China’s Economy: The news coming from India’s neighboring country China seems to be ringing the bell of new trouble on the front of global health once again. Mysterious pneumonia has been spreading rapidly in China for some time. Initially, it was called a mysterious virus, but now information has come out that it is a type of pneumonia. China is the country from where the deadly corona virus originated. The Covid-19 pandemic has given the whole world such a wound of the 21st century, the effects of which many countries have not recovered even today.
China’s economic problems continue.
Until a few years ago, China was working at full speed on its ambitions to become the world’s greatest superpower. Since the arrival of Covid in 2019, this plan of the dragon has been ruined. China’s financial situation is no longer as strong as it was before 2019 and its economy is now facing challenges on several fronts.
In April 2023, a World Bank report stated that China’s economy is facing a structural recession and the potential growth rate is likely to decline. The main reasons for this are the negative changes in the country’s population, the slow growth rate of production and the Chinese government’s global debt decisions based on an investment-led development model. These show the growing obstacles to the growth of China’s economy.
Rating agency S&P has predicted China’s slow growth.
US rating agency S&P said on 28 November 2023 that India’s GDP growth rate will increase to seven percent by 2026, while it is expected to slow to 4.6 percent for China. In a report titled ‘China Slows India Growth’, S&P Global Ratings has expressed the possibility that the growth engine of the Asia-Pacific region will shift from China to South and Southeast Asia.
China’s GDP growth will slow to 4.6 percent in 2024, the rating agency said. It will be 4.8 percent in 2025 and 4.6 percent in 2026. Along with this, S&P also said that we estimate that India will see GDP growth of 7.0 percent in 2026.
Again a threat to China’s economy
If the current disease in China has the same impact as the Covid crisis, China’s economy will be at risk again. This situation will not be good for India either. This is because no matter what one says, China is India’s major trading partner. From April to October of the year 2023, India has imported USD 60 billion from China. China’s exports have already slowed down since the Covid crisis and if the dragon country faces a health emergency again, it can be said that the impact will be seen on the supply chain to India.
Trade statistics between India and China
There is a disparity in the official data of exports from China to India and imports from China to India. The gap between India and China’s official trade figures has widened this year, according to separate sets of data released by India’s capital New Delhi and China’s capital Beijing. Simply put, India is not reporting as many imports from China as China is reporting exports to India.
Data from China showed that exports to India were worth $97.97 billion from January to October 2023, compared to $99.29 billion in the year 2022. While India’s data shows imports at $82.5 billion during January-October 2023 and $86.54 billion during January-October 2022. That is, the disparity increased by more than 20 percent to $15.47 billion in the first 10 months of 2023 (till October) in these released official figures. However, in the same period last year, this missing data or data discrepancy was $12.75 billion. The source of this data in Indian Express is shown to be India’s Ministry of Commerce and China’s General Administration of Customs of China (GACC). The reasons for this missing data will not be discussed in detail here but data disparity is a problem that needs to be addressed otherwise the true picture of trade between the two countries will not emerge.
In 2022, there will be a huge trade between India and China.
The India-China trade figures for last year i.e. 2022 were shocking and the trade between the two countries reached $136 billion for the first time during this period. This shows that no matter how strained the diplomatic relations between India and China are, on the trade front, the commercial interests of the two largest countries in Asia are deeply intertwined.
China’s troubles may have a negative impact on India.
China exports to the world and accounts for about 40 percent of global growth. If the supply chain in the Dragon Country is affected due to this current disease, China’s economy will obviously be badly affected. The mounting losses of Chinese companies mean that banks here will face difficulties in lending and production is expected to fall. If China, which is already struggling in the real estate sector, cannot focus on its core strength of exports, major trading partners like India will also have to look for other options for raw materials. It won’t be an easy task for India’s GDP, whose stellar figures were announced yesterday evening.
India’s second quarter data was announced yesterday.
India’s second quarter GDP data came on the evening of November 30, 2023, and India’s GDP stood at 7.6 percent in the July-September quarter of fiscal year 2023-24. During the last quarter i.e. April-June, the gross domestic product of the country stood at 7.8 percent. On a year-on-year basis, India’s GDP grew at a rate of 6.2 percent in the second quarter of FY 2022-23. The country’s GDP figures have outperformed all global and national estimates and India could become Asia’s new financial leader after China’s economy slows down.
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(Translation of Tags) China