Diabolo

The Chinese Have Joined In, Now What About India?

It would be tough for the Indian Government to announce such a stimulus or anywhere near that. The Indian economy is run different to the Chinese, put it down to democracy or anything else. However, I'm more convinced about the long term prospects of the Indian economy vs China. China has not faced any opposition to its policies, thanks to its communist regime, and hence has been more efficient in delivering on those. Wheras in India, any new ideas are debated, shared - entrepreneurialism is encouraged. China is developing robots while India is developing a knowledge-based economy that will be able to outperform in the long run.

China's economy is one which has been on steroids, and its performance cannot continue along the same lines. Once all countries realise the trade deficit vis-a-vis China, and root it down to their unfair currency manipulation, they may resort to protectionist measures. China will then be left with thousands of buildings that will turn into ruins.

The consumer sector, which is the driver of growth in developed countries is greater in India than China. I reckon China may find itself in the state Japan finds itself now, with over-reliance on exports, and the inability of consumers to drive growth. How much the government pumps in, it will not have any effect. China's lost decade is now starting and will be extremely painful.