A Beijing based think-tank has become nervous sighting the enormous growth of the Indian economy, that may pose a major challenge to China, which may witness India succeed if it did not develop a more effective growth strategy.
‘Anbound’ warned that India could surpass China’s low labor cost, young population and other factors.
The think-tank pointed out that there were few studies conducted on India and Beijing cannot wait until India grows into an apparently promising challenger before discussing how to deal with the situation.
“While India’s GDP may lag far behind China, the country remains a potential emerging market that has a high attractiveness for global capital,” said the report, carried by the state-run Global Times on Thursday.
China’s economy slowed down with 6.7% growth in contrast to India’s estimated 7.1% for 2016-17. Experts at the Global Times today said,
“Just as what happened with China in the past, the changes taking place in India may also point to a great potential for development. “In our opinion, if India intentionally creates a competitive situation in front of global investors, it will pose a challenge for China. “Moreover, there are growing signs that India is succeeding in attracting more and more investment, which China should take seriously. “As such, China should develop a more effective growth strategy for the new era or it may become an unfortunate bystander watching India’s success.
Referring to Chinese-based firms like Huawei, Xiaomi, Oppo that are hugely investing in India, the report said, "in our opinion, if India intentionally creates a competitive situation in front of global investors, it will pose a challenge for China".
Huawei invested $170 million to open an R&D facility in Bengaluru and also announced its plans to Prime Minister Narendra Modi’s “Make in India” campaign. . “In other words, India may turn itself into China 2.0, and let global investors decide whether to invest in China or India.
“The country’s vast domestic market, low labor costs and the skilled labor market are its most attractive features. As China’s demographic dividend diminishes, India, with half of its population below the age of 25, is poised to take advantage.”