Published By : 22 Sep 2015 | Published By : QYRESEARCH
Throughout the month of August media overwhelmingly reported about the economic woes of China. The Chinese stock market witnessed meltdown and the country had a low growth figure of 7 per cent, which is way lesser than the historical growth rates of over 10 per cent. Impelled by the prevalent situation, the Chinese government had to devalue its currency in order to kick-start its exports.
The news of economic meltdown in China however, carried good news for India. China meltdown is likely to open manufacturing opportunities for India on diverse domains. In fact, Prime Minister of India, Mr. Narendra Modi also summoned bankers and billionaires of India to brainstorm ideas on how India can capitalize on the growth opportunities amidst the economic and growth woes of China.
During a very publicized interview with BBC, the Indian finance minister said that the meltdown in China will hinder the country from achieving its normal growth rate of 9, 10, or 11 per cent.
The Minister of Finance for India Arun Jaitley also said that the world at present is in dire need for other engines to propel the growth process, given the economic meltdown a nation that registers growth at 8 to 9 per cent such as India has steady shoulders to provide the support needed by the global economy in the manufacturing front.
However, economic analysts believe that China’s GDP being five times of that of India, and foreign exchange reserves in the country being 10 times better than the India, it is very ambitious for the later to seek such opportunities.
While the economic slowdown will continue for a short span in China, Stephen Roach, Professor at Yale University, and former chairman of the investment bank Morgan Stanley in Asia says that the real growth is about half of the official figure claimed by China. He also believes that the country has grossly overblown its crash landing situation.
Hence the impact of Chinese meltdown will be have a short-term negative impact, nevertheless there are possibilities for the manufacturing sector in India to benefit from China’s lost.