By NewsGram staff writer
Beijing: The Indian economy is full of potential, but how to ensure real growth will test “the wisdom of leaders,” said Zhao Gancheng, Director of Center for Asia-Pacific Studies, Shanghai Institutes for International Studies, in a state-run daily.
An opinion piece ‘Can India benefit from Chinese economic slowdown? Think twice in the Global Times on September 7 remarked that the Indian Prime Minister Narendra Modi had set his focus on the economy since he took office.
“New Delhi also holds the ambition of replacing China as the new global factory. The slowdown in the Chinese growth rate seems to offer India a good chance to reach the goal,” said the Chinese expert Gancheng.
Zhao claimed that it raises the question of the nature, relevance and interactions of the Chinese and Indian economy.
“Many analysts correctly point out that the two economies started nearly at the same level in 1980s until the early 1990s, when the per capita GDP was almost the same. But in the next two decades, the fast growth of Chinese economy has widened the gap,” reported the opinion piece.
Pointing out the factors that have affected the Indian economy, the article said, “the most important reasons lie in their policy options and domestic development rather than external environment or international factors. Frankly, China confronted a much harsher external situation during the period than India did.”
“The Indian economy is full of potential, and how to build it becomes a real wisdom test for leaders,” it noted. Praising the policies of Gujarat government when the PM was the state chief, the article noted that the state’s rise as a successful economic model was a clear indication of how efficient Modi has been at economic policies. It added that this brought him to the Prime Minister’s office as he showed promise of development and economic reforms.
“China, which developed consistently fast for decades, has reached a new economy level with an annual GDP as high as $10 trillion ($7,594 per capita), compared to India’s more than $2 trillion ($1,631 per capita). Given that accumulation and development, the Chinese economy has entered the ‘new normal’ in which high growth rate turns to a medium rate and the economic restructuring is well underway,” sources claimed.
Zhao said if Indian economy has to make it big, it will have to address some crucial elements in coming years and “the most important ones include the leadership’s policy options and internal interactions, which have so far not presented a very optimistic picture.”
“Although Modi has been devoted to creating an FDI-friendly environment in order to attract more investment, the results have not been as good as expected. Local interests are difficult for the federal government to coordinate and address when implementing relevant policies,” Zhao added.
The opinion piece took note of the view that although the two Asian giants didn’t compete directly, the effect that China imposes on the global economy is likely to influence the Indian economy. In this regard, whether a slowing Chinese economy will really create more opportunities for the Indian economy requires rethinking.
“…if the global economy slows down further as a part of the outcome of the Chinese economic restructuring, it would be difficult to see why a sluggish world economy would help the Indian economy anyway,” sources quipped.
(With inputs from IANS)