Tuesday, September 14, 2010

Chinese economist praise Indian economic growth model

World Economic Forum is hosting a meeting in Beijing this week. In this news item by PTI, filed from Beijing, report a side event, where Peking University economist Fu Jun said that  India has comparative strategic advantage in the value chain whereas China relied mostly on the labour and cost advantages. This is from the Times of India on 14 Sept. 2010, under the title "Indian model of growth wins praise over its Chinese rival".
BEIJING: Indian economic growth, often described as chaotic and weighed down by poor infrastructure, came in for praise from experts here, compared to more disciplined but highly autocratic Chinese model.

While Indian economic growth was more fuelled by high domestic consumption and services, the Chinese model relied heavily on manufacturing and exports, said Western and Chinese experts at the state TV debate, on the sidelines of of the World Economic Forum being held here.

Besides, India has comparative strategic advantage in the value chain whereas China relied mostly on the labour and cost advantages, said Fu Jun, professor of the Political Economy of the Peking University.

"India in comparison has done a better job", Jun said.

"What is interesting from now on is which one is more viable. I have to give credit to India. What India will do next is to continue the strategy and move into other areas. By comparison we (China) have to readjust our strategy into manufacturing. I do not see reasonable balance between supply and demand," he added.

Human resources development minister Kapil Sibal, who was participating in the debate, said, "Because our economy is based on domestic demand, there is much greater innovation and ability of the entrepreneurs to actually produce wealth. In the long run a lot of innovation and lot of wealth production is going to come from our part of the world."

Martin Wolf, associate editor of the Financial Times, who was critical of the Indian growth model said, however, "Indian development is working despite failure of organisation and poor infrastructure. It is clear that lot of successful multinational companies have good assets in India."

The debate, the first of the three was held on the side lines of the Geneva based World Economic Forum which was being held at Chinese port city of Tianjin, where over 1,400 political, business leaders and economists gathered to deliberate on "Driving Growth through Sustainability".

Besides Sibal, Karnataka chief minister, BS Yeddyurappa and a host of Indian business leaders are taking part in the meeting, which is inaugurated today by Chinese Prime Minister, Wen Jiabao.

1 comment:

  1. India and China have been in news for their economic race for the past many years now. Both the Asian countries are seen as global financial powers, specially after how the two countries are performing given the global economic crisis. Although China is receiving tough competition from India, I still feel it might take some more years to surpass China in terms of financial power.
    Chinese economic growth