Page 58 - 15FEB2019E

COLUMN

Slowdown in China may

spur India’s economy

NEWS & China and India had withstood the 2008 global financial crises.
However, now China seems to be in serious crisis. India’s economy, on
VIEWS the other hand, is considerably less vulnerable to a downturn

BHARAT HITESHI
n opportunity awaits second-biggest by Japan’s, having been
Hiteshi is an India as Chinese economy swiped this year by the threat of a trade
independent journalist- goes downhill. Can India war with the United States and slowing
turned-author and a capture that moment and economic growth. The figures show that
political commentator. emerge world leader with Chinese stocks were worth $6.09 trillion,
The views expressed A growth rates higher than compared with $6.17 trillion in Japan. The
are his own China? The World Bank has predicted US market is worth $31 trillion.
a global bleak economic outlook unless While global markets have been
other engines carry on the growth pro- broadly hit by fears of a trade war
cess and the latest growth figures show between the world’s top two economies,
that the Chinese economy may be head- Chinese equities are among the worst
ing downhill more rapidly than planned. performers this year, with the bench-
In the year gone by that is in 2018, mark Shanghai Composite Index
China recorded the lowest growth slumping more than 16 percent since
rate since the economic boom. Post- the start of January. The White House
Tiananmen Square protests, the Chinese has made it clear that it was considering
growth rate is lowest. China and India more than doubling threatened tariffs
had withstood the 2008 global financial on a range of Chinese imports worth
crises. However, now China in serious $200 billion. Washington has already
crisis it seems. Though China is planning imposed tariffs on $34 billion worth of
another stimulus, including tax cuts and goods and is considering hitting another
more public spending, but it appears that $16 billion in the coming weeks.
these measures would not be enough to The data indicates economic growth
stop the slide. is slowing, while Beijing has embarked
We may call it Modism Economy, or on a drive to cut a worryingly large
result of consistent economic polices debt mountain as well as reduce pol-
inherited from the UPA, India is uniquely lution. Also worrying investors are the
placed in this respect with its growth Yuan’s recent losses, with the currency
rate having outstripped that of China for at its lowest level against the dollar for
two successive years. In absolute terms, more than a year, while traders have
China is adding vastly bigger numbers been mostly unmoved by government
than India, which is a quarter of its size, measures and promises to support the
but the portends are not positive for economy. At the same time, Japanese
China. corporate results have been broadly up-
India is poised to grow because the beat, providing some support to markets
Indian economy is considerably less there, though the Nikkei is still slightly
vulnerable to a downturn. Another rea- down this year.
son for downtrend in China is its trade Chinese stocks have been on a roll-
war with the US. In the emerging scenar- ercoaster since taking the second spot
io, India can be an attractive destination in 2014. Fuelled by risky investing by
for multi national companies deciding to individual investors looking for a quick
relocate in India. China’s stock mar- profit, the market surged through early
ket has been overtaken as the world’s 2015 to hit a high of $10 trillion, but then

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