Threat 1 Software/BPOChina can compete with IndiaAttempts by China to increase its English-speaking population Lower salaries in China, even as India’s rising by 15-25% every yearHigher productivity among Chinese workers, willing to work longer hours40% of Indian software exports will be from bases in ChinaThreat 2 ManufacturingChina’s dominant global share in many areasChina has scale; India has to opt for niche, but value-added productsCheap inputs like manpower, energy in China give it a cost edgeChina operates at several price points, from the lowest to the highestThreat 3 Bilateral TradeChina has a surplus balanceIndia’s exports basket is small; 5 commodities comprise 81.5%China’s exports basket consists of technology-based itemsThese include more value-added electrical/electronic products FTA between the two will favour China more than India Threat 4 EnergyChina’s more intent on gobbling overseas fieldsChina’s state firms much bigger than ONGC Videsh in terms of financial resources China has a first-mover advantage globally; it also uses its diplomatic clout in many dealsChina’s more aggressive in the bidding process; it links its cash deal with defence supplies