China’s Economy On The Brink Of Collapse

[beijingwalker]

India Loses More Ground on China
October 20, 2011, 9:00 AM IST

There were only a few people to begin with who really thought India’s economic growth rate would outpace China’s – at least anytime soon.

Now, those voices are likely to be fewer and weaker.


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As China’s economic growth hovers close to double digits, India is having to admit its 9% Gross Domestic Product expansion goal for the year ending March 31 is now pretty unrealistic.

“Let me not hide the fact that I have been disappointed by our growth performance over the last few months. It is evident that India’s growth rate in 2011-12 will be less than what we were expecting in February when I presented the Budget,” Finance Minister Pranab Mukherjee said in a speech during a media event on Wednesday.

In February, the finance minister said India’s economy was on track to expand 9% in the year through March 2012. On Wednesday, he hinted that 8% – or less –was more like it. That’s what “most observers” are expecting, Mr. Mukherjee said. He stopped short of making a formal growth forecast, saying he’ll share that with Parliament in December.

Those observers would appear to include the World Bank, which in a report released Wednesday echoed Mr. Mukherjee’s fears: it said that India’s economic growth is likely to slow from 8.5% last year to between 7% and 8% over the next two years. In other words, all those GDP headlines are likely to include a 7, or 7 point something, not the 8 or 9 or even 10 of the government’s dreams.

So what’s to blame? In his speech, Mr. Mukherjee said global financial woes – from high oil prices to the volatility of other commodity prices and capital flows – were largely responsible. Monetary policy tightening and interest rates, a response to the country’s uncomfortably high inflation, didn’t help either, he noted. These are points the World Bank also covered.

If –as the finance minister put it – “the dark clouds [that] have gathered in the global skies” are to blame, why isn’t China also suffering?

It appears that Beijing has done better than New Delhi at boosting domestic demand, an area that acquired greater relevance as Western countries are struggling with a prolonged economic slowdown.

“With the slow growth expected in core OECD countries, India’s GDP growth will have to rely on domestic growth drivers,” the report said. To do this, it said major structural reforms aimed at achieving fiscal consolidation (another big challenge for India) and at encouraging investment would be necessary. It said that “regulatory uncertainties” – ranging from environmental clearances to land acquisition laws to tax reforms – were holding back investors, an issue that is less of a problem in China. To strengthen domestic growth, it urged India to clear these up and to invest in infrastructure, among others.

China, by comparison, is now relying more heavily on its domestic demand and this is already helping its economy make up for a weaker export market.

Figures released earlier this week show that China’s gross domestic product expanded 9.1% in the quarter ended Sept. 30 from a year earlier, only slightly under analyst expectations of 9.2% growth.

The World Bank report also said that, compared to the current year, in the year through March 2011 India benefited from the strong performance of its agricultural sector, something that depends largely on a good monsoon.

Mr. Mukherjee invited his audience to look at the brighter side (rather than East.) “This is disappointing but at the same time we must not lose perspective of the global situation.”

However, China didn’t crop up in his comparison, which focused instead on debt-strapped Western countries – and their less than 2% growth.

 

[Götterdämmerung]

same title article can be traced back 30 years ago,boring....

Even my prof. at university said that 20 years ago. He also told us that democratic Russia and India will in no time surpass China - all because of democracy. That was 1993. LOL

 

[beijingwalker]

PM warns: India will sink if Opposition doesn’t relent

Manmohan appeals parties to cooperate, says country could meet Europe’s economic fate
22 November 2011
Iftikhar Gilani
New Delhi



Prime Minister Manmohan Singh on Tuesday warned that the country would sink like Europe if the Opposition continued to derail the winter session of Parliament thereby hampering the process of introducing crucial reforms. "As you all know that the global economy is facing serious difficulties, and if we don't manage our affairs well, we can also go down," he told reporters on arrival at the Parliament House for the session. The country was poised for sustained, equitable economic growth and it was time for all parties to cooperate, he said.

Singh urged the Opposition not to boycott or paralyse Parliament adding that it would be better if all the parties realised that some very important pieces of legislation that would be presented in this session were for "our country's sustained development and prosperity”.

On the BJP-led NDA deciding to boycott Home Minister P Chidambaram for continuing as a minister despite being embroiled in the 2G controversy, the PM said: "I sincerely hope that the political parties will resist any such temptation. There is virtually no case for a boycott of the type that has been reported by newspapers." What would happen to the Lokpal Bill and a score of other Bills being demanded by the Opposition if it does not allow a smooth functioning of Parliament, he added.

The PM’s warning, however, fell on deaf ears as the Opposition resorted to pandemonium that scuttled the Question Hour and then forced adjournment of the Lok Sabha for the day with another bout of noisy scenes even as ministers tabled important statements on price rise, and the Doon Express fire, which killed seven passengers. The Rajya Sabha was adjourned for the day in memory of its two members who died recently.

The Opposition was angry at the government's tactic of sabotaging its adjournment motion on price rise as Finance Minister Pranab Mukherjee gave a suo moto, 11-page statement that was tabled and invited a debate instead of censuring the government.

BJP’s former Finance Minister Yashwant Sinha later told a press conference here that people's anger over the government's “utter failure to check price rise could turn into violence any time and we do not have any hope from the government to prevent such a scenario”.

It was not only the Opposition, which caused the ruckus. Even Congress members from Telangana disrupted the proceedings with slogans and placards demanding creation of a new state. As in the past, nobody from the Treasury benches tried to pacify them.

Samajwadi Party members raised banners demanding 10 per cent reservation to Muslims in government jobs and higher educational institutes while Shiv Sena members stormed the well of the House with placards demanding remunerative prices for cotton farmers in Maharashtra. The BJP and Shiv Sena MPs from Maharashtra also demonstrated with slogans and placards at the main entrance of the Parliament House demanding higher support price for cotton farmers.

Trouble hit the session right from the start as BJP members were up in arms demanding debate on black money, which prodded party patriarch LK Advani go on a nationwide rally. The Left demonstrated against government “inaction” on rising prices.

After the House was adjourned by the Deputy Speaker for the day, the PM walked into the Central Hall and spent around 15 minutes interacting with the MPs even as Congress President Sonia Gandhi passed by quickly to go to her office in Parliament with Girija Vyas in tow.

 

[beijingwalker]

ndia’s best is not good enough to beat China, figures show

Manika Premsingh

Follow @firstpostin

If the first decade of the 21st century was supposed to be about India’s emergence as a rival to China on the world scene, the figures show that China not only stayed well ahead, but actually increased its lead over India.

Consider these stats: At the start of the decade, China’s gross domestic product (GDP) was 2.5 times India’s. Today, it is 3.8 times as large. Foreign exchange reserves were 4.4 times India’s in 2000; in 2010, they were nine times the size. Exports of goods and services were 2.4 times that of India in 2000. Ten years later, they are 3.4 times bigger (see table).

Influence on the World Economy

The most direct indicator of an economy’s growing significance in the world is its share in the global economy. China’s share (at current prices) was at over 9 percent in 2010, more than double that at the start of the decade. By contrast, India’s share has risen at a snail’s pace, growing by less than a percentage point to 2.4 percent in 2010.
Owing to an already bigger size in 2000 —two-and-a-half times that of India’s size — and a faster growth rate, China has consolidated its position faster than India. Even if we look at share in the global economy in purchasing power parity (PPP) terms, which, roughly speaking, is a measure of standard of living and thus a reflection of the size of the real economy, China’s position has improved further in relation to India.

A tightly controlled exchange rate regime and industrial capability has earned China the title of ‘workshop of the world'. Reuters
As a result, the Chinese are now also contributing increasingly to the world economy. Over the 2000 to 2010 period, China has accounted for 15 percent of global growth, over four times India’s contribution.

China’s openness to foreign trade is one of the cornerstones of its economic performance. A tightly controlled exchange rate regime and industrial capability has earned China the title of ‘workshop of the world’, as a result of which it is the top goods’ exporter with a global share of about 10 percent. It is also the fifth-largest exporter of services, according to World Trade Organisation (WTO) estimates for 2009, the latest available numbers, suggesting that it has more than cheap manufacturing products flooding the world market.

India, on the other hand, is still a more domestically-driven economy, with exports playing a relatively smaller role. No wonder then, India ranks a low 21 in world merchandise exports, though a large English-speaking population base and its advantage in technology have ensured a better commercial services’ exports ranking of 12. While both countries’ export growth took a beating during the global recession, China’s volume of exports has bounced back faster than that for India, probably in reflection of a higher competitiveness of exports.

Interestingly, though China has maintained a devalued currency to promote exports, it has also protected domestic industry by making imports expensive. Despite this, China holds the No 2 and No 4 ranks in import of goods and services respectively, indicative of growing Chinese demand for foreign goods. The world’s engine of growth has a voracious appetite for imports, too. While India too has grown in the respect, lower per capita incomes, greater fluctuation in currency movements and lesser emphasis on industrial production (a major source of Chinese import demand) could be reasons for India’s position at No 14 and No 12 as consumer of foreign goods and services respectively.

China’s “going global” strategy encourages Chinese companies to invest abroad. Since 1999, this policy has yielded fruit, and in 2010 China was the second-largest acquirer of foreign companies in the world. For the sake of comparison, however, we stick to 2009 figures, the latest numbers available with the United Nations Conference on Trade and Development (UNCTAD). Outbound FDI by Chinese companies for 2009 was at $48 billion, up from less than a billion dollars in 2000. India’s outbound FDI, too, has grown from a similar base, though far less at $14.5 billion, driven more by the growing ambitions of Indian conglomerates during the boom years of the mid-2000s than because of explicit government impetus.

It does need to be noted here though, that while the outbound FDI by both India and China is growing, both countries are net recipients of FDI. And here, India is fast catching up to China as investment opportunities get relatively saturated in a more heavily invested China. As a result, in 2000, China’s FDI inflows were over 11 times those of India but are now down to less than three times India’s.

Rising trade flows and foreign inflows (both FDI and FII flows) have led the central banks’ to sterilize their respective currencies to keep them from appreciating to a point where they hurt exports. Sterilization consists of increasing the supply of the domestic currency by buying the foreign currency in a bid to keep the exchange rate unchanged. Because of this, both countries have seen a rise in central banks’ foreign exchange reserves.

This is especially true for China whose exports exceed its imports, resulting in a current account surplus (whereas India has a current account deficit) as well as foreign investment inflows. China’s international reserves are estimated to be at $2.4 trillion as of 2009, over nine times those for India in comparison with 4.4 times in 2000. These foreign exchange reserves are then invested in foreign government instruments. It is estimated that 70 percent of Chinese reserves are held in US treasuries, which is larger than the size of the entire Indian economy.

Domestic economy and future prospects

More important, China seems better poised than India in handling internal economic issues as well, which are key to sustaining growth. Inflation has become a monster for India, averaging at over 13 percent in 2010 from 4 percent in 2000, while China keeps it contained at a more manageable 3.3 percent. A combination of lower inflation, faster decreasing population growth and faster paced economic growth ensures that China’s real per capita income is improving much faster than India’s (see table).

 

[beijingwalker]

China to land softly: World Bank

China to land softly: World Bank

Wed, Nov 23, 201
CUSHIONING:A bank report indicates that Asian economies are poised to withstand a slump in demand for exports or a pull-back in credit from banks in the eurozone
Bloomberg

The World Bank said China was heading for a soft landing of growth in excess of 8 percent next year.
Photo: Bloomberg

The World Bank said China is heading for a soft landing of growth in excess of 8 percent next year, and with most Asian nations has fiscal scope to cushion its economy from an escalation in Europe’s debt crisis.

Developing East Asia, which excludes Taiwan, Japan, Hong Kong, South Korea, Singapore and India, will see its expansion moderate to 7.8 percent next year from 8.2 percent this year, the Washington-based development lender said in a semiannual report yesterday.

While China faces the risk of a “strong” impact from a real-estate correction, its GDP will rise 8.4 percent next year and about that pace thereafter, the bank said.

The report signals that Asia, which led the world out of the 2008 to 2009 recession, is poised to withstand the blows from any slump in demand for its exports or pull-back in credit by European banks.

The World Bank said countries with high investment rates, such as China, should focus on boosting consumer spending in any fiscal stimulus, such as with social -security and pension provision.

“Clearly the region is being affected by Europe and the global environment has weakened,” Bert Hofman, the World Bank’s chief economist for the East Asia and Pacific region, said in an interview with Bloomberg Television.

At the same time, “imports into China are holding up quite nicely and it is becoming increasingly a market for consumption goods of manufacturing countries in the region,” he said.

The World Bank’s growth projection for developing East Asia this year was unchanged from a March estimate. For next year, the lender said in March that growth would be around 8 percent.

Asian policymakers have shifted their focus to shielding growth, rather than stemming inflation, as Europe’s debt woes and a struggling US economy increase the risk of another global recession. Australia and Indonesia have cut interest rates this month, while the Philippines last month unveiled a fiscal stimulus package to spur the economy.

In China, “the risk in the short term of any hard landing is very limited — we believe that a soft landing will take place,” Hofman said.

The World Bank predicted China’s GDP growth would ease next year from a 9.1 percent pace this year.

East Asian countries had a median value of foreign-exchange reserves equivalent to 50.4 percent of GDP as of the middle of this year, or enough to cover 8.9 months worth of imports, according to the bank.

Policy makers in the region are “likely to hold off further policy tightening and stand ready to act should further negative shocks to growth occur or in the extreme case of a disorderly resolution of the euro zone debt problem,” it said.

In China, monetary conditions “remain accommodative” and there’s space for further fiscal stimulus if necessary, the World Bank said.

China’s central bank said on Wednesday last week that it can’t relax vigilance over inflation, as “the foundation of price stability is not yet solid,” while reiterating Chinese Premier Wen Jiabao’s (溫家&#23542 pledge to “fine-tune” policies when needed.

“Policymakers will need to walk a fine line guarding against the short-term risks to growth and the lingering vulnerabilities associated with a still-buoyant, if not overheated, economy,” the World Bank said. “To mitigate the vulnerabilities of continued low real interest rates, an easing of fiscal policy appears the most appropriate line of defense before the monetary policy stance is eased.”

 

[deep.ocean]

Lo ji, PLA Assault has been started.. Beijingwalker has started rocket guided cruise articles to neutralize Indian poster....

 

[beijingwalker]

At the start of the decade, China’s gross domestic product (GDP) was 2.5 times India’s. Today, it is 3.8 times as large. Foreign exchange reserves were 4.4 times India’s in 2000; in 2010, they were nine times the size. Exports of goods and services were 2.4 times that of India in 2000. Ten years later, they are 3.4 times bigger (see table).

haha,seems like last 10 years was a remarkable economic development decade for India,so now they are in a position to claim how great they are ,haha

 

[deep.ocean]

haha,seems like last 10 years was a remarkable economic development decade for India,so now they are in a position to claim how great they are ,haha

Yes last 10 years was remarkable for us...and we are in right path of becoming great in next 10 years...

 

[beijingwalker]

At the start of the decade, China’s gross domestic product (GDP) was 2.5 times India’s. Today, it is 3.8 times as large. Foreign exchange reserves were 4.4 times India’s in 2000; in 2010, they were nine times the size. Exports of goods and services were 2.4 times that of India in 2000. Ten years later, they are 3.4 times bigger (see table).

this trend keeps going with no signs of change,so next 10 years China's economy can be many more times of India's.

 

[AADHAAR]

Lo ji, PLA Assault has been started.. Beijingwalker has started rocket guided cruise articles to neutralize Indian poster....

And all this has happened while China's economy is still on brink ...

Not even fallen off the brink...

 

[ChinaToday]

Good article for indian members here to have wet dream

 

[beijingwalker]

And all this has happened while China's economy is still on brink ...

Not even fallen off the brink...

haha,Indian economy will never be on brink,cause it is always at the bottom,pretty safe down there,isnt it?

 

[Sasquatch]

Epoch times is anti china so you can get your daily dose of Anti china venom from it.

 

[AADHAAR]

haha,Indian economy will never be on brink,cause it is always at the bottom,pretty safe down there,isnt it?

Good thought for ChinaToday to have a wet dream.



---------- Post added at 09:44 PM ---------- Previous post was at 09:43 PM ----------

Epoch times is anti china so you can get your daily dose of Anti china venom from it.

Ok. Agreed.

We also have a "Rupee Times' as an equivalent.

Chill.

 

[Fantasy]

Never quote Epoch Times, New Tang Dynasty or Gordon Chang for China analysis, they are a level above The Times of India and WSJ when it comes to bias opinions and misinformation.