“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.
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