MUMBAI: India is expected to grow faster than China over the next couple of years and will be a $30-trillion economy by 2030, according to a report by Standard Chartered Bank . India is going to be the third-largest economy in the world after the US and China.
The super-cycle report prepared by Standard Chartered’s global research team, which is based on several assumptions, says while China is likely to grow at a 6.9% rate over the next two decades, India is likely to grow at a pace of an average 9.3% over the same period and trail the US as the third-largest economy by 2030. China may also overtake the US to become the world’s economic superpower within a decade.
It sees the world economy reaching $308 trillion by 2030. Within this, China will be a $73-trillion economy and India will be a $30-trillion economy, based on its growth and inflation forecast. At present, India is slightly over a trillion-dollar economy. It has assumed that the Chinese yuan will have appreciated from 6.64 this year to 4.39, and the rupee from 45.5 this year to 35 in 2030.
The report has forecast that living standards, as measured by real per capita income, will have increased nine-fold in China and India between 2000 and 2030. Rising personal incomes will push billions of people into the middle class and drive consumption, which will spur domestic economic growth.
Stanchart defines a super-cycle as “a period of historically high global growth, lasting a generation or more, driven by increasing trade, high rates of investment, urbanisation and technological innovation and characterised by the emergence of large, new economies, first seen in high catchup growth rates across the emerging world.”
There have been two such super-cycles before. The first ran from 1870 until 1913, on the eve of the First World War. The second began with the end of the Second World War and lasted until the oil crisis in 1973. The current super-cycle, according to the report, started at the turn of the 21st century and is likely to extend at least until 2030.
India’s growth to outpace China’s in the next two decades
India’s economic growth will outpace China’s in the next two decades, making it the world’s third-biggest economy, according to a Standard Chartered PLC research report.
The Indian economy will grow at an average of 9.3 percent a year, over the next two decades, compared to China’s 6.9 per cent annual growth, the report released on Monday said.
Prime Minister Manmohan Singh is building roads, ports and other infrastructure projects to lift economic growth and raise living standards in a country where about 800 million people earn less than $2 a day, according to the World Bank. The measures, the report says, may also help India overtake China, the world’s fastest-growing economy.
“Asia will drive most of the global growth over the next 20 years, during which global output is conservatively set to, more than double in real terms, having already risen more than 50 per cent in the last decade,” the London-based bank said.
According to the report, India’s economy will overtake Germany’s which is Europe’s largest and Japan’s in terms of size by 2030 but will still trail China and the US. China will become the world’s-biggest economy within a decade surpassing the US, the report said.
Living standards, as measured by real per capita income, will rise nine-fold in China and India by 2030 compared to the 2000 level, the Standard Chartered report added.
The next two decades will witness increased trade, especially among emerging markets, rapid industrialisation, urbanisation and booming middle classes in the developing world, it said. The number of people living in the cities will grow to 5 billion in 2030, up from 3.4 billion today.
As per the International Monetary Fund's projections, the Indian economy is expected to clock an annual growth of 9.7 per cent for the current year, while China will expand at a rate of 10.5 per cent
I guess he is projecting hyperinflation in India down the road. For his projection to become true, India needs to grow at 16-17% nominally each year, don't think that's possible without a lot of inflation.
I find many people from China come here and gives lectures about inflation. They tend to forget realities in their homeland . Before you guys start you illogical trolling have a look at this . one person claim that he/she work in bank. Even a 10 grade kid can present better statistics than him/her. They also forget mess their Real estate is in and banking sector is in red due to bad assets.
Hong Kong, China (CNN) -- Surging inflation in China has the government worried enough that it's adopting new measures, state media said Wednesday.
Government actions might include food subsidies, price limits, reinforced punishment for speculating on food, and steps to prevent hoarding, China Daily said. Mayors also might be forced to account for insufficient vegetable supplies and volatile prices.
Inflation in China is rising so quickly that it's sending shoppers across the border, to Hong Kong. Mainland Chinese are returning with necessities such as meat and produce, as much as they can carry on a train ride.
While in Hong Kong, which is a day trip from parts of mainland China, shoppers also can save by grabbing a meal at McDonald's. The fast-food chain is raising menu prices in China by as much as 1 yuan [15 cents US] per item because of rising food costs. McDonald's is keeping prices in check in Hong Kong.
Topsy-turvy Chinese markets
The chain, with more than 1,000 outlets in China, is raising prices there for the first time this year, Xinhua said.
In 36 Chinese cities, the average wholesale prices for 18 kinds of vegetables have surged by 62.4 percent from a year earlier, the Ministry of Commerce said.
Chinese doing marketing in Hong Kong also are loading up on necessities such as toilet paper, diapers and shampoo. With their hands full, they shop busily at supermarkets, sundry stores and produce markets, especially near train stations.
One woman described significant savings, such as oranges selling for about twice the price in China, as compared with Hong Kong.
Last week, the state-run Xinhua news agency said that China's consumer price index had hit a 25-month high of 4.4 percent in October. The government's full-year inflation target is 3 percent.
China's Ministry of Commerce has sold 62,400 tons of pork and 210,000 tons of sugar from reserves since the end of September, in an attempt to stabilize food prices.
The ministry also says it will work with other government agencies to try to cool inflation, according to China Daily.
China is under pressure as capital flows into the economically vibrant country, the newspaper said, citing Central Bank Governor Zhou Xiaochuan.
The country drew about $7.7 billion in foreign direct investment in October, up 7.9 percent from a year earlier, China Daily said.
Hong Kong is a special administrative region of China, which generally governs itself. The Hong Kong dollar is pegged to the U.S. dollar, unlike China's yuan, or renminbi.
There is inflation in China, particularly on food items, there is also inflation in India, again most severe on food items, more so than in China. In fact there's been inflation on food items world wide, even in the richest countries.
That's the point, India is unlikely to become a 30 Trillion economy by 2030 without a lot of inflation, nor will China become a 73 trillion economy either by that time. In fact with the world wide rapid climate changes, and growth in population far outpacing growth in resources, my view about the future is rather pessimistic. I think we better not have expectations too high.
Thats a logical assessment of real situation. so inflation situation is same in both countries . It was missing in your earlier post and it should have been pointed out. we both are in same boat so stop pointing that hey buddy there is a leak in your boat.
China's premier says Beijing is preparing measures to rein in double-digit rises in food prices, stepping up efforts to reassure the public about surging living costs that communist leaders worry might spark unrest.
Premier Wen Jiabao, the country's top economic official, said the Cabinet is 'drafting measures to suppress sharp rises of commodity prices, which concerns people's immediate interests,' the official Xinhua News Agency said late Tuesday.
It gave no details but the official newspaper China Securities News cited unidentified officials as saying authorities were considering price caps, subsidies and stricter punishments for hoarding or speculation in corn, cotton and other products.
Food prices jumped 10.1 percent in October, pushing overall inflation to a 25-month high of 4.4 percent, well above the government's three percent target. That prompted worries Beijing might raise interest rates or tighten economic controls and further slow China's growth from high levels, but analysts say inflation is limited so far to food.
Inflation is politically volatile in China, where poor families spend up to half their incomes on food. Rising incomes have helped to offset price hikes.
"Inflation one of the biggest political issues today"
"Inflation is one of the biggest political issues today," said Robert Broadfoot, managing director of the Political and Economic Risk Consultancy in Hong Kong. "I think you're going to see isolated demonstrations over living costs."
Chinese stock markets have dived this week as jittery investors wait to see whether Beijing imposes price controls or hikes interest rates again following an October 19 rate increase, its first since the financial crisis.
"Inflation is the biggest concern not just for financial markets but for people's daily life," said Liu Kan, a market analyst for Guoyuan Securities in Shanghai. "Any tiny change in policy will shake investor confidence."
The jump in food costs came as Beijing is trying to steer China's rapid growth to a more manageable level and restore normal conditions following its stimulus-fuelled rebound from the global crisis. Beijing ordered banks last week to increase reserves to curb loan growth.
China is JUST finishing the first phase of the east asian economic transformation. Follow Taiwan, SK, and Japan. First low end manufacturing, then when it is no longer viable as quality of life increase, transition towards heavy industry and high tech. Already, there are signs. For example: the tonnage of commercial ships China manufactures...AND how China is exporting technological know-how to India to help them produce power plants.
"On Thursday, Shanghai Electric Group Co. signed a $10 billion deal to sell power-producing equipment to Indian conglomerate Reliance ADA Group.The contract for coal plant turbines dwarfs the $750 million contract Reliance inked with GE last week for gas turbine power equipment. GE doesn't have a large presence in coal-based turbines, but it has roughly 40% of the global market share for gas turbine power equipment. It is likely to face competition in gas turbines from Chinese power equipment firms in the future."
He is projecting GPD as a rate-growth. China cannot sustain 9-10% GDP growth for years, and at the same time, hope to improve living standards, consumerism and post-export oriented growth technologies.
India will indeed grow at a faster rate than China for the coming years, basic economics suggests that. The value of the currency will decline, as it increasingly becomes an export-led economy, and China will move to higher-end technologies, to which India will eventually catch up.
hahhaha. And why isn't GE in charge of building the plants for Reliance? The US did not interfere.
Look at this:
Source: PRC General Administration of Customs, China's Customs Statistics
HS# Commodity description Volume % change over 2008
85 Electrical machinery and equipment 301.1 -12.0
84 Power generation equipment 236.0 -12.2
61, 62 Apparel *100.5 *-11.1
72, 73 Iron and steel *47.3 *-53.6
94 Furniture 38.9 -9.1
90 Optics and medical equipment 38.9 -10.2
28, 29 Inorganic and organic chemicals *32.0 *-24.5
89 Ships and boats 28.4 44.9
64 Footwear 28.0 -5.7
87 Vehicles, excluding railway
Look at the top two exports to the US.
The China-US trade is no longer as eye-popping as it once was. Japan, South Korea, Taiwan, Germany...all are catching up to the US in terms of value traded with China. The US no longer has as strong of a say with China anymore