A worker in a protective suit collects a swab from a resident at a makeshift nucleic acid testing site during a mass testing for the coronavirus disease, in Chaoyang district of Beijing (Photo: Reuters)
China's economic slowdown is altering the geo-economic dynamics resulting in creating supply chains and new opportunities for India.
"The Indian economy, in particular, has pursued its economic reforms in an uninterrupted manner during the last decade including for improving the Ease of Doing Business. India's emergence as an alternative to China is compelling because, in infrastructure, transportation, mass education, literacy, public health, e-commerce, work opportunities for women andskilled workforce etc., India is far ahead among its peers," Hongkong post reported.
Listing out the reasons, The Hong Kong Post reported, "While the first quarter of 2022 has come to an end, China has failed to normalise its economy as it continues to grapple with real estate prices and an uptick in inflation. China's trade dispute with the US and the declining trust in China-centric supply chains may further increase the problems for the country."
Similarly, China's external footprint was also declining as Sri Lanka and Pakistan,the BRI partners were facing an economic crisis with financial flow from China apparently reduced.
Amid the resurgence of the Omicron variant of COVID-19, China continues to face economic disruptions with most of its industrial hubs compelled to close down including Shenzhen and Changchun which account for 11 per cent of China's automobile output, said a media report.
"India has the potential to become an important global manufacturing hub for those companies seeking an alternative to China," it added.
As most of America's leading companies have either set up large technology operations in India or continue to rely heavily on India-based IT capabilities.
India manufacturing sector has also come a long way in many sectors including chemicals, pharmaceuticals, plastics, textiles, apparel, and steel. Now it is trying to scale up in the value chain in newer and diverse areas, viz., mobile phones, semiconductors, medical devices and supplies, automobile parts, batteries,telecom equipment, food products, white goods defense production, electronics, solar panels, and toys etc. All of these are major areas of Chinesemanufacturing which appear to be in search of new locations in view of economicdisruptions in China and rising labour cost, it added.
According to most economic forecasts, the GDP estimates for China for 2022 are said to be between 5 to 5.5 per cent, which is lower than the rate required to employ the Chinese youthfully.
Moreover, the crackdown by the Chinese government on real estate, EdTech and Technology firms has affected the capital flow into these sectors, which could be leveraged by India and EAC for diversifying manufacturing.
While there is a shortage of labour force in China, India and South-East Asian Countries (EAC) still offer cheaper locations with an abundant supply of labour. Besides, the incentives offered by India under "Make in India," and "Start-up India" offer opportunities to investors from across the world, reported the media outlet.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Mar 22 2022 | 7:55 AM IST