Who will be the next global economic growth leader?
“I remember myself being the topper of the class for years in my school days? All thanks to my superb tuition teacher. But one day the teacher got married and left the city. And the guy who used to come number two or three stood first in the class that year. Actually, the guy used to study on his own and was not depending on any tuition unlike me.”
I see the same thing happening to China(me) in coming years. China has enjoyed the status of ‘the fastest growing economy in the world’ for quite some time now. But there is a big question mark on whether it will continue to rule the number one position any longer. Why is that so?
Actually, the global demand has dried up completely on account of global recession. China's exports (tuition teacher) have fallen around 22% in the first five months of 2009, as compared to the same period a year ago. May was the seventh straight month when exports tanked. Given the current economic situation, exports are unlikely to recover any time soon.
But that creates a problem for China. Exports contribute more that 35% to China’s GDP as compared to 14% in case of India. Therefore, this kind of heavy dependence on exports will be the reason for China’s sluggish growth in coming time.
Rest I leave to you to guess who will be the next topper in the world. Yes…You guessed it right.
what an interesting and an insightful read. I have always believed that India will eventually do a lot better than others. The facts that you have stated just confirm my faith in our economy.
Would love to read more about how other economies have fared in this crisis and what's their current status.
I really like your posts, as they keep me updated with what's happening in the world without taking much time. They are short, crisp and to the point. Keep up the good work.
Charu: I appreciate your comments and I will try to keep all my readers updated on the economy front.
Vikas: You are right that once everything gets normal, China will again become the leader unless India has really vibrant plans for future. However, downturn is going to be here for at least two years and during this time only I expect India to surpass China. And the main driver will be the domestic demand. We are less vulnerable to external demand as compared to China.
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Hey Gautam,
ReplyDeletewhat an interesting and an insightful read. I have always believed that India will eventually do a lot better than others. The facts that you have stated just confirm my faith in our economy.
Would love to read more about how other economies have fared in this crisis and what's their current status.
I really like your posts, as they keep me updated with what's happening in the world without taking much time. They are short, crisp and to the point. Keep up the good work.
Warm Regards,
Charu Gupta
but when everything will be alright, and the world trade train will be on the track again (because nothing is long lasting)...
ReplyDeletechina will again on the pace of growth...
how will india beat china?? what are our strength, so we can be a topper?
and if we have strength, so what and how it will lead india to reach the top position? and in how much time??
if you are able to explore it in detail, it will be very insightful.
Regards,
vikas
Charu: I appreciate your comments and I will try to keep all my readers updated on the economy front.
ReplyDeleteVikas: You are right that once everything gets normal, China will again become the leader unless India has really vibrant plans for future. However, downturn is going to be here for at least two years and during this time only I expect India to surpass China. And the main driver will be the domestic demand. We are less vulnerable to external demand as compared to China.