China’s economic pain cannot be India’s gain as both economies are not at the same level of development, according to an article in a state-run Chinese daily which said a view that India can take advantage of China’s turmoil may cause “unnecessary jitters” between them.
“China’s economic fluctuation is worrying the international community. But India has a different opinion. It seems to have sensed an opportunity to acquire a competitive advantage over China,” the article in Global Times said.
“Optimists argue that the Chinese slump in the stock market may steer foreign investments out of China into India, and India can benefit from China’s rising labour costs, due to which international companies will be inclined to shift their production lines from China to India,” said the article titled ‘China’s economic pain can’t be India’s gain’.
Such panglossianism (excessive optimism) studded with schadenfreude (pleasure derived out of others troubles) has raised a public debate, after the media hoopla, in the Indian society and academia, the newspaper known for its nationalistic views said.
China’s economic restructuring and industrial upgrade have dimmed the dazzling economic data of the past, with foreign funds withdrawing and manufacturing industries shrinking.
This change, as for China, is bitter but necessary. China should move toward the upper reaches of the global chain, so its excess capacity could be transferred to other countries which still depend on making massive low value-added products, the article said.
“During the process, a volatile stock market, the withdrawal of foreign funds, and the relocation of factories are all contractions before the economy notches up an upgrade,” it said.
“The process will be a win-win instead of a ‘lose-win’ for China and India. Since both economies are not at the same level of development, they can achieve a mutually beneficial industrial conjunction. China’s excess capacity, along with the withdrawn international funds from the Chinese market, is what India desires,” it added.
“It is true that economic rivalry between India and China is increasing….It is possible that China and India’s economic competition, as the Indian economy develops to a certain point, will be expanded worldwide,” the article said.
“But, so far, the Chinese economy shouldn’t be at the priority of India’s concerns, because the economy is still vulnerable due to many problems such as a weak work ethic, poor quality control and the terrible enforcement of business contracts,” the article said.
“India is a large economy, but for now, its major competitors do not include China, but economies like Vietnam and the Philippines, which are eager for investments and infrastructure development, many of which are from China.
“India should understand that without a proper environment to attract these crucial elements, its ambition to be a world economic engine is merely a dream,” it added.
“Even the last quarter’s economic growth rate, which was expected to be 8 per cent, was actually 7 per cent. (Prime Minister Narendra) Modi and his government need a new impetus to brace themselves up in front of the public,” it said.