Three days before the Belt and Road Forum in Beijing, the local media has circulated an unusual report from a Chinese think tank which said that India has the potential for explosive growth, and China should consider new ways to face the economic competition that India is capable of giving. This viewpoint is the opposite of Chinese government experts, who have been warning India that it would be isolated if it did not accept China’s invitation to join its Belt and Road program.
China may end up becoming “an unfortunate bystander watching India’s success” if it not take Indian economic progress seriously, Beijing-based think tank, Anbound, said in a report. It pointed out that international investors are getting increasingly interested in the Indian market.
There is a strong chance of India emerging as a close competitor of China in attracting foreign investments, the report said. “India may turn itself into China 2.0, and let global investors decide whether to invest in China or India,” it said.
India is still undecided on whether it would participate in China’s flagship Forum meeting on May 14 and 15. China is using both pressure tactics and persuasion to get India to join because it will give the Forum a lot of credibility.
“It should be pointed out that China has not conducted enough studies on India. From the perspective of think tanks, China cannot wait until India grows into an apparently promising competitor before discussing how to deal with the situation,” Anbound said.
“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”.
It also drew attention to the higher rate of growth of gross domestic product in India, which has been estimated at 7.1 percent in 2016-17 against 6.7 percent seen in China in 2016. But China’s GDP at $10 trillion is much larger than that of India.
“While Indian GDP may lag far behind, the country remains a potential emerging market that has high attractiveness for global capital,” Beijing-based tabloid, Global Times quoted the report as saying.
The report quoted an Ernst & Young (EY) study which ranked India as the most attractive investment destination in the world. Among 500 executives from multinational companies involved in the survey, 60 percent considered India one of the top three investment destinations in 2015.
Some of India’s attactions are its vast domestic market, low labor costs and skilled labor. India which has half the population below 25 also have a demographic advantage at a time when China is moving towards an aging society.
“Just as what happened with China in the past, the changes that are taking place in India may also point to the great potential for development,” it said adding, “Therefore, we must pay close attention to the development of this unfamiliar neighbor”.
By Saibal Dasgupta