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The coming battle between India and China

There is new competition for customers and profits forming up between India and China, as both India and China have huge human resources, capital, innovative technology and then manufacturing ability and capacity that are the Key components in international trade.

Right now the falling USD is giving China a advantage over India because China’s Yuan is gauged against the US Dollar making it cheaper to do business in China as the "Greenback" continues to slide.

Also, keen observers are advising that Chinese companies are ramping up efforts to garner more business from Indian companies, as the Mumbai terrorist attack, and other turmoil raised important questions about the safety and stability doing business in India and of the Indian stock market.

With Trillions of US Dollars at stake, companies in both countries are pulling out the stops to stake their share of the global profits as the USD continues to slide and the competition heats up in earnest. 

The mainstream financial media are ignoring what is going on in this arena. And that is  because they usually focus on the countries separately and do see the economic war that is on the verge between them.

But you can see, if you dig deeper, the battle that is coming by looking on the back pages of the financial sections in your chosen papers: the W-SJ, Investors Daily, Barron's and the London Financial Times.

When you look closely in those back pages you will note that China is countering India's aggressive moves by spending about US$35B in M&A activity in order to buy a bigger piece of the action.

China is now the world's #1 exporter and #3 consumer and that will put huge upward pressure on the stock prices of companies that give US and European companies what they want faster, better and cheaper than the competition, and those that fail to compete will see their revenues, their earnings and their stock prices decline.

More to come during this year, stay tuned...Paul A. Ebeling, Jnr.

Disclosure: Long India, Long China