Update: March 22, 2022 01:53 STI
Hong Kong, Mar 22 (ANI): China’s economic slowdown is changing geo-economic dynamics, creating supply chains and new opportunities for India.
“The Indian economy, in particular, has continued its economic reforms uninterruptedly over the past decade, especially to improve the ease of doing business. The emergence of India as an alternative to China is compelling because, in infrastructure, transportation, mass education, literacy, public health, e-commerce, job opportunities for women and
skilled labor etc, India is far ahead of its peers,” Hongkong Post reported.
Listing the reasons, the Hong Kong Post reported: “As the first quarter of 2022 comes to a close, China has failed to normalize its economy as it continues to struggle with property prices and a rising inflation. China’s trade dispute with the United States and declining confidence in China-centric supply chains could further compound the country’s problems.”
Similarly, China’s external footprint was also shrinking as BRI partners Sri Lanka and Pakistan faced an economic crisis with financial flows from China seemingly reduced.
Amid the resurgence of the Omicron variant of COVID-19, China continues to face economic disruption with most of its industrial centers forced to close, including Shenzhen and Changchun which account for 11% of Chinese auto production, according to a media report.
“India has the potential to become an important global manufacturing hub for companies looking for an alternative to China,” he added.
As most major US companies have either set up large technology operations in India or continue to rely heavily on India-based IT capabilities.
India’s manufacturing sector has also come a long way in many sectors including chemicals, pharmaceuticals, plastics, textiles, garments and steel. Now it is trying to expand up the value chain into newer and diverse fields, namely mobile phones, semiconductors, medical devices and supplies, auto parts, batteries, telecommunications equipment, food products, production of white goods for defence, electronics, solar panels. , and toys, etc. All of these are major areas of Chinese
manufacturers who seem to be looking for new locations given the
disruptions in China and rising labor costs, he added.
According to most economic forecasts, China’s GDP estimates for 2022 would be between 5% and 5.5%, which is below the rate required to employ young Chinese.
Additionally, the Chinese government’s crackdown on real estate, EdTech and technology companies has affected the flow of capital into these sectors, which could be leveraged by India and the EAC to diversify manufacturing.
While there is a shortage of labor in China, India and Southeast Asian (EAC) countries still offer cheaper locations with an abundant supply of labor. In addition, the incentives offered by India under “Make in India” and “Start-up India” provide opportunities for investors worldwide, the outlet reported. (ANI)