Want China Times
January 18, 2015
China’s President Xi Jinping, left, and India Prime Minister Narendra Modi. (Photo/Xinhua)
India’s economic growth may surpass that of China in the near future since the latter has been affected by its shrinking labor force and increasing costs in the manufacturing sector, reports our Chinese-language sister paper Want Daily, citing a Financial Times report.
The World Bank has predicted that India’s economic growth will reach 7% by 2017 while China’s growth will be around 6.9%. China saw GDP growth below 7.5% last year. The report said Beijing may decide to stabilize the goal between 6% and 7% as the country’s labor force decreases and its manufacturing sector loses momentum. Beijing has realized that the country cannot continue to rely on credit and energy input. Several cities have stopped using GDP as the key way to measure performance and have shifted their focus to environmental protection and reducing poverty.
The Indian economy meanwhile looks set to grow rapidly as its current account and fiscal deficits have decreased and falling oil prices reduce the country’s inflation, according to a Goldman Sachs report. India may finally be able to fulfill a popular prediction that describes the country as a tortoise poised to overtake the Chinese hare.
The Financial Times said obstacles to India’s growth still remain since Prime Minister Narendra Modi’s economic reform program, which aims to boost manufacturing and capital investment, may not be sufficiently implemented nationwide. Furthermore, a policy allowing more foreign companies to enter the country’s insurance market may not boost economy as much as lobbyists have claimed.
The country’s growth may also be impeded by disputes between environmental activists and industrialists who have been feuding over environmental and land rights. Leaked documents from the Indian intelligence bureau accused foreign-backed civil organizations of using environmental protection as a way to undermine the country’s economic growth.
South Korean steel maker Posco has been fighting with residents of in Orissa in eastern India for a decade over the firm’s US$12 billion steel mill project. The residents and the company failed to reach agreements on compensation and environmental concerns, according to the India Express. The state also refused to grant mining permission to an Indian company since local residents considered the hill that the firm planned to mine bauxite as sacred.
