sector increases, we can say that country is growing the same is in case
of South Korea the South Koreas dependence on Service Sector increase, Share
of service sector in South Koreas economy is 58.2%. The Economic Environment
of South Korea is supportive for any new business setup.
Sociological Environment: South Korea has the people from many region
homogeneous surroundings are there. So more opportunities for business
targeting people from all cast. Literacy level is very high (97.9%) in South Korea
which indicates most of the people of South Korea are literate. The population
contains the more young population (72.9%) so growing opportunity for
companies in business associated with young generation.
Technological Environment:
It includes peoples Maturity to technology and
Development related to technology of any country. About 98% of South Koreans

own mobile phones and use them not only for calling and messaging but also for
watching live TV, viewing websites and keeping track of their online gaming
statuses.
Legal Environment: South Korea has a well planned Legal system and The
Judicial system is individual from government, which ensures transparency. The
judicial system of South Korea is composed of the Supreme Court of South
Korea, the Constitutional Court of South Korea, six High Courts, 13 District
Courts, and several courts of specialized jurisdiction, such as the Family Court
and Administrative Court.
Environmental Conditions: The main Environmental issues in South Korea are
Pollution and climate change and Forests and erosion. The South Korean
government's July 2008 decision to boost investment into renewable energy to
reduce its reliance on foreign oil imports may provide a boost to conglomerates'
solar plans.
Internet Industry and Its Role in South Korea:
The Internet Industry began to emerge with the entrant of Internet. The Internet
has transformed the way we live, the way we work, the way we socialize and
meet, and the way our countries develop and grow.
The Internet Industries includes the Businesses which include following four type
of Activates:
Web activities using Web as a support (e.g., e-commerce, content, online

advertising)
Telecommunication on IP or linked to IP communication (mainly Internet

service providers)
Software and services activities linked to Web (e.g., IT consulting, software

development)
Hardware manufacturers or maintenance providers of Web-specific tools

(e.g., computers, smartphones, hardware equipment, servers used for the
Internet)
From this above classification of Activities of Internet Industry we can Say

Internet industry includes Internet-related activities as we define them correspond
to the totality of Internet activities (e.g., e-commerce) and also a portion of the
information and communication technologies (ICT) sector delineated by activities,
technologies, and services linked to the Web.
Internet Industry of South Korea is growing in such way that Internet Industry of
South Korea also give their contribution in the economy of South Korea. Internet
Industry plays a major role in the Export of the South Korea. As the goods which
South Korea exports Such as semiconductors, wireless telecommunications
equipment, computers are part of Internet Industry. Internet Industry also
contributes to the GDP of the country, if we take into account the contribution of
the Internet in the South Koreas GDP is around 4.6%. Internet Industry has
created a many jobs and Business opportunity in the South Korea. Internet
Industry contributed a lot in the education system of the South Korea. South
Korea's education system is technologically advanced and it is the world's first
country to bring high-speed fibre-opticbroadband internet access to every primary
and secondary school nation-wide. Using this infrastructure, the country has
developed the first Digital Textbooks in the world.
Structure, Function and Business of Internet Industry:
The Internet industry includes the main actors providing the technologies and
services constituting the Internet infrastructures and enabling its use. Internet
Industry displays the two main actors of the Internet Industry Traditional Actors
and Emerging Actors. The traditional layers of the Internet Industry include the
Internet Networks Equipment Such as Smart Handheld Devices, Internet
hardware, Internet Software and Internet IT services. The Emerging Actors of the
Internet Industry Include Internet Telecom Services Such as Social Networks &
web platforms, E-commerce & Online Services, and Web Services (web 2.0
Applications). The Function and Business Activities of Internet Industry is based
on the structure which is just described. The function is based on the Traditional
and Emerging Actors of Internet Industry and under these functions various
business activities related to Internet Industry takes place.
Comparative position, Present Position, Trend of Business of Internet
industry of South Korea with India-Gujarat:
As Koreas economic growth is often described as a miracle, we can say that
South Korea is the leading example of a country rising from a level of information
technology access to one of the highest in the world. Koreas local, national and
international connectivity is both qualitatively and quantitatively substantial.
Today, the majority of Korean users access the internet via broadband and it
leads the world in this category. The country is criss-crossed by several
nationwide, gigabit fiber-optic backbones operated by telecommunication
operators. Internet providers and the electric company. International connectivity
has been growing rapidly over the last several years.
Korea leads the world in the broadband. When Korea launched broadband, it
came with internet access only. But, after sometime, broadband has introduced
audio & video streaming, e-commerce and gaming. Network speed of internet in
South Korea is very high in terms of second. As the GDP of South Korea is
increasing substantially, we can say that internet sector will be key driver for
growth of economy of South Korea.
Growth of GDP and the increase the number of internet users are keys for
success of internet sector in South Korea. There is 43% of internet connection
against population. So, it is good for growth of industry. Further, people of South
Korea are moderately using internet for their purpose, there should be some
awareness about technologies of internet to people.
As the technology is high in South Korea in compare to India, the people of South
Korea are getting good speed of internet. i.e. about 13 mbps, this is very high in
compare to India. Because of few internet service providers in South Korea, there
may be possible that they may not get it at reasonable price. Korea has recently
liberalized its trade and investment policies and business related regulations to
enhance and sustain her economic development. Since the Korean economy is
highly dependent on the external sector and export has been identified as a
growth engine to double its per capita income.
India is well-recognized among Asian countries for its content .As India is seen as
worlds top economy up to year 2020, there are various sources for growth in
India. As the number of internet users against population is increasing day by day
in India, there will be automatically rise in the growth of internet sector. India is a
developing country in Technology. The no. of users ratio is high from 3.7% to
8.5% from year 2008 to 2010,which is good sign for India.
The no. of broadband connection ratio is also high in India. Indian people are
aware about their technology. They should adopt 3G technology which through
they expand their business network. As par study the no. of users are high in
office sector. It impacts the good sign for Indian people. They are using
technology for their expand business or network their business area.
National bandwidth speed of Internet in India is 0.8 average Mbps. It is good for
the developing country. India is also try to increase their national bandwidth
speed with technology up gradation. In India, the most of the market of internet is
captured by BSNL i.e. 57.21%. It means the government support is very good in
India.
Indias export-import policies have seen progressive liberalization and its tariff
regime has been continuously rationalized. Indias exports of commercial services
have been increasing gradually & morally
in the last five years. Indias share in
world exports and imports of commercial services was 2.7 per cent and 2.5 per
cent respectively as compared to Koreas shares of 1.9 per cent and 2.7 per cent
in the year 2007.
In Indian people, the more no. of internet users is in the age of 15-34years. It
means the people who are highly using internet for education and business. One
survey which are done in year 2010, it conclude that Share of total online time in
business/finance is 3.8% which is very high compare to other country.
In India, internet service providers are launching 4G service with high speed
internet access. Moreover, many mobile companies has already launched
mobiles with 3G, 4G and Wi-Fi supported mobiles in India. So, there is lots of
scope for growth in technology and also economy. As India has many internet
service providers, there are chances that customers may get these services at
cheap or reasonable rate.
GDP of India is increasing; there is a scope for growth in India. As income of
people of India is increasing day by day, they may go for high rated technology.
As in technological terms, India is far behind in compare to South Korea, a
country should try to develop their own technologies. They may also create
monopoly in terms of hardware, software and technology. These will boost growth
of India.
To increase their foreign exchange, export of technology, hardware and software
are best essentials. There is greater scope for outsourcing/subcontracting from
Korea to India and generating revenue for both the countries. If India and South
Korea both countries come together and combine their efforts, it is possible for
them to achieve joint leadership in this sector. Indian and Korean trade gradually
became more compatible over the period. This indicates that any agreement
between the two countries is likely to enhance trade flows. The trade intensities
between the two countries reflect that Korea is doing better and there is scope for
India to improve its export intensity with Korea.
Future of trade between South Korea and Gujarat is also bright. Because Gujarat
has good convenient environment for the foreign companies who willing to enter.
Gujarat which are having their major contribution in Industry sector. In Gujarat,
Broadband users are high than other region. Gujarat has a good per capita
income and gross domestic product. It has a good impact with the business
facility.
Policies and Norms in South Korea Related to Internet Industry:
South Korea has various Polices and Norms which are related to Internet
Industry. There is some taxation policy of South Korea which also related to
Internet Industry. The government had established policies and programs that
facilitated a rapid expansion and use of broadband. The governments have real
name policy and broadband policy related to Internet Industry. Content regulation,
Internet Censorship and pressure to regulate Internet are also some of the norms
which affect the Internet Industry in South Korea. There are various export Import
Policies and Foreign Trade policy of South Korea which may affect Internet
Industry.
Present Trade Barriers for Internet Industry:

Intellectual Property Rights (IPRs), Internet Censorship, Country Specific
Products and Services are the Present trade Barrier which might affect the
Business of Internet Industry.
Potential for import-export in India-Gujarat Market:

India has a vibrant trade and investment relationship with South Korea. IndoKorean partnership in science & technology, education and energy holds
enormous promise. Indian Community in ROK is estimated to be about 8000.
Over 1000 IT professionals/engineers have recently come to ROK and are
working in various companies including large conglomerates such as Samsung
and LG. There are about 500 scientists/post-doctoral research scholars in ROK
working in prestigious institutions. Currently, some 50,000 Indian people are
working for 380 Korean firms, a fact that reflects there has been great progress in
Korea-India relations. In turn, there are about 9,000 Koreans staying in India.
Bilateral trade has risen by 65% over the past two years since the implementation
of our Comprehensive Economic Partnership Agreement and therefore, set a new
target of US$ 40 billion by 2015.
Economic ties are the bulwark of the Indo-Korean relationship. But surely there
are other areas with potential for growth. South Koreas forte is in IT hardware
manufacturing while Indias is in IT services. In this respect, it is possible to
produce synergy in the IT area between the two countries. Wave of Indo- Korea
relationship looks forward to seeing the joint participation of software companies
from both countries in building an IT infrastructure in India.
Also, it would be great to see Indian software professionals working in South

Koreas manufacturing sector, and an enhanced collaboration in the area of
Mobile-WiMAX, wireless broadband Internet technology.
Internet industry potential to export from India:
Computer Hardware India is one of the fastest-growing IT systems and hardware
market in the Asia-Pacific region. BFSI (Banking, Financial Services and
Insurance),
telecom,
ITeS
(Information
Technology
enabled
services),
manufacturing verticals, Small &Medium Enterprises (SMEs), e-Governance and

households are the key drivers of the IT systems and hardware market in India.
Electronic Components the growth in this segment has been driven by growth of
semiconductors. Semiconductor manufacturing extends beyond wafer fabs to
include Assembly, Test, Mark and Packaging facilities (ATMPs), solar
photovoltaic, optical LEDs, displays, display panels, storage devices and
advanced micro and nanotechnology products.
Future Business Opportunity for Internet Industry in South Korea:
The IT industry in Korea has played a pivotal role in transforming Koreas
economic growth since the 1990s, particularly helped by the strength of
semiconductors, computers and telecommunications equipments. However,
given that it is difficult to find alternatives to IT that enjoy strong global competitive
strength, the IT industry still holds a central role for the
growth of the Korean
national economy.
Overall IT performance
In 2007-2008 IT production growth rate was 5.70%. In software, higher corporate
demand for system software to promote the IT efficiency and expanded IT
investment financial and service sectors will boost production growth by about 5.6
per cent in 2008. As well export and import growth was 9.5%. IT industry size and
performance is good in the world like Added value 6th rank within OECD AND IT
industrys share in total employment 14th rank within OECD.
Export Competitiveness and Revealed Comparative Advantage: The competitive
strength of Koreas IT export was the highest among OECD members. In 2004,
Koreas IT related export was around USD 81 billion to rank it fourth after the US,
Japan and Germany. In terms of revealed comparative advantage, which shows
Koreas comparable standing against other countries, Korea was ranked one of
the highest.
Innovation Level and Investment in R&D: In quantitative scale, Koreas R&D
investment in IT was relatively higher than that of other countries, As of 2003,
private investment in R&D reached about 10 billion PPP$, putting Korea the third
largest among OECD countries. Number of Korean papers published in SCI in
the area of computer engineering was 752 in 2006.
Human Resources and Labour Market Environment: According to IMD Survey
(2006), when asked about the sufficiency of the available IT resources, Korea
scored 8.21 out of a perfect 10, while OECD average was 7.7. It shows that the
problem of resource shortage in IT has been alleviated in Korea as well as in
other countries.
Financial and Entrepreneurial Environment: An international survey (WEF, 2006)
shows that Koreas market for external fund sourcing suffers from weak
efficiency. When asked about the ease of funding via loan, Korea ranked 28th to
make it one of the lowest. It shows that inefficiency in the financial sector and
uneven distribution of the money make external funding still a serious challenge
in Korea.
Level of
IT
Infrastructure:
Koreas telecommunications and
information
infrastructure were ranked as one of the best among OECD member countries.
Above all, in terms of the number of mobile service subscribers, which is a key
indicator of telecommunications infrastructure level, Korea has 79 out of 100 in
2005.
Internet Industry Market Volume: In South Korea, Internet industry market volume
is boost by 4.1% year by year. It may more boost, if proper infrastructure
developed
Online Banking Transaction: Online banking transaction like Account inquiry, fund
transfer is 100 Million daily on an average. This is boost IT industry.
E-Learning Demand Market: E-learning demand market volume is highest in
educational institute like 165.3% and other user like company, Government and
public agency and individual.
Korea Internet Industry Trend

Mobile Internet: The mobile telecommunication network technology has been
evolving from 2G to 2.5G and 3G, and with the introduction of 3.5G such as
HSDPA (High Speed Downlink Packet Access), it is well on its way towards 4G.
Web-Based Software Service (ASP, SaaS): Are becoming available to individuals
and company customers recently. It has been categorised as SaaS (Software as
a Service), meaning using software as one would use a service. Web-based
software is available to the user on the web whenever there is a need, instead of
it being installed into the users PC. More and more of these software products.
Conclusion and Suggestions:
At the End of this Global Country Study report what we found is that Economic
conditions of South Korea are very impressive for any company who want to go
there for doing business. South Korea people have more power to purchase
product. So there is more opportunity for companies to sell their products. As
their purchasing power is high they can able to buy more products in certain
amount.
South Korea's industrial growth has enabled it to produce competitive heavyindustry products like automobiles and ships and high-tech products like memory
chips and computer products. South Korea is now a major exporter of
telecommunications and computer equipment and devices. Thus, we can find
here that South Korea is economically reach country and it economy is growing in
a high rate. We can say that South Korea is a country where business is possible
by any Indian Companies. South Korea is Suitable country in doing businesses;
the economy is more attractive for the entrepreneurs. South Korea is having good
business relations with India and Gujarat.. Many Korean companies started
entering the Indian market aggressively and, within a short period of time, many
of them became household names in the country.
South Korea is Suitable country for any Indian Company who wants to start their
Internet Industry related Business in South Korea. South Korea is the Country
where high connectivity in the world and Individuals are using Internet So much.
So here the users of Internet are more that means here is more opportunity for
Internet Industry related Business. We can say that Internet Industry is gradually
becoming the main Industry in South Korea. That means we can say here
growing demand of Internet related devices, Internet related hardware and Soft
wares. Those Indian Companies is working in this area can enter into South
Korea and Captures the market of South Korea.
There is most of similarities between India and South Korea. So Any Indian
Companies enter in South Korea can easily able to function in the Internet
Industry of South Korea. India and South Korea have a good business
relationship and what we suggest here that India need to develop more
relationship with south Korea and developed the Internet related model in India
as in near future those county which is ahead in Internet related technologies will
have a good economic development.
Computer Hardware and Softwares,
Communications and Broadcasting Equipments are such area of Internet Industry

where there is a growing export opportunity for the Indian Company.
We find that South Korea is Techno Savvy-Internet Savvy Country. South Korea
offering a great environment for the Internet Industry related Businesses and
South Korea have great future opportunities available for the Internet Industry.
Any Indian Company enters in the internet Industry of South Korea they will not
only make a profit but also learn a new expertise from the South Korea.
WEBLIOGRAPHY
PART I ECONOMIC OVERVIEW OF SOUTH KOREA

http://www.indexmundi.com/south_korea/
http://www.koreatimes.co.kr/www/news/bizfocus/2011/07/333_85788.html
http://www.state.gov/www/background_notes/southkorea_0006_bgn.html
http://www.indexmundi.com/south_korea/demographics_profile.html
http://www.indexmundi.com/south_korea/economy_profile.html
https://www.cia.gov/library/publications/the-world-factbook/geos/ks.html
http://countrystudies.us/south-korea/50.htm
http://www.economywatch.com/world_economy/south-korea/export-import.html
http://www.economywatch.com/world_economy/south-korea/export-import.html
http://www.emporikitrade.com/uk/countries-trading-profiles/southkorea/presentation
http://www.census.gov/foreign-trade/balance/c5800.html
http://www.namoleague.com/Narendra-Modi-News-Detail?nid=South-KoreanAmbassador-visits-Gujarat-CM-Narendra-Modi-1815
http://www.icrier.org/pdf/WorkingPaper242.pdf
http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/KoreaSouth-INTERNATIONAL-TRADE.html#ixzz1eRe7ozC0
PART II INTERNET INDUSTRY SPECIFIC STUDY
http://en.wikipedia.org/wiki/Internet
http://www.yourhtmlsource.com/starthere/historyofthenet.html
http://www.eg8forum.com/en/documents/McKinsey_report.pdf
http://en.wikipedia.org/wiki/Economy_of_South_Korea
www.dspace.mit.edu/bitstream/handle/1721.1/44440/294908336.pdf
http://en.wikipedia.org/wiki/Education_in_South_Korea
http://www.fi3p.eu/assets/pdf/FI3P%20D2%20-%20Appendix%20I-II-III.pdf
http://www.korea4expats.com/article-internet-access-provider-korea.html
http://en.wikipedia.org/wiki/Facebook
http://econsultancy.com/us/blog/7810-e-commerce-infographics
http://www.budde.com.au/Research/South-Korea-Telecoms-Mobile-Broadbandand-Forecasts.html
http://www.internetworldstats.com/asia/in.htm
http://www.dfat.gov.au/geo/fs/rkor.pdf
http://www.medianama.com/2009/04/223-telecom-india-arpu-subscribers-dialupquarterly/
http://ir.inflibnet.ac.in/dxml/bitstream/handle/1944/440/04Planner_27.pdf?sequen
ce=1
http://www.wto.org/english/res_e/statis_e/statis_e.htm
http://www.investopedia.com/features/industryhandbook/internet.asp#ixzz1rqxtY
RlS
http://trak.in/tags/business/2011/05/15/india-state-of-internet-speeds/
http://gmn.mintel.com/snapshots/KOR/55/?cookie_test=yes
http://coolfounders.com/indonesian-startups-and-internet-industry-data/
http://www.gidb.org/downloads/economic_profile_July_2011.pdf
A
ON
Internet Industry in South Korea

Submitted to

In
Faculty Guide
Dr. Kunjal Sinha
1) Sumant Rathod
2) Sameer Patel
3) Ravi Tank
4) Boski Mackwan
5) Nilesh Tadha
6) Aakash Shah
Submitted by
107050592091
107050592092
107050592093
107050592094
107050592095
107050592096
MBA SEMESTER III/IV

MBA PROGRAMME
Ahmedabad
Economic overview of South Korea
Rank: 15th (nominal) / 12th (PPP)

Currency: South Korean Won (KRW)
Trade organizations: APEC, WTO, OECD, G-20
Statistics:
GDP: PPP: $1.423 trillion (2010 est.)
Nominal: $1.007 trillion (2010 est.)
GDP growth 6.1% (2010 est.)
GDP per capita: PPP: $30,200 (2010 est.)
Nominal: $20,265 (2010 EST.)
GDP by sector: agriculture (3.0%), industry (39.4%), services (57.6%) (2008
est.)
Inflation (CPI): 3% (2010 EST.)
Population
Below poverty Line: 2% (2004 est.)
Gini index: 31.4 (2009)
Labour force: 24.62 million (2010 est.)
Labour force by occupation: agriculture: 7.3%; industry: 24.3%; services:
68.4% (2010 est.)
Unemployment: 3.3% (2010 est.)
Main industries:
electronics, telecommunications, automobile production,
chemicals, shipbuilding, steel

Ease of Doing Business Rank: 16th[1]
External Exports: $466.3 billion (6th; 2010 est.)
Export goods: semiconductors, wireless telecommunications equipment, motor
vehicles, computers, steel, ships, petrochemicals
Main export partners :China 23.2%, United States 10.1%, Japan 5.8%, Hong
Kong 5.3% (2009 est.)
Imports: $417.9 billion (8th; 2010 est.)
Import goods: machinery, electronics and electronic equipment, oil, steel,
transport equipment, organic chemicals, plastics
Main import partners :China 16.8%, Japan 15.3%, United States 9%, Saudi
Arabia 6.1%, Australia 4.6% (2009 est.)
FDI stock: abroad: $115.6 billion (31 December 2009)
Gross external debt: $380.6 billion (31 December 2010 est.)
Public finances
Public debt: 23.7% of GDP (2010 est.)
Revenues: $248.3 billion (2010 est.)
Expenses: $267.3 billion (2010 est.)
Economic aid: ODA, $900 million (donor) (2009)[2] aid to North Korea excluded
Foreign reserves: US$298.806 billion (March 2011)
Overview of Trade and Commerce:
IndiaSouth Korea relations has been relatively limited, although much

progress arose during three decades. Since the formal establishment of the
diplomatic ties between the two countries in 1973, several trade agreements have
been reached: Agreement on Trade Promotion and Economic and Technological
Cooperation in 1974; Agreement on Cooperation in Science & Technology in
1976; Convention on Double Taxation Avoidance in 1985; and Bilateral
Investment Promotion/ Protection Agreement in 1996. Trade between the two
nations has increased exponentially, exemplified by the $530 million during the
fiscal year of 1992-1993, and the $10 billion during 2006-2007. During the 1997
Asian financial crises South Korean businesses sought to increase access to the
global markets, and began trade investments with India. The last two presidential
visits from South Korea to India were in 1996 and 2006, and the embassy works
between the two countries are seen as needing improvements. Recently, there
have been acknowledgments in the Korean public and political spheres that
expanding relations with India should be a major economical and political priority
for South Korea. Much of the economic investments of South Korea have been
drained into China however, South Korea is currently the fifth largest source of
investment in India. To the Times of India, President Roh voiced his opinion that
cooperation between India's software and Korea's IT industries would bring very
efficient and successful outcomes. The two countries agreed to shift their focus to
the revision of the visa policies between the two countries, expansion of trade,
and establishment of free trade agreement to encourage further investment
between the two countries. Korean companies such as LG and Samsung have
established manufacturing and service facilities in India, and several Korean
construction companies won grants for a portion of the many infrastructural
building plans in India, such as the National Highways Development Project. Tata
Motor's purchase of Daewoo Commercial Vehicles at the cost of $102 million
highlights
the
India's
investments
in
Korea,
which
consist
mostly
of
subcontracting. The latest in the relations between the two countries is the
historic Free Trade Agreement and Presidential invitation for 2009 Republic Day
celebrations in New Delhi.
Introduction to South Koreas Automobile Industry
The Korean automobile industry is presently the fifth largest automobile industry
across the globe with reference to production volume and the sixth largest in
terms of export volume. In short, the South Korean automobile industry, as a late
entrant to the world automotive industry, succeeded and strengthening its
position in the market. This was possible through immersive R&D activities in the
process of catch-up. The industry's current innovation activities in fuel cells and in
electric cars were described in detail. South Korea's R&D within the industry went
up remarkably.
The automotive industry is undoubtedly one of the most influential contributors to

the entire South Korean economy. The automobile industry has been a major
industry sec-tor that sustained the Korean economy for decades and therefore
has been proactively supported by the government. Brisk collaboration among
government, industry, and academia enabled South Korea to become worlds fifth
largest manufacturer of auto-mobiles. Indicators such as R&D expenditures
suggest that the South Korean automo-bile industry strives for innovativeness
and creativeness. According to Nelson (Nelson 2004), indigenous R&D
capabilities are increasingly important for catching-up coun-tries. South Korea, as
a late entrant to the world automotive industry, was able to solidi-fy its position in
the industry by gradually strengthening independent R&D capabilities. This

reinforcement process of the R&D capabilities was effectively carried out under
the framework of NIS.
Early beginnings
The History of Korean automobile started in August 1955, when a Korean
businessman, Choi Mu-seong, and two of his brothers (Choi Hae-seong and Choi
Soon-seong), begun with a modified jeep engine on a US military jeep with a car
body which made with the metal sheet from junk oil drum can and military junk
Jeep parts to manufacture its first car which was known as "Sibal".
In 1960, Sinjin [in English New beginning] Automobiles launched Sinjin Publica
under a technical licensing agreement with Toyota. In order to develop the
automobile industry, the Korean government announced the "Automobile Industry
Promotion Policy" in 1962, and The Automobile Industry Protection Act to protect
the infant industry. Foreign automakers were barred from operating in Korea,
except in joint ventures with local business entities. The government's efforts led
to companies that were established in other businesses entering the industry, and
the formation of new startups. Three companies were established in 1962:
Kyeongseong Precision Industry, which changed its name to "Kia

Industry", and started assembling cars in cooperation with Mazda in 1964;
Ha Dong-hwan Automobile Industry Co. (the predecessor of SsangYong

Motor company; and
Saenara Automobile, established with the technical cooperation of Nissan

Motor Co.; it was the first automaker in Korea that was equipped with
modern assembly facilities.
The Asia Motors Company was established in 1965, and the Hyundai Motor
Company in 1968 with the technical cooperation of the Ford Motor Company.
However, all these companies were then merely automotive assemblers,
importing parts from overseas partners.
Major Korean Government Policies regarding the Korean Automotive

Industry
Policies to boost the auto industry
Financial Support for auto parts suppliers and car loan/finance industry
Temporary tax reduction: 30% reduction of Individual Consumption Tax

for a
Period covering until second half quarter of 2009.
Subsidy for car owners who scrap their old cars in favor or purchasing
smaller
Vehicles (currently under study)
Hybrid Vehicle tax incentives: Max. Of (KRW) 3.1 million Won per vehicle
($2,000USD/\195,000 JPN).
Policies to push eco-friendly Green Growth
Promote and spread the use of Hybrid and bio-fuel consuming vehicles.
Encourage and educate eco-driving habits
Implement policies for achieving high-fuel efficiency and support green car
development.
Green transportation system
IMPORT OF CAR
DUTY RATES
Breakup of Customs duty on car import
BASIC CUSTOMS DUTY
40%
SPECIAL CUSTOMS DUTY
5%
ADDITIONAL DUTY
40%
M.V.CESS
0.125%
SPECIAL ADDITIONAL DUTY OF
4%
CUSTOMS
Future forecast
In the next ten years for the Korean automobile industry in the objective to remain
competitive globally are through the technological and educational support with
profit
maintain,
global
expansion,
labor
relation
improvement,
mutual
development and cooperation with SMEs. The marketing strategy to the

emerging markets particularly to the BRICs market must be strengthen and
establishment of foreign plant for cost competitiveness with the global image for
Korean car as the value for money could be the key factors to challenge Toyota
Motors as top automaker in todays global market
Trade and Investment Barriers
As has been highlighted in the trade analysis part of this paper, trade flows
between India and Korea, though on the rise in last few years, remains much
below potential. Apart from natural and structural factors like distance and
difference in economic structures, the non-realisation of potential is mainly due to
various barriers/problems that exist in both the countries. These barriers exist for
merchandise and services trade as well as investment.
Potential of South Korea

Indias $1.2 trillion economy grew 5.8 percent in the three months to March 31,
brushing off the global slowdown that has dragged Korea into recession.
Singapores exports to India excluding oil products more than doubled in the two
years after they signed a similar accord in 2005, turning the city states deficit to a
surplus, according to Indian Commerce Ministry data.
South Korea is looking to expand its presence in India with its vibrant economy
and 1.2 billion populations, said Myong Jin Ho, a researcher at the Institute for
International Trade in Seoul.
Bilateral trade between India and South Korea rose 39 percent last year to $15.6
billion. South Korea exported $3.6 billion of goods to India, and imported $1.6
billion in the first six months of this year.
Indias growth puts more money into the hands of consumers in a country where
almost 30 percent of the population is under 15 years of age. Younger people
tend to spend more on vehicles, phones and other consumer goods.
Car Demand
India will eliminate or reduce tariffs on 85 percent of South Korean exports over
10 years, Koreas Trade Ministry said. These will include auto parts, tankers,
electronic goods, machinery parts and synthetic rubber.
South Koreas cuts will cover about 90 percent of Indian exports, including
polycarbonates, leather, industrial diamonds, gasoline and corn for livestock.
Hyundai, which operates an auto plant near Chennai in southeastern India, sold
244,030 vehicles in the country in the year ended March 31. The largest South
Korean automaker gets 55 percent of sales from emerging markets including
India and China, where car demand has withstood the global slowdown.
LG Electronics, the worlds third-largest maker of liquid- crystal-display
televisions, also has plants in India to make consumer appliances and personal
computer monitors.
The two nations decided to exclude other agricultural goods, finished
automobiles, fisheries and textiles from the deal.
The Korean law implementing the pact is expected to take effect on Jan. 1, Choi
said.
Once the cuts begin, Koreas exports to India will likely increase by an annual
average of $177 million and Indias exports to Korea $37 million over the next 10
years, according to Korea Institute for Industrial Economics & Trade.
Conservative
Those forecasts may be conservative, given Indias potential, said Myong.
The two nations will also expand job opportunities for skilled personnel from India
in the field of information technology, engineering, management consulting,
machinery and telecommunications, and scientific research, the ministry said. It
didnt specify any quotas on the number of Indian nationals expected to take up
jobs in Korea in the future.
India has also opened up its market to investment in all its industries with the
exception of agriculture, fisheries and mining. South Korea will be able to invest
in food processing, textiles, garments, chemicals, metals and machinery, it said.
The following is a table of the top 10 traded goods for South Korea and India,
according to the Korean Trade Ministry.
Top 10 Exports in 2008
From South Korea to India
Value ($ million)
1. Automobile parts
1,131
2. Jet fuel
769
3. Wireless phones
499
4. Tankers (ships)
430
5. Fixed phones (with wires)
248
6. Hot-rolled steel
208
7. Paper
172
8. Cold-rolled steel
165
9. Household electronic goods
150
10.Cargo ships
133
Conclusion:
Bilateral economic relations between India-Korea have strengthened over the

years, particularly since 1991. However, the current size of trade and investment
between the two countries is low compared to the size and structural
complementarities of the two economies.
Further, the increasing trade complementarily index (TCI) shows that Indian and
Korean trade gradually became more compatible over the period under review.
This indicates that any agreement between the two countries is likely to enhance
trade flows. The trade intensities between the two countries show that Korea is
doing much better and there is scope for India to improve its export intensity with
Korea.
South Koreas Ambassador Mr. Kim Joong Keun called on Chief Minister
Narendra Modi today in Gandhinagar and discussed strengthening the trade
relations and broadening the scope of business between Gujarat and South
Korea.
Expressing interest in partnering Gujarat in the sectors like auto, shipping,
electronics and knowledge industries Mr. Kim asked Chief Minister to establish
trade relationship especially between Gujarat and the Kyunggi province of South
Korea. He also invited Mr. Modi to visit his country with a high-level delegation.
Chief Minister said that Gujarat government is determined to develop shipbuilding industries alongside 1600 km. long coastline of the state and to construct
the worlds largest man-made fresh water reservoir. He said his government
would welcome the latest technology from South Korea for these projects.
Mr. Modi invited Korean ship-building companies to set up industries in Gujarat
saying that they will get necessary land for setting up of industries on the
seacoast of Gujarat. He also called upon Korean companies to set up their
ventures in electronic zone of Gandhinagar and in Dholera SIR.
Chief Minister said that car manufacturers like TATA, Ford, Peugeot and Maruti
are setting up their plants in Gujarat and that Gujarats doors are also open for
Koreas auto major Hyundai. He sketched out how Gujarat is going to become an
auto hub with the manufacturing of over 50 lakh motorcars in the coming years.
He also described how Gujarat is proving most favorable investment destination
with its pro-business atmosphere, zooming economy, transparent and farsighted
policies, entrepreneurial nature of people and zero man-hour loss.
Secretary to Chief Minister A. K. Sharma and INDEXT-B Managing Director B. B.
Swain were also present in the meeting.
The South Korean auto major and Indias second largest vehicle manufacturer
Hyundai Motors is deeply considering the option of crafting the path towards
Gujarat roads and commented, if the state government offers favorable
conditions we can surely come to the state. South Korean Ambassador Mr. Kim
Joong Keun was in the city for a three-day tour and addressed the reporters
regarding the new offer proposed by the Gujarat state government.
Mr. Kim further expressed, Gujarat is becoming an important automobile hub in
India. Given the situation of Hyundais need for a third plant, I say why not be in
Gujarat? Gujarat has offered favorable conditions to Hyundai. I dont know about
Hyundais decision however.
Moreover, in the meeting with Modi, the CM also showed some important
infrastructure projects to the ambassador and shared the view that Gujarat
wishes to develop a 65 km bridge on the coastline of the state. On the other
hand, Mr. Kim mentioned that the CM of the state is quite interested to attract
technology from Korea but before any plan initiates; Gujarat government must
reveal concrete plan and blueprint for new projects.
PESTEL framework to the export/import of automobile.
There are several factors which affect to the export /import of automobile. When
you studying this factor you should consider both sides, means both countries.
Environmental factors for a company or an industry refer to variables and
conditions around that company and industry that affect its working and
performance, but which cannot be controlled. For example, the weather

conditions in a city may affect the sale of Ice cream in a city, but the company
selling or manufacturing ice creams has little control over the weather.
We can differentiate environmental factors from the internal variables of factors
that are under reasonable control of a company or industry. A company cannot
change or influence the environmental factors, but it does have fair amount of
control over impact of environmental factors on its performance. This control is
achieved by, understanding, anticipating, and responding wisely to environmental
factors by management of internal factors. For example, a company cannot
change the weather condition, but it can manage its production and stocks of ice
cream in a way that minimizes the ill effect of uncertainty and fluctuations created
by changing weather condition.
To understand, analyze and deal with environmental factors, we can use the
"PESTEL" framework that classifies all environmental faators in the following six
groups.
1. Political
2. Economical
3. Socio cultural
4. Technological
5. (Physical/Geographic) Environmental
6. Legal.
Some of the major environmental factors affecting automobile industry in each of
these groups are described below.
1. Political
Political climate in different countries producing an buying automobiles regarding

policies on import, export and manufacture of automobiles and automobile
components. This will also include policies on allowing setting up of
manufacturing plants by foreign companies.
Stability of governments. This may affect the future conditions in a country.
Taxation policies.
India is country where political stability is less compare to the south Korea.
And also miss use of political power by polititian.
In Gujarat on an average its in better condition.
And also development oriented state.
In the last two year Gujarat success to attract big automobile industry.
2. Economical
The population figures and automobile buying capacity of people.
Level of economic activity that affects need for commercial use of automobiles
India is second largest country in population. Around 121crors. And it may be

the first in 2050.
Also india having highst young ratio compare to all world.
3. Socio cultural
Lifestyle and preferences of people, that impact their choice of types of

automobiles.
Social norms that impact the decision to own and use automobiles versus
other means of transport.
There are extremely increases in lifestyle of Indian as well as in Gujarat.
Also increase the per capita income of people in Gujarat.
Increases in education level.
4. Technological
Technology relating to automobile designs
Technology of automobile manufacture
Technological developments that may increase or decrease use of automobiles.

For example, Internet increase number of people working from home and thus
reduce automobile use for commuting?
Nano is world cheapest car manufactured by tata motor.
India is world top ten manufacturer in automobile industry.
28% growth in auto industry.
Where as in South Korea having 6% growth rate.
India is able to provide high technology to world.
5. (Physical/Geographic) Environmental
Physical conditions effecting ability to use automobiles of different types.

This will also include state infrastructure such as roads for driving vehicles.
Development in road is the main phenomena for transportation.
6. Legal
Legal provision relating to environmental population by automobiles.
Legal provisions relating to safety measures.
BIBLIOGRAPHY
www.google.com
http://sourcing.indiamart.com/automotive/articles/growth-trajectory-indianautomotive-industry/
http://www.eagar.eu/docs/15.pdf
http://www.econstrat.org/images/ESI_Research_Reports_PDF/the%20globalizati
on%20of%20the%20korean%20automotive%20industry%20%28alex%20greenb
aum%29.pdf
http://www.kama.or.kr/Race2001.htm
A
ON
Transportation
Sector: Comparison between

(South Korea-INdIA)
Submitted to

In

Faculty Guide
Mr. Manish Joshi
Submitted by
1) Chowksi Hardik
2) Shah Mahek
3) Shah Richa
4) Desai Ripal
5) Prajapati Krunal
6) Limbachiya Tejas
107050592097
107050592098
107050592099
107050592100
107050592101
107050592102
MBA SEMESTER III

MBA PROGRAMME

Ahmedabad
Executive Summary
This project shows the comparison of the transport sector between South Korea
and India. Project encompasses various modes of transport: land, water and, air.
Transportation is provided by extensive networks of railways, highways, bus
routes, ferry services and air routes that crises-cross the country.
South
Korea
Transportation
ably
supports
the
industry.
South
Korea
Transportation includes a number of types of transport that connects the country

internationally as well as with other parts of the world. A number of international
carriers fly to South Korea everyday making the journey less hectic. The
International Airport of South Korea is located at Incheon, which is 60 kms from
the Capital city. Another important airport here is the Gimpo Airport, which
nowadays just offers Domestic Services. Driving in South Korea can be difficult:
it's expensive and traffic jams are a common problem taxis, known as bullet taxis,
go between big cities and major tourist sights. They're not metred so we'll need to
negotiate a price before we set off. Cycling in Seoul is a bit of an extreme sport,
but it can be a pleasant way of exploring the rural areas. Water-babies can take
ferries from the mainland to offshore islands and several lakes. Taxis cost more
than the subway, but if we fancy treating yourself, deluxe taxis are comfortable,
and the driver usually speaks English. South Korea Transportation is thus very
popular because it not only provides the travelers with all types of facilities but
also the twinkling and beckoning nightlife of Korea makes our trip an
unforgettable.
Indian transportation is an important part of the nation's economy. Motor vehicle

penetration is low by international standards, with only 13 million cars on the
nation roads. In addition, only around 10% of Indian households own a
motorcycle. Despite ongoing improvements in the sector, several aspects of the
transport sector are still riddled with problems due to outdated infrastructure, lack
of investment, corruption and a burgeoning population. The demand for transport
infrastructure and services has been rising by around 10% a year with the current
infrastructure being unable to meet these growing demands.
So the transportation market in South Korea can be concluded to be in a very

growing stage rather than in India. However in India some policy improvements
and investments from the government can give a hand in the future development
of the industry. The transportation industry is expected to boost the economic
growth of the nation by providing the much needed support for trade facilitation.
Though economic relations between India and Korea have been strengthening,
the current size of trade and investment between the two countries is relatively
low compared to the size and structural complementarities of the two economies.
In this context, the present paper Analyses trade and investment relations and
explores future areas of potential co-operation between India and Korea. We find
that the increase in merchandise trade between the two countries has been
mainly because of the changing demand structure and comparative advantages
of both the economies in complementary sectors in recent years. The Revealed
Comparative
Advantage
(RCA)
analysis,
at
both
the
aggregated
and
disaggregated levels, shows that while Korea has been specializing in a few, high
value-added manufacturing products, Indias exports have been more diversified.
The analysis also indicates that both the countries have comparative advantages
in different products in the same industry, revealing the opportunity for intraindustry trade (IIT).
Moreover, the increasing trade complementarily index (TCI) shows that Indian
and Korean trade gradually has become more compatible over time, indicating
that any agreement between the two countries is likely to enhance trade flows.
The trade intensities between the two countries reveal that Korea is doing much
better and there is scope for India to improve its export intensity with Korea.
The study also suggests the areas where there is huge scope for increased
investment and technological collaboration between the two countries. Further,
there is huge potential for trade in services in areas such as information
technology, science and technology, pharmaceutical industry, broadcasting,
tourism, healthcare and human resource development. Removal of tariff and nontariff barriers, especially sector specific barriers, will give a major boost to bilateral
trade and investment relations.

South Koreas population more than doubled over the second half of the 20th
century. From 1960, however, birth rates decreased rapidly, and the population
growth rate was almost negligible by the beginning of the 21st century. During the
same period, mortality rates also slowed, reflecting an overall increase in living
standards.
Demographics are the most recent statistical characteristics of a population.
These types of data are used widely in sociology, public policy, and marketing.
Commonly examined demographics include gender, race, age, disabilities,
mobility, home ownership, employment status, and even location. Demographic
trends describe the historical changes in demographics in a population over time.
Both distributions and trends of values within a demographic variable are of
interest. Demographics are about the population of a region and the culture of the
people there.
South Korea's economy has undergone a very impressive development

experience. Through economic planning, its government modernized the
agricultural sector, established a large industrial sector, and 0helped create a
service sector.
Its extensive regulations have largely protected domestic enterprises from foreign
competition and helped them grow and consolidate over time.
Government policies and practices, including generous loans, have stimulated

economic growth. The 1997 financial crisis damaged the South Korean economy
as a whole and forced it to contract in 1998, but the economy began its recovery
in 1999 and continued it in 2000, an indicator of the strength of its sectors. At the
beginning of the 21st century, South Korea's smallest economic sector, in terms
of contribution to GDP, is agriculture sector, including forestry and fisheries.
Second largest is the industrial sector, which consists of manufacturing,
construction, and mining, a vital sector of which manufacturing accounts for the
bulk of South Korea's expanding exports. As with agriculture, industry's share of

GDP is declining while the service sector is growing, a phenomenon consistent
with the maturity of the South Korean economy. The service sector is now the
largest and the fastest growing economic sector, accounting for the largest share
of GDP.
TRADE RELATION
Trade policy reform has formed a major part of Indias economic reforms agenda
and has contributed significantly to the impressive performance of the economys
external sector. Export-import policies have seen progressive liberalization and its
tariff regime has been continuously rationalised. The average tariff rates have
been brought down substantially in recent years from 32.3 per cent in 2001-02 to
15.8 per cent in 2006-07. Although India has been a strong supporter of the
multilateral trading system, it started taking a keen interest in the increasing
regionalism around the world in recent past. This is mainly due to the failure of
different rounds of multilateral trade negotiations and the slow progress of
negotiation at the WTO. Currently, India is among the top most countries having
RTAs/FTAs either in place or under negotiation. The total cumulative number of
Indias proposed or existing RTAs/FTAs is 31 of which 21 are with countries in
Asia and the Pacific region. Among the first preferential trading agreements in
Asia was the Bangkok Agreement of 1975 of which India and Korea, among other
countries, were founding members. Thereafter, India has joined various other
regional trading arrangements including the India-Korea CEPA concluded in
August 2009.
PESTEL analysis of Transportation in south Korea

Political Factors:
State regulation of the public transport sector presents many limitations possible
negative impact on the public transport industry
Economic Factors:
- Petrol prices have on average been increasing and they are likely to grow until
the petrol runs out possible positive impact on the public transport industryConsumer confidence has decreased as a result of the economic downturn and
people are seeking savings in their everyday life.
Possible positive impact on the public transport industry- Increase in the average
disposable income of both families and individuals indicates that more people can
afford to buy and use a private car Possible negative impact on the public
transport industry- Increase in number of people, who own private cars possible
negative impact on the public transport Industry.
Social Factors:
-Growing population and numbers of visitors/tourists imply increasing demand for

transport
Services
-Ageing of population, partially caused by the baby-boomer generation entering
the retirement stage, will significantly influence the new trends as transportation is
an important means for elderly people to maintain mobility and social contact
(House of Representatives Standing Committee on Health and Ageing, 2005)
possible positive impact on the public transport industry
-Greater focus on environmental issues and sustainable development puts

environmentally-friendly electric trains in an advantageous position. Possible
positive impact on the public transport industry.
-People are more time-poor and seek efficient ways of transport in the city, where
public transport possesses advantages such as rail and bus lanes that avoid
traffic jams possible positive impact on the public transport industry
Technological Factors:
Rapid development in communication and computer technologies, e.g. increasing

use of video conferencing, Tele-working and the Internet enables people to work
from home and not have to commute to the office.
Environmental:
Today the environment is perhaps the most important external influence on any
transport service.
Government, consumers and businesses all want to see better environmental
management. In 2007, first set out its Climate Change Strategy. The strategy sets
targets to reduce CO2 emissions in the short and long term along with plans to
achieve these targets. Government, consumers and businesses all want to see
better environmental management. In 2007, first set out its Climate Change
Strategy. The strategy sets targets to reduce CO2 emissions in the short and long
term along with plans to achieve these targets.
Government, consumers and businesses all want to see better environmental
management.
Comparison of transportation sectors of India & South Korea
INDIA
SOUTH KOREA
Airports
Airports
Number: 349
Number: 116
Comparison to the world: 23
Year: 2009
Year: 2009
Heliports
Heliports
Total: 37
Total: 516
Year: 2009
Year: 2009
Pipelines
Pipelines
Gas: 7,542 km
Gas: 1,423 km
Oil: 7,659 km
Year: 2009
Year: 2009
Roadways
Roadways
Total: 3,320,410 km (includes 200 Total: 103,029 km

km of expressways)

Year: 2008
Year: 2009
Waterways
Waterways
Value: 14,500 km
Value: 1,608 km; (most navigable

Year: 2008
only by small craft)

Year: 2008
Merchant marine
Merchant marine
Total: 501
Total: 812
By type: bulk carrier 102, cargo By type: bulk carrier 212, cargo
241, carrier 1, chemical tanker 19, 226, carrier 2, chemical tanker 133,
container 13, liquefied gas 18, container 80, liquefied gas 33,
passenger 3, passenger/cargo 11, passenger 5, passenger/cargo 26,
petroleum tanker 92, roll on/roll off petroleum tanker 61, refrigerated
cargo 16, roll on/roll off 9,
1
specialized tanker 4, vehicle carrier
Year: 2008
5
Year: 2008
Railways
Railways
Total: 64,015 km
Total: 3,381 km
Standard gauge: 29 km 1.435-m Standard gauge: 3,381 km 1.435-m

gauge
gauge (1,843 km electrified)

Year2008
Year: 2008
Trade between India- South Korea

Bilateral trade has been growing on an average at 20% annually over the last five
years. Compared to US$2.52 billion in 2001 (Indian exports US$ 1.11 billion and
Indian imports US$ 1.41 billion) total trade stood at US$ 20.57 in 2011. A modest
target of US$ 30 billion in bilateral trade was set for 2014, during the visit of
President Lee Myung Bak to India in January 2010.
India became the 9th biggest source of imports for ROK in 2011. Main Indian
exports were petroleum products (mainly naphtha, 53%), cotton yarn, ferro-alloys,
unwrought aluminum, unwrought zinc, metal scrap , oil cakes, iron-ore, sesame
seeds and marine products. Major Korean export items include - automobile parts
and accessories, telecommunication equipment, ships, petroleum products, hot
rolled products of iron.
Business opportunities in future
The future of transportation is digital. We need to create a digital platform, an

infrastructure that can be used freely by the transportation industry and its
customer.
Numerous
technologies
have
been
deployed
to
assist
and
manage
transportation. But recent concerted efforts in academia and industry point to a
paradigm shift in intelligent transportation systems. Vehicles will carry computing

and communication platforms, and will have enhanced sensing capabilities. They
will enable new versatile systems that enhance transportation safety and
efficiency and will provide infotainment. This article surveys the state-of-the-art
approaches, solutions, and technologies across a broad range of projects for
vehicular communication systems.
Although the next five to 10 years are expected to be good for the transportation
industry, they come with challenges and are sure to be interesting. In the near
term, the 2012 elections will be of major importance to the industry and will be a
significant force in shaping policy - including the hotly debated infrastructure bill.
But no matter the outcome, stricter regulations on safety and fuel efficiency will
almost certainly be a challenge driving up costs and decreasing capacity.
Fuel prices are a huge question mark. The past few years they have been all over
the map. Looking forward, oil is likely to become more expensive, and will
probably continue the wild ride of ups and downs.
Future Outlook of Trucking
The life of a truck driver is much more comfortable today than it has ever been.
Commercial trucks have improved suspension, steering, braking and air-ride
seats and are technologically superior to the trucks of our ancestors.
Many trucks are equipped with ABS brakes and automatic transmissions. An
automatic transmission simplifies gear shifting and minimizes knee injuries from
repeatedly pressing the clutch downward. For those who still use manual
transmissions, more powerful engines allow a driver to maintain speed uphill
without having to downshift as often.
Future outlook of rail road
A railroad carrying chiefly heavy commodities like better facilities, and sales
promotion in the future.
The railroads are gaining momentum over the trucking industry due to significant
rise in fuel costs of truckers. Currently, the railroads are carrying more cargos,
which is helping them gain market share
During fiscal 2011, the railroads benefited from strong pricing gain that reflect
both solid yield improvement and higher fuel surcharges. Shipments of
construction components, lumber and motor vehicle volumes increased over 30%
year over year. Petroleum product shipment rose 29% year over year.
Future outlook of airlines

Korean Air operates First, Prestige and Economy class.
First Class
Passengers travelling in First Class may relax in sleeper seats that offer comfort
and each contain an individual video system. Inflight meals are available in a
variety of cuisines along with French wine and wine from the destination country.
Prestige Class
Prestige Class is the Korean Air Business Class service. Seats are widely spaced
to ensure that passengers have plenty of room inflight. Champagne and port are
available with the dessert course, with other fine wines available with the meal
service.
Economy Class
The seats in Economy Class are ergonomically designed to ensure the enhanced
comfort of the traveller. The meal service offers Korean cuisine or that of the
destination country. The free baggage allowance available to passengers is 23kg.
Future outlook of buses
Because of the infrastructure requirements and expenses related to airplane and

train travel, bus service continues to provide the bulk of public transportation in
Korea.
There are four types of buses:

1) Trunk Bus (Blue) :
This type of buses will operate at higher speeds and access the median bus
lane connecting suburban areas to downtown Seoul. The city government is
partly in charge of its operation
The city has taken full consideration to introduce 3 kinds of buses belonging to
the Blue Bus category:Articulated bus, CNG bus with a low floor, regular large-sized CNG bus.
2) Branch Bus (Green):

Green buses will be flexibly operated by private bus companies, to connect
major subway stations or bus terminals outside downtown Seoul. It is similar
with the city bus and the community shuttle bus currently in operation. Green
stands for the mountains surrounding the city.
3) Rapid Bus (Red):

The red buses will be express buses designed specially for those commuting
between downtown Seoul and the metropolitan area. The color red exudes
energy of speed.
4) Circulation Bus (Yellow):
This bus will circle downtown Seoul and stop at stations for blue buses and
major railway stations, as well as business, tourist and shopping areas. Yellow
was selected for its dynamic and friendly image.
Future outlook of shipping

Ocean shipping is a part of professional trade activity which actually touches
every customer, every business and for that matter every country. Whether you
are transferring household goods to another country or moving your luxury or
SUV car, or transferring goods and commercial cargo in bulk, it is necessary that
you look for the international ocean shipping company.
Choosing the cargo and International freight shipping Movement Company which
is offering professional services will bring real time difference in the transfer of
freight and moreover, you will be in a better position to discuss and settle
international ocean shipping rates. Since cargo and freight movement is
completely international activity, the overseas shipping Rates change frequently
with the economic conditions prevailing in the world. Therefore, it becomes your
responsibility to remain aware of the changing overseas shipping rates
Challenges of Indias transportation.
Indias roads are congested and of poor quality
Rural areas have poor access.
The railways are facing severe capacity constraints.
Urban centers are severely congested.
Ports are congested and inefficient.
Airport infrastructure is strained.
Key Government Strategies for improving Indias transportation.
Increasing public funding for transportation in its Five Year Plans.
Launching the ambitious National Highway Development Programme.
Operationalizing the National Highway Authority of India (NHAI) to act as

an infrastructure procurer and not just provider.
improving rural access by launching the Pradhan Mantri Gram Sadak

Yojana (Prime Ministers Rural Roads Program).
5 CONCLUSIONS
Second hand data analysis accompanied with all summary shows that the level of
Indian transportation has improved quickly during the last decades in
comparisons of South Koreas transportation.
Furthermore, it seems that it will continue on the same path, and will increase its
gross domestic product and level of exports and imports in the future. This for the
reason that the global economic crises occurred in the previous decade have had
only small negative effect in its economy. India also recovered from one of the
worst global economic crisis.
India is currently investing heavily in transportation sector. Almost half of the
Indians infrastructure projects funded by World Bank are focusing in the
improvement of this sector. Major strength in Indian transportation logistics sector
is its massive large-scale container sea ports, which are most connected in the
world.
This ought to create platform for further growth as free trade movement
continues. Respondent companies in Bangladesh, Nepal, china and Sweden
have transportation flow connections with India.
Some respondent companies reported that they will increase transportation flows
with India. Which implies that transportation with India is probably going to
increase during the forthcoming years?
Statistics review also shows that India is heavily investing in transportation sector.
India is having the wider area than the South Korea. But south Korea is more
cheaper and having improved transportation than the India..
India will increase its gross domestic product and level of exports and imports in
the future. This for the reason that the global economic crises occurred in the
previous decade have had only small negative effect in its economy. India also
recovered from one of the worst global economic crisis.
Government has so many plans to improve the transportation sectors . it has to
be largely improved by the nation. as so many people are living on the basis of
the transportation only. And through it the import and export are freely movable
easily.
Suggestions
Following are the measures that can be taken to improve mass transportation:
1. Add air-conditioned coaches (in line with first-class coaches) to every train.
This will definitely be a big attraction to those who want to travel by train, One
additional air-conditioned coach will take 40 cars off the road. Think of the
potential saving of road space, fuel and other natural resources. But the
attraction will manifest itself in the form of actual usage only if the facilities
provided are in fact of quality and able to provide a comfortable journey along
with economy of time.
2. Improve Railway Stations and their surroundings. It is the biggest put-off to

people who actually would like to travel by train, but refrain from doing so due to
the congested surroundings as well as the non-commuter friendly stations.
3. Add escalators and elevators to railway stations in Mumbai, making them an

attractive option of Mass Transport.
4. More number of air-conditioned BEST Buses on popular routes, especially

during peak hours. One bus takes 20 cars off the road. But just as mentioned
above, the quality of service and comfort of journey along with reasonable
frequency of services will largely affect the choice of the consumer. At the same
time, economy of travel needs to be catered to as well.
5. Make the availability of season pass/daily ticket online, to avoid standing in

queues. Long serpentine and time consuming queues are a major deterrent to
genuine travelers who prefer to avoid mass transport simply due the
inconvenience and discomfort caused in the simple act of purchasing a travel
ticket.
6. All major global cities provide excellent mass transportation, which C-level
executives prefer to use, instead of their personal cars, without any remorse. Our
travel system needs to be upgraded to such a level.
Bibliography
http://qo.worldbank.org/YL66jz85A0
http://morth.nic.in/
wikipedia.com
http://opennowledge.worldbank.org
www.globserver.com
www.ccap.org/korea
www.mopsofworld.com
www.gone2korea.com
http://qo.worldbank.org/YL66JZ858AO
http://morth.nic.in/
en.wikipedia.org/wiki/transport.in.india
gogreenindia.co.in
...
A
GLOBAL PROJECT REPORT
ON
SERVICE INDUSTRY OF SOUTH KOREA
SUBMITTED TO
C.K.SHAH VUJAPURVALA INSTITUTE OF MANAGEMENT
IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE
AWARD FOR THE DEGREE OF
MASTER OF BUSINESS MANAGEMENT
UNDER
GUJARAT TECHNOLOGICAL UNIVERSITY
UNDER GUIDANCE OF
MS. RANJEETA BANERJEE
SUBMITTED BY
1) ARJUN RATHOD
2) CHAITREE PARIKH
3) RACHANA CHAWDA
4) DHARMESH BARAIYA
5) DILIP CHHAIYA
6) PANKAJ HADIYA
107050592103
107050592104
107050592105
107050592107
107050592108
107050592110
M.B.A.-SEMESTER III
C.K.SHAH VIJAPURVALA ISTITITE OF MANAGEMENT
M.B.A PROGRAMME
AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY
AHMEDABAD
DEMOGRAPHIC PROFILE OF SOUTH KOREA
Age structure:
0-14 years
: 15.7%(male3,980,541/female3,650,631)
15-64 years
: 72.9%(male18,151,023/female17,400,809)
65 years and over: 11.4% (male 2,259,621/female 3,312,032) (2011 est.)
Population growth rate:

0.23% (2011 est.)
Birth rate:
8.55 births/1,000 population (2011 est.)
Death rate:
6.26 deaths/1,000 population (July 2011 est.)
Net migration rate:

0 migrant(s)/1,000 population (2011 est.)
Urbanization
Urban population
: 83% of total population (2010)
rate of urbanization
: 0.6% annual rate of change (2010-15 est.)
Sex ratio at birth
: 1.069male(s)/female
under 15 years
: 1.1 male(s)/female
15-64 years
65 years and over
total population
: 1 male(s)/female (2011 est.)
Infant mortality rate

Total
: 4.16deaths/1,000livebirths
male
: 4.37deaths/1,000livebirths
female
: 3.93 deaths/1,000 live births (2011 est.)
Life expectancy at birth

total
: 79.05years
male
: 75.84years
female
: 82.49 years (2011 est.)
Total fertility rate

1.23 children born/woman (2011 est.)
Ethnic groups
Homogeneous (except for about 20,000 Chinese)
Religions
Christian 26.3% (Protestant 19.7%, Roman Catholic 6.6%),
Buddhist 23.2%,
Other or unknown 1.3%,
Korean 49.3%
Languages
Korean, English (widely taught in junior high and high school)
Literacy
Definition
: age 15 and over can read and write
total population : 97.9%
male
: 99.2%
female
: 96.6% (2002)
Education expenditures
4.2% of GDP (2007)
Maternal mortality rate

18 deaths/100,000 live births (2008)
Health expenditures
6.5% of GDP (2009)
Hospital bed density

12.28 beds/1,000 population (2008)
ECONOMIC OVERVIEW OF SOUTH KOREA
South Korea has a market economy which ranks 15th in the world by nominal
GDP and 12th by purchasing power parity (PPP), identifying it as one of
the G-20 major economies.
South Korea had one of the world's fastest growing economies from the early
1960s to the late 1990s, and South Korea is still one of the fastest growing
developed countries in the 2000s, along with Hong Kong, Singapore,
and Taiwan, the other three members of Asian Tigers.
OVERVIEW OF INDUSTRIES, TRADE AND COMMERCE
Main Objective and Policy Goals
Policy Actions
1. Participation in Global Efforts to Build a Freer and More Open World
Economic Order
2. Strengthening
Regional
and
Bilateral Economic and Trade
Cooperation for the Global Age

3. Helping to Build a Freer and Fairer Domestic Market Environment
4. Strengthening the Basis for More Effective Policy Design and
Implementation
OVERVIEW OF DIFFERENT ECONOMIC SECTORS OF SOUTH KOREA
The biggest part of South Korean GDP is made up by the service industry
(about 55%), especially department stores, store chains and supermarkets.
The second most important South Korean trade sector, for which this country
is now famous all over the world, is the manufacturing sector (more than 40%
of the countrys GDP).
Lastly, agriculture contributes only to a small part of South Korean GDP

(about 4%).
OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL
Economic considerations have a high priority in Korean foreign policy. The

R.O.K. seeks to build on its economic accomplishments to increase its
regional and global role. It is a founding member of the Asia-Pacific Economic
Cooperation (APEC) forum and chaired the organization in 2005.
The Republic of Korea maintains diplomatic relations with more than 170
countries and a broad network of trading relationships. The United States and
Korea are allied by the 1953 Mutual Defence Treaty.
PRESENT TRADE RELATIONS AND OVERVIEW OF DIFFERENT
PRODUCTS IN INDIA
India
Republic of Korea
Population
1,190,340,000
48,758,000
Area
3,287,240 km2 (1,269,210 sq mi)
99,392 km2 (38,375 sq mi)
Population
Density
356/km (922/sq mi)
491/km2 (1,271/sq mi)
Capital
New Delhi
Seoul
Largest City
Mumbai 13,922,125 (21,347,412 Seoul 10,464,051 (24,472,063

Metro)
Metro)
Government
Federal parliamentary constitutional Unitary parliamentary constitutional

republic
republic
Official
languages
Hindi and English, 21

other constitutionally recognized
languages
Korean
GDP
(nominal)
$1.430 trillion ($1,176 per capita)[6]
$991.147
capita)
billion
($20,265
PESTEL ANALYSIS
Political Analysis:
The South Korean political system is classified under the constitution

aldemocracy governance which is divided into three major categories wh
ich areexecutive, judicial and legislative in the order of descending hierarc
hy.
Withthe president being highest in the hierarchy, South Korea holds a publi
c votingevery five years time for the presidential election.
Economic Analysis:
South Koreas economy has boosted and have come a long way after the affe
ct ofthe 1997 Asian financial crisis. Its GDP per capita (PPP) now stands at $2
4,800(World Factbook, 2008) with a real growth rate of 5%.
Socio - cultural Analysis:
The age structure of the South Koreanpopulation reveals the greater presence
ofthe younger generation that is between 15-65 years with a median age of 3
6.7year (The World Factbook, 2008).
Environmental Analysis
Environment section provides information on environmental policies in South

Korea and the performance in terms of important environmental indicators.
per
Legal Analysis:
Legal section on South Korea provides information about the legal structure,
corporate laws, business set-up procedures and the tax regime.
INTRODUCTION OF SERVICE INDUSTRY OF SOUTH KOREA
South Koreas service sector industries are:
1. Electronics,
2. Automobiles,
3. Telecommunication
4. Shipbuilding.
ROLE OF SERVICE INDUSTRY IN ECONOMY OF SOUTH KOREA
The services sector accounts for 57.2% of the country's GDP according to
the 2006 census.
The largest Service-industry companies in South Korea:

1. Samsung Electronics (Electronics)
2. Korea Electric Power (Utilities)
3. Hyundai Motor (Automotive)
4. Posco (Materials)
5. Kookmin Bank (Banking)
6. SK Corp (Oil & gas operations)
7. LG Electronics (Consumer durables)
8. Shinhan Financial (Banking)
STRUCTURE OF SERVICE INDUSTRY OF SOUTH KOREA
The structure of service industries of South Korea comprises for:
1) Financial services
Insurance
Banking
Real Estate
Business services
2) Trade, Transport and Communication

3) Hotels and Restaurants
4) Education and Health care
COMPARATIVE POSITION OF SERVICE SECTOR WITH INDIA
It includes comparison of various sectors of service industry of South

Korea with India.
It includes:
1. Financial services
Insurance
Real Estate
Banking services
Business services
2. Trade, transport and Communication
Railways
Road
Airways
Waterways
3. Hotels and Restaurants

4. Education and Health Care
PRESENT POSITION AND TREND OF BUSINESS WITH INDIA
Prime Minister Man Mohan Singh called on South Korea's small and medium
sized firms to make India their manufacturing base even as he lauded
conglomerates like LG, Hyundai and Samsung for showing confidence in the
country after it liberalised its markets in 1991 and becoming household
names.
Bilateral trade between the two countries had crossed USD 20 billion mark in
2011.
Bilateral trade between the two countries amounted to US$15.6 billion in 2009
and the targets have been set to double it to US$30 billion by 2014.
POLICIES AND NORMS OF SOUTH KOREA FOR SERVICE INDUSTRY

FOR IMPORT/ EXPORT INCLUDING LICENSING / PERMISSION AND
TAXATION
In response to the growing trend of regionalism, Korea considers these

agreements as a means to liberalise its trade and investment regimes to
rejuvenate the economy, secure export markets and promote regional
integration.
Korea's first such agreement was with Chile, which came into effect from
April 2004. Other important countries and blocs with whom Korea has
agreements are Singapore, Peru, EFTA, the US and ASEAN. Korea is also in
the process of negotiating several other trade agreements with other
countries/blocs such as Canada, Mexico, EU, MERCOSUR, China, Gulf Cooperation Council (GCC) and Japan.
PRESENT TRADE BARRIERS FOR IMPORT EXPORT OF GOODS
The basic trade barrier is foreign goods and services that run into direct
competition with South Korean offerings are often subject to market
access barriers.
AUTOMOBILES - The deal with the United States is supposed to end a tax
on engine displacement that U.S. automakers have said hurts sales of
their products.
BEVERAGES - The EU says South Korea has five government agencies

overseeing labelling, with foreign liquor companies are asked to provide 18
pieces of information for labels.
CONSTRUCTION - An import tax of 8 percent on building materials hurts

foreign firms who use the materials more.
MOBILE PHONES - Up to April, South Korea required all mobile phones

sold to contain Korean-market specific technology, which led many firms to
avoid the country due to re-engineering difficulties.
INTELLECTUAL PROPERTY - While South Korea has made progress in

addressing intellectual property infringement, the EU has complained of
lax enforcement of existing laws.
Ambitious plans for the development of physical infrastructure. Planning to

secure investment of almost $1 trillion in the next five years in new projects in
highways, power plants, mass transport systems, ports and airports. This will
be achieved through both public and private investment and Public-Private
Partnerships.
Determined to pursue a strategy of green growth. Committed to increasing

energy efficiency and the share of renewable, including solar and nuclear
power, in the energy mix. There will be large business opportunities and I am
aware of Korean capabilities in environmentally friendly technologies.
Korean companies have always recognized these strengths and competitive

advantages of the Indian economy. They were among the early investors to
look at India as a strategic investment destination, as Hyundai has a 25
percent market share in India's domestic passenger car industry.
Noting that after the implementation of Comprehensive Economic Partnership

Agreement (CEPA) on January 1, 2010, bilateral trade has surged by roughly
65 percent in two years and reached $20.6 billion in 2011. However, it is still
below its huge untapped potential.
There for President Lee of South Korea and Manmohan Singh (Prime Minister
of India) decided to revise the bilateral trade target to $40 billion by 2015. This
is a challenge as well as an opportunity that both the country must both seize
together.
CONCLUSION
Liberalization of Korea's service sector was once limited to protect local

service industries. However, the government has taken a number of actions
toward its eventual full opening. So as a result of government action around 57.2
percent of South Korean GDP is made up by the service industry.
The largest Service-industry companies in South Korea are Samsung

Electronics (Electronics), Korea Electric Power (Utilities), Hyundai Motor
(Automotive), Posco (Materials) Kookmin Bank (Banking), SK Corp (Oil & gas
operations),
LG
Electronics
(Consumer
durables),
Shinhan
Financial
(Banking).
Most of the people in South Korea are employed by a chaebol; chaebol refers
to a South Korean form of business conglomerate. The Korean word means
"business group" or "trust" and is often used the way "Big Business" is used in
English. The government and chaebol cooperation was essential to the
subsequent economic growth and astounding successes that began in the
early 1960s.
The main services which we have include in our study are:

1. Financial services
Insurance
Banking
Real Estate
Business services
2. Trade, Transport and Communication

3. Hotels and Restaurants
4. Education and Health care

For
financial
services
they
have
The Financial
Services
Commission (FSC), formerly Financial Supervisory Commission. Which is South

Korean government's top financial regulator. It makes financial policies, and
directs the Financial Supervisory Service. Like in india ministry of finance makes
policies and norms with the help of RBI (Reserve Bank of India), IRDA (insurance
Regulatory Development Authority), and SEBI (Security and Exchange Board o
India).
South Korean has second largest insurance market and third largest banking
market in the world. But due real estate sector is not so much developed as
compare to onsurance and banking sector. South Korea communications
boasts of an extensive network of railways, bus routes, highways, air routes
as well as ferry services, laid across the country. The performance of the
hotel industry is forecast to accelerate, with an anticipated CAGR of 8.1% for
the five-year period 2009-2014, which is expected to drive the industry to a
value of $6.4 billion by the end of 2014. Education and healthcare services
are also very developed abd advancesd as the government is very much
involved in healthcare and education.
India and South Korea are politically and economically liberalized. Trade
between the two has thrived right from the beginning of this decade which is
evident from the various treaties and MoUs signed by the two countries.
Bilateral trade between the two countries amounted to US$15.6 billion in 2009
and the targets have been set to double it to US$30 billion by 2014.
Investment from South Korea is a "priority" for India, visiting Prime

Minister Man Mohan Singh said on 26th march 2012, adding that the
government was taking "proactive" steps to improve the business climate and
move forward with the Posco mega steel plant project in Orissa that has been
plagued by farmer protests.
Prime Minister Manmohan Singh has revise the bilateral trade target to $4o
billion by 2015 with South Korea as there is a huge future potential for
business opportunity with South Korea.
As far as bilateral trade in services between India and Korea is concerned,

there is lack of data, but it is believed that trade in services between the two
countries is increasing rapidly, at least in some sub-sectors especially in
IT/software services and travel services.
BIBLIOGRAPHY
www.businessweek.com/managingcontent
www.en.wikipedia.org
www.mengabay.com
www.korea.net
www.state.gov
www.economywatch.com
www.marketresearch.com
www.britanica.com
www.foreigntradepolicy.pdf
http:/eiustore-south koreahealthcare
asianius research
Global Country Project Report

ON
CULTURAL dIFFERENCE bETwEEN INdIA ANd

SOUTH KOREA
Submitted to
Under
Faculty Guide:
Dr. Umesh Shah (Visiting faculty, cksvim)
Submitted by:
1) Kapadiya Heenaben
107050592111
2) Makwana Bhavin
107050592112
3) Manoj Mer
107050592113
4) Ankita Chauhan
107050592114
5) Ashish Parmar
107050592115
6) Kamleshkuma Vaghela
107050592116
M.B.A 3rd SEMESTER

M.B.A PROGRAMME
Ahmadabad
November - 2011
Executive summary
In GP our group doing work on cultural difference between India and South
Korea. Both countries have different culture. There is several relevance cultural
factor and several different factors in both the countries.
This study differentiates the culture of both countries. There are several cultural
factors like cuisine, media, art, technology, architecture, literature, festivals,
language and other factors which are different from each other.
Here differentiate several following cultural factors of India and South Korea.
Cultural factors of India
Cultural factors of South

Korea
Arts and crafts
Arts and crafts
Architecture
Architecture
Cuisine
Cuisine
Literature
Literature
Language
Language
Festivals
Technology
Performing art
Performing art
We are trying to find out the effect of cultural factors on cross boarder country
relationship and how its affect the cross boarder transaction and also trying to
find out how this cultural factors help to India and South Korea to develop the
cross boarder relationship and how countries get benefit from this factor to
increase the cross boarder transaction and relationship.
The issue of cultural identity in south korea
The issue of cultural identity first arose from the sense of cultural discontinuity
between Korean traditional culture and contemporary culture, owing to the
influence of Japanese colonialism (19101945), the divided Korea (1945present), the Korean War (19501953), rapid modernization and the apparently
indiscriminate influx of western culture. Given these various circumstances,
Korean traditional culture has tended to become eroded and swiftly transformed,
and furthermore, to some extent, has given way to western culture in terms of the
way of life of the people.
The contemporary culture of South Korea developed from the traditional culture
of Korea, and on its own path away from North Korean culture since the division
of Korea in 1948. The industrialization and urbanization of South Korea,
especially Seoul, have brought many changes to the way Korean people live.
Changing economics and lifestyles have led to a concentration of population in
major cities (and depopulation of the rural countryside), with multi-generational
households separating into nuclear family living arrangements.
About the South Korean culture
This report will focus particularly on how the Korean government has sought to
deal with the issue of cultural identity through the evolution of cultural policy.
Firstly, the primary causes of the issue of cultural identity will be identified in the
light of cultural policy. Subsequently, this article will discuss how the issue of
cultural identity has affected cultural policy. In addressing these issues, the article
seeks to identify the distinctive characteristics of Korean cultural policy and how
the government itself has justified its policy objectives through the evolution of its
cultural policy. In doing so, the article will consider those policy objectives stated
in the comprehensive plans for cultural policy, as established by the government
since 1973. In addition, the article considers the cultural policy programs and the
content of formal speeches made by the presidents.
We include the several factors of South Korea are as:

Academics
South Korea's academic environment is extremely competitive. Korean society
regards getting into a prestigious university as a prerequisite to success. Most of
a student's career is focused on admission to such universities, although this
attitude has shifted in recent years.
Literature
In modern poetry, there were attempts at introducing imagist and modern poetry
methods particularly in translations of early American moderns such as Ezra
Pound and T. S. Eliot in the early 20th century. In the early Republic period,
patriotic works were very successful.
Journalism
South Korea has 10 main newspapers and 3 main broadcasters. Top three daily
newspapers are Chosun Ilbo, Joongang Ilbo, and Donga Ilbo. The Hankyoreh is a
left-leaning newspaper. KBS, MBC, and SBS are the main TV channels. Also,
there is EBS for student and adult education.
Technology
An estimated 98% of South Koreans own mobile phones and use them not only
for calling and messaging but also for watching live TV, viewing websites and
keeping track of their online gaming statuses. South Korean corporations
Samsung and LG are the second and third largest cell phone companies in the
world, and South Koreans are usually among the first to experience innovative
technology.
Film and television

Since the success of the Korean film Shiri in 1999, Korean film has become much
more popular, both in South Korea and abroad. Today South Korea is one of the
few countries where Hollywood productions do not enjoy a dominant share of the
domestic market. This fact, however, is partly due to the existence of screen
quotas requiring cinemas to show Korean films at least 73 days a year.
Korean animation
The animation studios have increasingly been given new contract work for
Korean series. The most famous has been the animation of Korean folklore by
KBS in a 150 part series. This series uses 2-D animation, suggestions for scripts
and stories by local crew, and was produced "with the object to create a new
"Korean Wave animation" that is distinct from Disneymation".
Architecture of South Korea

Architecture of South Korea may be similar to that of its adjacent nations like
China and Japan, yet it stands out for its own distinguishing approach. Being a
glorious part of the Arts and Crafts of South Korea, the architecture of this nation
has a long cultural background.
Arts and Crafts in South Korea
Arts and Crafts in South Korea include everything from painting, sculpture,
pottery, architecture and even performing arts like music and dance. Boasting a
long history and strong background South Korean Art and Craft is undoubtedly
brings you closer to the real essence of the nation.
South Korean Cuisines
The bounty of South Korea's productivity reflects greatly in it cuisine. Making
great use of the homegrown vegetables, a South Korean Meal is absolutely
wholesome. Most of the dishes accompany the staple diet rice, which is known as
'bap' in Korean. Equally popular are Rice noodles, known as 'chapche' in Korean
and bean curd, called 'duboo' in the native language.
South Korea Language
The official South Korea language is Korean. In fact, the Korean language is the
official language in South Korea and North Korea, and also one of the two official
languages of the Yanbian Korean Autonomous Prefecture in China. The South
Korea language flaunts ancestry and aristocracy and is recognized as the
language that has given rise to some of the greatest and richest literature, music
and poetry.
South Korea Etiquette
Knowing about South Korea etiquette is a pleasant way to forge a better
understanding of the culture of South Korea. South Korea etiquette, in most
cases, would seem quirky, but delve a bit more into them and you will actually
come up with a keener insight into the customs and traditions of this ancient land,
apart from getting around in South Korea without offending the natives.
South Korea Festivals and Events
To begin with the Lotus Lantern festival is one of the most vibrant fiestas of South
Korea. The carnival marks the birthday celebrations of Lord Buddha. Lotus
shaped lanterns are prepared and lit in the evening along with many other
celebrations. It s a traditional festival which reflects the culture of the country.
About the Indian culture
The culture of India is one of the oldest and unique. In India, there is amazing
cultural diversity throughout the country. The South, North, and Northeast have
their own distinct cultures and almost every state has carved out its own cultural
niche.
Culture and Heritage

The Ministry of Culture plays a vital role in the preservation and promotion of art
and culture. Its aim is to develop ways and means by which basic cultural and
aesthetic values and perceptions remain active and dynamic among the people.
Religions and spirituality
India is the birth place of Hinduism, Buddhism, Jainism and Sikhism, collectively
known as Indian religions. Indian religions, also known as Dharmic religions are a
major form of world religions along with Abrahamic ones.
Marriage
It is a system under which extended members of a family parents, children, the
childrens spouses and their offspring, etc. live together. Usually, the eldest
male member is the head in the joint Indian family system. He makes all
important decisions and rules, and other family members abide by them.
Greetings
Namaste, namaskar or Namaskara or Namaskaram (Telugu), Vanakkam (Tamil),
Nomoshkaar (Bengali), Nomoskar (Assamese) ) is a common spoken greeting or
salutation in the Indian subcontinent. Namaskar is considered a slightly more
formal version than Namaste but both express deep respect.
Festivals
India, being a multi-cultural and multi-religious society, celebrates holidays and
festivals of various religions. The four national holidays in India, the
Independence Day, the Republic Day, the Gandhi Jayanti,and 1st may are
celebrated with zeal and enthusiasm across India. Popular religious festivals
include the Hindu festivals of Navratri, Diwali, Ganesh Chaturthi, Durga puja, Holi,
Rakshabandhan and Dussehra.
Names and language

Indian names are based on a variety of systems and naming conventions, which
vary from region to region. India's population speaks a wide variety of
languages.Such as Tamil Assamese Bengali Bodo Chhattisgarhi Dogri
Garo Gujarati Standard Hindi Kannada Kashmiri Khasi Kokborok
Konkani Maithili Malayalam Manipuri Marathi Mizo Nepali Oriya
Punjabi Sanskrit Santali Sindhi Telugu Tulu Urdu
Cuisine
The cuisine in India is classified into three major categories. Sattva, Rajas, and
Tamas. Sattva which stand for balance, Rajas stands for passion, and Tamas
stands for indulgence. Food is consumed according to the lifestyle of the person.
Clothing
In India, a person's social status is perceived to be symbolized by his or her attire.
Indian dress etiquette discourages exposure of skin and wearing transparent or
tight clothes. Most Indian clothes are made from cotton which is ideal for the
region's hot weather. Since India's weather is mostly hot and rainy, majority of
Indians wear sandals.
Literature
Sanskrit has had a profound impact on the languages and literature of India.
Hindi, India's most spoken language, is a "Sanskritized register" of the Khariboli
dialect. Part of the Eastern Indo-Aryan languages, the Bengali language arose
from the eastern Middle Indic languages and its roots are traced to the 5th
century BC Ardhamagadhi language.
Performing arts
Indian dance too has diverse folk and classical forms. Among the well-known folk
dances are the bhangra of the Punjab, the bihu of Assam, the chhau of
Jharkhand, the Odishi of Orissa, the ghoomar of Rajasthan, the dandiya and
garba of Gujarat, the Yakshagana of Karnataka and lavani of Maharashtra and

Dekhnni of Goa.
Drama and theatre
Indian drama and theatre has a long history alongside its music and dance.
Kalidasa's plays like Shakuntala and Meghadoota are some of the older dramas,
following those of Bhasa. One of the oldest surviving theatre traditions of the
world is the 2,000 year old Kutiyattam of Kerala.
Architecture
The traditional system of Vaastu Shastra serves as India's version of Feng Shui,
influencing town planning, architecture, and ergonomics. It is unclear which
system is older, but they contain certain similarities.
Contemporary Indian architecture is more cosmopolitan. Cities are extremely

compact and densely populated. Mumbai's Nariman Point is famous for its Art
Deco buildings. Recent creations such as the Lotus Temple, and the various
modern urban developments of India like Chandigarh, are notable.
Temples in India
The cultural hues of India have never failed to allure people across the world.
One of the factors that influence the Indian culture is religion. With India being a
melting pot of several religions, the country has a rich treasure of religious
monuments. However, India is mainly known for its exquisite Hindu temples,
which have never failed to enthrall the tourists.
Kashi Vishwanath temple, India
Golden Temple, India
Iskon Temple, India
Automotive industry in South Korea

South Korea's auto parts industry grew rapidly in the late 1980s, from US$3.8
billion in 1987 to US$4.6 billion in 1988 (US$4 billion produced locally).
Automotive parts imports, most of which came from Japan, totaled US$610
million in 1988 (down from US$700 million in 1987). In 1989 South Korean
automobile and parts manufacturers planned to spend more than 2 trillion won
(US$2.8 billion) on facility expansion, research, and development.
Automotive industry in India
The Automobile industry in India is one of the largest in the world and one of
the fastest growing globally. India's passenger car and commercial vehicle
manufacturing industry is the seventh largest in the world, with an annual
production of more than 3.7 million units in 2010. According to recent reports,
India is set to overtake Brazil to become the sixth largest passenger vehicle
producer in the world, growing 16-18 per cent to sell around three million units in
the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of
passenger cars, behind Japan, South Korea, and Thailand.
Hyundai Motor Company in South Korea
Hyundai Motor Company is a Korean multinational automaker based in Seoul,
South Korea which, along with Kia, comprises the Hyundai Kia Automotive
Group, the world's fourth largest automaker as of 2009. As of 2011, it is the
world's fastest growing automaker for two years running. In 2008, Hyundai
(without Kia) ranked as the eighth largest automaker.
Hyundai has 6 centers worldwide, located in Korea (three offices), Germany,
Japan and India. Additionally, there is an American design center in California
that develops designs for US markets.
Hyundai motor company in India

Hyundai Motor India Limited is currently the second largest carmaker after Maruti
Suzuki and largest auto exporter in India. It is making India the global
manufacturing base for small cars. Hyundai sells several models in India, the
most popular being the Santro Xing, i10 and the i20.
Hyundai has two manufacturing plants in India located at Sriperumbudur in the
Indian state of Tamil Nadu. Both plants have a combined annual capacity of
600,000 units.In the year 2007 Hyundai opened its R&D facility in Hyderabad
Andhra pradesh, employing now nearly 450 engineers from different parts of the
country.
Iron & steel sector in South Korea
When the Korean government proposed the construction of an integrated iron
and steel plant to the World Bank for possible project funding, the World Bank
responded with a diagnosis saying that an integrated steel mill in Korea was a
premature proposition without economic feasibility. Indeed, Korea faced several
challenges in developing its steel industry. Korea lacked iron ore resources and
was located far from the sources of supply. Finally, Korea lacked steel-making
skills and manpower. As is typical of many mature industries, the steel making
process is embodied in the process facilities.
Iron & steel sector in India
Steel is the cornerstone of every countrys economic development plan. Over the
years, India has been witnessing a steady growth in the production and
consumption of steel, which is seen as an indicator of her growing economic
prowess. In 2009 despite the impact of financial crisis, India became the fifth
largest steel producer in the world, producing close to 56.6 million metric tons of
steel representing a YOY growth of approximately 2.7 per cent.
Work culture Posco in India
1. Our fundamental responsibilities

2. Our
commitment
to
our
customers,
business
partners,
and
competitors
3. Our commitment to our stockholders and investors
4. Our commitment to our employees
5. Our commitment to local, national, and global communities
Rules of conduct
1. Follow sound and fair trading principles

2. Avoid conflicts of interest
3. Avoid misuse of company assets or information
4. Protect confidential information
5. Create a culture of mutual trust and respect
6. Respect social norms and reputations.
7. Establish a culture of ethical excellence
Trade relationship between in India & South korea
India shares cordial relations with South Korea since 1962. However, the
presence of South Korean President Lee Myung-bak, as the Chief Guest for the
January 26 Republic Day celebrations will further strengthen the ties between the
two nations.
The visit by an Indian President Abdul Kalam to South Korea in 2006 gave further
boost to the trade relation between the two states. It was first-ever visit by an
Indian President to the Republic of Korea which saw signing of a Comprehensive
Economic Partnership Agreement.
o Trade
o Tourism and Cultural ties
o Education
o Non-Resident Indians in South Korea

Adverse Impacts of POSCO's India project
On 2nd May 2011, Indian Environment and Forest Minister Jairam Ramesh finally
approved the diversion of over 3,000 acres of forest land, of the 4,000 acres
demanded, for a steel-power-port complex of the POSCO India project.
o Forest Rights denied is violation of Fundamental Rights
o Authorizing the loot of India's natural resources:
o The Making of a 'Right-less People' by Jairam Ramesh
India and South Korea Relationship
Trade between the two nations has increased exponentially, exemplified by the
$530 million during the fiscal year of 1992-1993, and the $10 billion during 20062007. During the 1997 Asian financial crisis, South Korean businesses sought to
increase access to the global markets, and began trade investments with India.
The last two presidential visits from South Korea to India were in 1996 and 2006,
and the embassy works between the two countries are seen as needing
improvements. Recently, there have been acknowledgments in the Korean public
and political spheres that expanding relations with India should be a major
economical and political priority for South Korea.
Multiculturalism in contemporary Eastern societies
India
Religiously, the Hindus form the majority, followed by the Muslims. The actual
statistics are: Hindu (80.5%), Muslim (13.4%, including both Shia and Sunni),
Christian (2.3%), Sikh (2.1%), Buddhist, Bah', Jain, Jew and Parsi populations.
Linguistically, the two main language families in India are Indo-Aryan (a branch of
Indo-European) and Dravidian.
Korea
o
The number 4 is considered unlucky, so gifts should not be given in

multiples of 4. Giving 7 of an item is considered lucky.
Blowing one's nose at the table, even if the food is spicy, is mildly
offensive. If necessary, take a trip to the toilet or at least be very discreet.
When someone of a significantly higher social position pours you a drink, it

is considered proper to turn away from that person when you drink it.
Caste in India
Indian society has consisted since ancient times of several thousand tribal and
occupational groups or communities called Jti. The phrase "Caste System"
conflates the reality and theory - the reality of the Jti system prevalent
throughout the Indian society since ancient times and the varna (class/group),
theoretical scheme based on idealise Brahminical traditions.
Caste in Korea
The Baekjeong were an "untouchable" minority group of Korea. The term
baekjeong literally means "a butcher", but later changed into "common citizens" to
change the class system so that the system would be without untouchables. In
the early part of the Goryeo period (918-1392), these minority groups were
largely settled in fixed communities. However, the Mongol invasion left Korea in
disarray and anomie, and these groups became nomadic. Other subgroups of the
baekjeong are the chaein and the hwachae. During the Joseon dynasty, they
were specific professions like basket weaving and performing executions.
Bibliography
www.google.com
www.wikipedia.org
www.asiahomes.com
A
Global country Study Report
On
TECHNOLOgICAL INNOVATION IN SOUTH KOREA
Submitted to
C.K.SHAH VIJAPURWALA INSTITUTE OF MANAGEMENT
MASTERS OF BUSINESS ADMINISTRATION
Mr. Yogen Shah
Faculty, CKSVIM
Submitted By
1) Shikhar Mathur
107050592117
2) Nikita Soni
107050592118
3) Jay Shah
107050592119
4) Neelam Jain
107050592120
MBA SEMESTER-III
C. K SHAH VIJAPURWALA INSTITUTE OF MANAGEMENT

M.B.A PROGRAMME
Ahmedabad
November 2011
1. Introduction of Technology Innovation in South Korea

The growth of South Korea as a major contributor in the field of science,
engineering and technology can be considered a story for many growing
economies to emulate. Koreas gross domestic product in 1961 was only $2.3
billion or $82 per capita. Also, international economic interactions were minuscule
with insignificant exports and huge imports.
If Korea is considered a dynamic economy now, then it is due in part to the
policies followed by the country with respect to science and technology. Later
they emphasis on scientific
research
and
basic system of
innovation for
economy growth.
Koreas economic development plan drawn up in 1962 strived to put an industrial
base in place that could support both import substitution and export promotion.
Korea encouraged reverse engineering, original equipment manufacturing and
foreign licensing methods.
Korean firms benefited a lot as workers gained technological know-how from
foreign buyers. Workers gained immense knowledge in the garment and
electronics industries. Koreas economic development plan drawn up in 1962
strived to put an industrial base in place that could support both import
substitution and export promotion. Korea encouraged reverse engineering,
original equipment manufacturing and foreign licensing methods. Koreas
success in the engineering field was due to investments in research for which it
needed educated personnel.
2. Role of Technology in South Korea:

The
most
important
sources
of
productive
growth
for
South
Korean
manufacturers had traditionally been directly or indirectly related to the ability of

South Korean companies to acquire new technology from abroad and to adapt it
to domestic conditions, rather than paying the cost of research and development.
The Seoul government began investing in technology research institutes soon
after the republic was established. The Korean Atomic Energy Commission
founded in 1959 was responsible for research and development, production,
dissemination, and management of technology for peaceful applications of atomic
energy. In the mid-1960s, the government established the Ministry of Science
and Technology to oversee all government research and development activities

and the Korea Institute of Science and Technology to function as an industrial
research laboratory.
South Korean planners realized that the country needed to advance quickly in
such areas as high technology if the economy were to grow while matching
foreign competition. The Pohang Institute of Science and Technology also
maintained a major undergraduate and graduate school. By 1988 the institute
had a faculty of 132 teachers, about 500 undergraduate students, and
approximately 110 graduate students.
In 1990 Seoul announced an ambitious plan to promote science and technology

so that high-technology activities would dominate the economy by the year 2000.
The anticipated slowdown in economic growth could well be counteracted by the
continued high rate of capital formation, increased productivity of labor, and
expansion of the education system.
Accordingly, Seoul selected its comparative advantage areas, including

informatics-- particularly information storage and retrieval and electronic data
processing, fine chemicals, and precision machinery in the short term;
biotechnology and new materials in the mid-term; public benefit areas, such as
the environment, health, and welfare, as another group; and oceanography and
aeronautics for the medium and long term.
3. Four Main Technologies in South Korea:

We have focused mainly on four technologies i.e. Aerospace, Robotics,
Biotechnology and Information & Communications. These
industries
have
contributed in growth of South Korea in economy , GDP, employment and help

to grow faster.
3.1 AEROSPACE Technology
Introduction
Modern aerospace began with Sir George cayley in 1799. Cayley proposed an
aircraft with a "fixed wing and a horizontal and vertical tail," defining
characteristics of the modern airplane.
Aerospace Research in South Korea:

South Korea has sent up 10 satellites from 1992, all using foreign rockets and
overseas launch pads, notably Arirang-1 in 1999, and Arirang-2 in 2006 as part of
its space partnership with Russia.Arirang-1 was lost in space in 2008, after nine
years in service.
In April 2008, Yi So-yeon became the first Korean to fly in space, aboard the
Russian Soyuz TMA-12. In June 2009, the first spaceport of South Korea, Naro
Space Center, was completed at Goheung, Jeollanam-do.
Korea aerospace research institute:

The Korea Aerospace Research Institute (KARI) is the aeronautics and space
agency of South Korea. Its main laboratories are located in Daejeon, in the
Daedeok Science Town. Current projects include the KSLV launcher. Past
projects include the 1999 Arirang-1 satellite. The agency was founded in 1989.
Prior to South Korea's entry into the IAE in 1992, it focused primarily on
aerospace technology.
3.2 ROBOTICS INDUSTRY

Introduction
The South Korean robotics industry experienced record growth last year in
output, sales and exports, as increased investments in manufacturing facilities
raised productivity levels and technical expertise for 395 firms surveyed by the
Korea Association of Robot Industry. According to the survey, combined sales for
the 395 firms nearly doubled to 1.93 trillion won in 2010 (US$1.827 billion) from
2009 to 2010.
"The robotics industry tends to be affected by facility investment because

industrial robots are regarded as part of assembly lines," said an Korean official
from the Ministry of Knowledge Economy. "Government subsidies and pilot
projects play a big part as well."
Korea is the world's 4th largest robot manufacturer after Japan, Germany and the
US. By 2018, the International Federation of Robotics expects global market
demand to reach US$100 billion.
Robotics Research:
Much of the research in robotics focuses not on specific industrial tasks, but on
investigations into new types of robots, alternative ways to think about or design
robots, and new ways to manufacture them but other investigations, such as
MIT's cyberflora project, are almost wholly academic.
A first particular new innovation in robot design is The second is Evolutionary

Robots. This is a methodology that uses evolutionary computation to help design
robots, especially the body form, or motion and behavior controllers. the open
sourcing of robot-projects. Over time the population improves, and eventually a
satisfactory robot may appear.
3.1 BIO-TECHNOLOGY INDUSTRY
Introduction
Biotechnology industry has been recognized as one of the future engines for
development and required to drive the world economy in the wake of the success
of information and communication tech The South Korea government has
selected biotechnology as one of the areas that needs national support and
intensive fostering. Along with research and development in the biotechnology

area.
The South Korea biotechnology industrys production reached US$2.42 billion in
2004, growing at 35.7% annually in the 2001-2002 period and 16.3% in2004.
South Koreas biotechnology industry accounted for 2.6% of the world market in
2004. Exports for year 2004 reached at US$1.1 billion.
Key Sectors of Biotechnology Industry

The biggest sector biomedical technology at 59.7% of the total biotechnology
market, biofood at 13.1%. The other key biotechnology sectors are bioprocessing
and machinery (8.9%), biochemical (8.5%), bioenvironmental technology (5.8%)
and bioinformatics (3%).
Biomedical, biochemical, bioprocessing and biofood are main sectors with high
annual growth in the South Korea. These sectors are also have high research
funding and in demand for research cooperation with advanced countries.
Market Sectors in biotechnology industry
Main sectors
Biomedicine
Environmental Biotechnology
Bioinformatics
Nanobiotechnology
3.4 INFORMATION AND COMMUNICATION TECHNOLOGY
Introduction:
The worldwide explosion of information and communication technologies
profoundly affected economic growth and society in the Republic of Korea in the
1990s and early 2000s. The Republic of Korea can largely be considered a
success as a developing country that has harnessed ICTs for economic growth
and social transformation.
Information and Communication Technology:

South Korea is particularly well suited to success in ICT-driven economic
development. It has a relatively high GDP per capita (around US$ 9000 in 2001,
according to the World Bank), literacy rates of over 95%, openness to foreign
trade, a liberalized telecommunications sector, a history of pro-active industrial
policy, and a population of close to 50 million, 70% urbanized, all in a land area
the size of Indiana.
Communications Technology
Communications services improved dramatically in the 1980s with the assistance
of foreign partners and as a result of the development of the electronics industry.
The number of telephones in use in 1987 reached 9.2 million, a considerable
increase from 1980, when there were 2.8 million subscribers (which, in turn, was
four times the number of subscribers in 1972).
IT and Broadband Development
Today, South Korea has the highest number of broadband users. The rapid
growth of the Korean broadband market was the result of a combination of
government pushes and market factors.
The government implemented structural reforms in July 1990. Since the mid1990s, the Ministry of Information and Communications (MIC) has pursued a
policy of high-speed telecommunication infrastructure as a foundation to build a
knowledge-based society.
The Effect of ICTs on South Koreas economy:

New industries and economic sectors or sub-sectors (e.g. the software industry,
cell phones, computers and peripherals)
New ways of doing business (e.g. e-commerce, globally distributed
organizations, integrated supply chains)
New tasks and opportunities for government (e.g. e-government, privacy policy
legislation, ICT industrial policy)
New issues in economic and political development (e.g. availability of
information access, computer literacy, the digital divide)
4. POLICIES AND NORMS RELATED TECHNOLOGY IN SOUTH KOREA:
1960 to 1980Establishment of the first state-owned research institute Korean Institute of
Science and Technology (KIST) and Ministry of Science and Technology .
1960s: development of import substitution industries, dominance of agriculture
and textile sectors owing to cheap labor Foreign direct investment and technology
transfers
1970s: Shift to heavy industry Incentives to improve domestic R&D capacity
1980-1990National R&D Program (1982)
Technology transfer and research institutes proving insufficient alone, incentives
for firms to establish and develop R&D structures of their own .
1990-2000Formation of National Council of Science and Technology
Five-year innovation plan
Science and Technology Vision 2025 (1999)
2000 onwardsPreparation of the first national technology roadmap

Restructuring of the Ministry of Science and Technology
5. BUSINESS OPPORTUNITIES IN FUTURE

In Aerospace industry
As per the visit to South Korea by Indian Prime Minister Manmohan Singh,
offered Indian facilities to launch South Korean satellites. As it is, the Indian
space programme has built up a sound reputation for launching small research
and application satellites in a cost effective and hassle free manner by making
use of the potentials of the four-stage space workhorse PSLV (Polar Satellite
Launch Vehicle).
both the countries agreed for defence cooperation with a focus on the
possibilities of joint ventures in research and development and manufacture of
military equipment including through the transfer of technology and co
production. South Korea wanted to boost its cooperation with India in military
and defence industry including the construction of naval ships and aircraft.
In biotechnology Industry
With global market trends, the public and private sectors are increasing
investments in the biotechnology industry.
To offset these, the South Korea government place investment priorities on
specific segments of the biotechnology industry:
(1) Priority sector: Biomedical industry
Modified new medicine: structure-modified new medicines
Original new medicine: diabetic/corpulence remedy, immunity

function controlling, cerebral paralysis
Creative new medicine: new enzyme and accepto
(2) Priority market: Cell remedy, gene remedy

(3)Priority technology: Metabolism engineering technology, enzyme engineering
technology.
6. CONCLUSION
South Korea managed to be an attention-attracting country with its success in
economic development and the striking advance it made in the fields of
innovation and R&D. S. Korea which performed worse than Turkey in terms of
per capita GDP and R&D activities until 1980s completely reversed this situation
from that point on and achieved not only considerable growth performance but
also an impressive technologic advance.
Industrial strategy of S. Korea and R&D advancement processes were examined

under three processes: imitation, transformation and innovation. in S. Korea
development activities constitute a large proportion of overall R&D activities
which accelerates the introduction of new products to the market. In the recent
years policy focus in S. Korea has shifted towards turning the R&D system into
an integrated innovation system and expanding basic research to secure the
sustainability of economic growth.
South Korea is the most wired country on the planet. Some South Koreans can
get up to 20 megabits of data per second -- breakneck speed by today's
standards. Americans are lucky if they get 4 Mbps.
Thus, we can say that the growth of South Korea as a major contributor in the
field of science and technology can be considered as a story which will help many
growing economies to emulate
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2012

Country Study: China

GLOBAL / COUNTRY STUDY AND REPORT

"India and China Education Sector:

C.K.Shah Vijapurwala Institute of Management

OVERVIEW OF THE CHINESE ECONOMY

The Chinese government faces numerous economic challenges,

Economy's huge transformation. Economic development has progressed

OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL

PRESENT TRADE RELATIONS AND BUSINESS VOLUMES BETWEEN INDIA

( I ) Bilateral Institutional Mechanisms

India export to china

China export to India

Total India china trade

India china total trade crossed the target of US $ 60 billion

CHINA PEST ANALYSIS

Ban on console games

Ban on certain online games

video gamers and online gamers

Limited trade between China and

Not all areas in China have the

INTRODUCTION OF EDUCATION SECTOR IN CHINA

The Chinese education system

The ROLE of Higher Education on China

numerous students have been convinced of just that as higher

education in China continues to develop rapidly and has taken on a prosperous

Since the implementation of reform and development of higher education, both

Role of education in China's Unemployment

COMPARISION BETWEEN INDIA AND CHINA

Ranked 45th. 25% more Ranked 65th.

Ranked 78th. 13% more Ranked 116th.

Ranked 93rd. 20% more Ranked 164th.

by level > Tertiary level

Ranked 2nd in 2002. 34% Ranked 3rd in 2002.

Ranked 6th in 1991. 51% Ranked 49th in 1991.

Ranked 130th. 14% more Ranked 152nd.

more than China

more than China

more than China

Ranked 71st in 2003.

Ranked 26th in 2003.

Ranked 31st. 7 times

education, total > % of

student > Primary level

Ranked 107th. 18%

Ranked 81st in 2004.

Ranked 27th in 2004.

more than China

Universities > Top 100

Ranked 7th. 100% more Ranked 14th.

Ranked 12th. 167% more Ranked 26th.

Ranked 10th. 100% more Ranked 20th.

literacy rates, aged 15-

Present position and trend of education sector during

India Education Industry: Demand and Opportunities

To promote Chineseness in education, efforts were shown in the colonial

(1) The employment of Hanlin teachers

To ensure the educational quality of international graduate students and to

1. Enrolment and Administrative Duties

Policies and norms of India for education sector for import

BUSINESS OPPORTUNITIES IN FUTURE

Increases in tertiary education and English education would allow China to

India's information technology expertise and improved communication