China a choked dragon an opportunity for India

China a choked dragon an opportunity for India

Rohan Takalkar
/ Categories: Trending, Markets
Rising debt levels and environment concerns has made the Chinese government shift focus from economic growth to containing debt and improving quality of the environment. Over the past decade, China has seen a growth of 6.8  per cent , which earned the dragon economy GDP of $12 trillion in 2017. This came with the challenges of huge debt and alarming levels of pollution. Further, the country sits  on  6.25 per cent of global debt and its debt has reached 242  per cent  of GDP in 2016.

Further, IMF in its outlook on Chinese economy indicated that its debt might rise to 300  per cent  of GDP by 2022 raising concerns and a possible slowdown in the medium to long-term period. Therefore, in its recent blue print, China has slowed down its growth estimates at 6.5  per cent  for five year period to tackle the debt issue. However, at this rate also its economy will double from 2010 levels.

What’s in for India?

India is being considered as a sweet spot in Asia as the economy is recovering from the temporary jolts faced due to demonetization and GST implementation. China’s slowdown has made India favourable destination for foreign investors. Also, India may witness US$240 billion of FDI inflows by 2025 from the current levels of US$100 billion. On the other hand, rising domestic investor participation in the equity markets has also fueled the market rally.
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