Many of the recent studies concluded with shortlisting India or China as the contenders for future superpower;fuelling the debate ,which country actually would lift the crown.Here's our take on this..
Since India had opened its economy back in 1991 to foreign investment, it has maintained
an average of 6.5% growth rate and still is continuing to reap its benefits. In 2007-2008 India's G.D.P.[Gross
Domastic Product] was 9.2%,its highest.
Today China is the only country standing strong in this financial doomsay;being awash still in reportedly 2 trillion foreign exchange,the result of its years of double digit growth.
India's Economic development is from grassroots to up contrary to china where its, government down. Being a communist nation all powers are vested in the Government, output majorly depends on Government spending,resulting loss of innovativeness. Indians are free to think ,implement;this actually changes the rules of the game .
Accepted the fact china has more investment ,but
it is notable that investors worldwide look upon china as the short term investment,while India is a long-runner.Investors are wary of china for long term investment for weak Individual property rights and
piracy laws,adding more ;china controls its currency rate to facilitate its exports.
India's economy comprises 80% of that of whole southeast Asia and is 4th largest economy in the world. Better foreign relations too work in India favour for becoming an world power. Even India stands to gain for it is the largest democracy in the world and China lacks this status. Being a democracy is an important eligiblity to be acceptable in the world.
It is an open secret that China controls its foreign exchange by manipulating its currency value. Keeping the value of its currency low facilitaes the exports ofthe country.Countries cannot count on such artificial growth.
China's huge economic imbalance hardly would let it be a superpower for atleast a few decades.
Last but not the least China is highly exposed to U.S. financial securities and bonds , fall of U.S.A. would naturally result in the fall of China ,
just take the example of the present situation, due
to recession in U.S. there had been a setback for exports in China , leading to some 2 lakh job cuts. Why does China highly invests in U.S. ? would be the question in your mind.
American consumers spend money on buying Chinese goods ,thus China earned a lot of money ,but to keep the demand steady China went on investing more money in U.S., again the Chinese earned andthe cycle went on .Its same like you scratch my back and I will scratch yours;this all went on until this subprime crisis and the Recession.
China is a country of savers and cannot be turned into a country of spenders overnight, it cannot consume all the goods produced for exports which are delayed due to less demand in western countries.
For India , the story is different, we see our huge population as a consumer base,our very own market.Indian companies don't bitterly need overseas adventures.
We see to India as the future superpower,after assesing all its positive and negative points.As per our estimates anywhere around 2025 to 2055 it would be a reality.not Considering any third possilblity that ,till then the interdependence between the world countries increasing to the extent and no economy dominating the world structure.
What do you think? . Comment...............
source licensed:-Accelerate India ;India's True Economics
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