an analysis for india and china - icrier

glass and glassware and tin and articles thereof. In the category of machinery and
equipment, China has attained comparative advantage in nuclear reactors, boilers,
machinery, etc in 2003. In the chemicals and plastics category, China is advantageously
placed in the world market vis-à-vis India only for explosives, pyrotechnics, matches,
pyrophorics, etc in 2003. The comparative advantage enjoyed by China in 2000 in
inorganic chemicals, precious metal compound, isotopes is however lost in 2003. India
on the other hand holds relative comparative advantage for organic chemicals and
tanning, dyeing extracts, tannins, derivs, pigments etc.
The analysis of comparative advantage for manufacturing sector according to
factor intensity reveals substantial similarities in the structure of international
specialization for both India and China. Across all levels and systems of classification the
comparative advantage for both the countries is observed to be predominantly in the labor
and resource intensive manufactures. Sectors like textiles (yarn, fabric, made-up articles
n.e.s and related products) and articles of apparel and clothing accessories dominate in
these categories for both the countries. The next largest category is that of manufactures
that makes a high demand for skill, technology, capital and scale. Organic chemicals
followed by inorganic chemicals occupies a predominant position in this category. At a
more disaggregated level India’s comparative advantage is observed to be in the unskilled
labor intensive commodity category.
For the science-based manufactures India and China are advantageously placed in
the same commodity sectors. Science- based industries contribute less than 10 per cent of
the comparative advantage in the manufacturing sector in India and China. In absolute
terms though, China’s science based industries are almost double the number in India. In
the Indian context, the category of medicinal and pharmaceutical products is predominant
while in China the category- photographic apparatus, equipment and optical goods
dominates. In the leading science- based commodity categories, China enjoys more than
double the comparative advantage that India enjoys in the same category.
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