India offers attractive yields, a favorable currency outlook, strong macroeconomic fundamentals, skilled manpower, vibrant democracy and stable government policies for debt investors. Covid-19 disrupted the supply chain globally, posed trust crises among countries and paved the way for a new economic and world order.
According to Indian philosophy – the action of KARMA determines the outcome of KARMA. The malicious intentions of China intending to ruin the economies of the nations fall back on itself. Xi Jinping is In-fact the Frankenstein of China. Be it Belt-and Road initiative, business rivalry with the USA, border dispute with the neighbouring countries, foreign and economic policies of China – all have been designed to gain unlawful advantage. In the process China has lost the trust of friends and foes alike.
The Chinese economy is currently facing a crisis of confidence. China is failing badly on the economic front. In-fact China’s rise to economic super power is just the façade. For example China’s Evergrande Group filed the bankruptcy protection in a New York court. The Group managed to take a loan of 2.6 trillion yuan while its total assets are just 1.2 trillion yuan. It could not have been possible without the political aid of Chinese Communist Party. The crumbling Real Estate contributes 30 percent of China’s GDP. Starting with Evergrande, the top 10 Chinese companies may meet the same fate. In a way an organised financial crime is underway to syphon the money to safe destinations.
China’s economy is a ticking bomb. Foreign institutional investors (FIIs) have pulled up $ 140 billion from China’s stock market. It may go up to 400 billion to $ 450 billion in due course of time. While the FIIs are investing heavily in Indian stocks.
The emergence of the EV revolution in China is also a façade. They manufactured unsafe electric vehicles for African markets, which eventually was replaced by Indian automakers with batter quality of vehicles. China has become the graveyard of un-exported vehicles – polluting the environment and soil. The ripple effect on the economy forced to shut down the manufacturing units in Guangdong and Shanghai – rendering people unemployed. Mobile production and the biggest shoe manufacturing company has been shut down in Guangdong, leaving more than 0.4 million people jobless. The USA has denied the strategic semiconductor chips supply to China as it is crucial for the military, space and automotive industry. The moral of the story is that China is no longer a safe destination for investment.
China’s Zero-Covid policy was implemented just to delay the break-down of economy. China’s exports fell by 14.5 per cent in July, while imports dropped 12.4 per cent. Overall unemployment rate has risen to 5.3 per cent in July. China’s debt is now estimated at 282 per cent of GDP, which is more than that of the US. Moreover, cracking down on the tech sector – video gaming, ed-tech, e-commerce has resulted in huge losses of revenues and jobs.
On the other hand, India is ranked as the most attractive emerging market for investing in emerging market debt. India’s efforts to capitalise on the ‘China plus one’ strategy can get a boost. India is confident to compete with China as a major player in the global supply chain and as a manufacturing hub.
Nine years of reforms in economy, finance and social sectors have started bearing fruits now. Setting up a target of being a developed country by 2047 is not a mirage. The world should listen then as we are listening now. India emergence sings enchantingly to the delight of humanity. The march to the glory has just begun.
By Devendra Kumar, Editor in Chief, ELE Times