USA And The Future Of The World -II

[dhu]

[url="http://www.samachar.com/Shyam-Saran-The-myth-of-Chinese-invincibility-lktfSneaibb.html?utm_source=business_standard&utm_medium=web&utm_campaign=most_read"]Shyam Saran: The myth of Chinese invincibility[/url]

The country's economic policies are unsustainable even in the medium term



The last paragraph:

India’s strength lies in its relatively balanced economy, much more domestic demand driven than China. It has a high savings rate given its favourable demographics and an investment rate of about 35 per cent of GDP, which is what one should expect at this stage of a country’s development. Our consumption rate is also close to the normal trend line of almost 60 per cent. If there is an imbalance, it is in the unusually high contribution of the service sector to our GDP growth, estimated at 58 per cent against China’s 40 per cent. India’s manufacturing sector needs to grow much faster and so must exports of manufactured goods. These adjustments are well within the realm of possibility and are, in fact, beginning to happen. In the longer run, the resilience of the Indian economy will prove to be a far greater asset than its ability to deliver Chinese-style double-digit growth. And I believe Indians would any day accept two per cent less GDP growth if this is the price they must pay for the privilege of living in a plural, free-wheeling and liberal society.