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11 May 2017

India is becoming China 2.0, says Chinese think tank

Chinese think tank Anbound's study on Indian economy

Chinese think tank Anbound warned China to take Indian competition seriously as its economy may witness "explosive growth", boosting its prospects of becoming "China 2.0".

China should devise an effective counter growth strategy, otherwise, it may become a "bystander" to watch India's success.

Anbound said as "China's demographic dividend diminishes", India, with 50% population below 25 years age "is poised to take advantage".

In context

Chinese think tank Anbound's study on Indian economy
China should be wary of India, says report

Unfamiliar Neighbor

China should be wary of India, says report

The report highlighted China's economic slowdown which stood at 6.7% last year in contrast to India's estimated GDP of 7.1% for 2016-17.

The changes taking place in India may indicate a great potential for development, just like what happened with China in the past.

The report stated, "We (China) must pay close attention to the development of this unfamiliar neighbor."

An excerpt from Anbound's report

"(By) imitating (China), India may turn itself into China 2.0, and let global investors decide whether to invest in China or India. While Indian GDP may lag far behind, it remains a potential emerging market that has high attractiveness for global capital".

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Investment Destination

India among top three attractive investment destinations

Ernst and Young ranked India as the world's "most attractive destination" in a survey involving 500 executives from multinational firms.

About 60% executives considered India one of the top three investment destinations in 2015.

A vast domestic market, low labor costs, and skilled-labor market attract investors to India.

Also, India's larger youth population apart from being a labor force is a potential consumer group.

Chinese companies investing in India

Referring to Chinese companies, including Huawei, Oppo, Xiaomi among others, making investments in India, the report stated, "In our opinion, if India intentionally creates a competitive situation in front of global investors, it will pose a challenge for China."

Solar Energy

India has the conditions to copy China's growth model: Anbound

India is confident about attracting global investment with PM Narendra Modi hoping to boost the use of clean energy over fossil fuels.

With World Bank loans, India is building massive solar parks targeting $100-billion investment in solar energy in five years.

Anbound said: "No other country could compete with India supporting investors in solar economy. China has not conducted enough studies on India."

India's Growth

China needs a more effective growth strategy

The report cautioned China cannot wait until its neighbor grows into a promising competitor for discussing how to tackle the situation.

China needs a more effective growth strategy or it may become an unfortunate bystander while India takes over.

It needs to ponder and carefully study the rise of India's economy as it is entirely capable of gaining the "attention of world capital".

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