India and China will experience high growth rates in the coming years, which will push ahead the Asian, as well as the world economy.
This was the key point that emerged from the session on India and China organised jointly by the Confederation of Indian Industry and the Deutsche Bank in New Delhi on Tuesday.
Sanjeev Sanyal, senior economist, Deutsche Bank, said conventional wisdom suggested that India's strength was in services, while China's was in the manufacturing sector. This made the economies complementary to each other, he added.
However, he said a decade of reforms had significantly changed the dynamics of the Indian economy. Sanyal said in all likelihood, the future relationship between China and India would be both complementary and aggressively competitive.
Sanyal said the financial system in China presented the biggest risk. The non-performing assets of banks amounted to 25-30 per cent of loans, he said.
He added that the government's pension liabilities amounted to around 60 per cent of the gross domestic product. However, he said this was not a cause of immediate concern.
Speaking on the occasion, Jairam Ramesh, secretary, Congress Party, said the mindset of the Indian industry had undergone a sea change during the last few years.
However, he said the Indian mindset, which perceived China as a security-political threat, rather than an economic one, needed to be changed.
Piyush Bahl, senior director, CII, said, "Bilateral trade during January-March 2003 has seen a tremendous jump. Therefore, speculations about trade being affected during the past few months holds little value."
Indian exports to China during January-March 2003 have been estimated at $947 million, compared with $432.01 million in the corresponding period in 2002.
Indian imports from China stood at $722.68 million during January-March 2003, while it was $506.89 million in the same period in 2002.
Among the items exported to China, iron and steel have the largest share. Organic chemicals and plastics also form key export items.
To enhance its presence in China and to enable Indian companies to get business opportunities in the country, CII will soon launch a India Club.
The industry body will also open an office in China and hold a Made in India show there in October.
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