Interaction with Dr. Anantha Nageswaran on ‘Chinese and Indian Economies’

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Amid growing international concern over China’s unrelenting economic slump, the Vivekananda International Foundation (VIF) on Aug 21^st 2015 invited Dr. Anantha Nageswaran, a well-known economist and investment strategist, for a talk on ‘Chinese and Indian Economies’ followed by an interaction with the in-house scholars. Quoting data from a plethora of global financial institutions - Standard & Poor’s, Goldman Sachs, and Bank of America Merrill Lynch, among others, Dr. Nageswaran remarked China’s economic woes are far worse than what meets the eye, evidenced by a growing number of indicators. While China’s fiscal deficit keeps growing, the growth figures put out by the Chinese are hard to believe. All major sectors of the Chinese economy – industrial production, reality sector, labour market, capital investment, and household savings, among others – have witnessed sharp decline over the years. With capital flows outbound being increasingly the trend in China, the share market is almost in a state of free fall. While the crash of share market is phenomenal, the measures to stymie its fall, especially the recent devaluation of the Yuan (Chinese currency) by almost 2 percent against the Dollar, appear to have had no effect. He surmised the Yuan to fall by 10 percent in phases, with cascading effects for other regional currencies.
The impression one got from the presentation was that China is sitting on the brink of a recession, an ominous sign for the global economy. Nevertheless, Dr. Nageswaran felt China, a controlled economy, has mechanism in place to tide over the present crisis, although it would be an uphill task.

Compared to China, India is placed marginally better, even though reforms, which could catapult the Indian economy to an accelerated growth trajectory, continue to hoodwink India. Amid all the volatility presently being witnessed around the globe, the silver lining for India is her potential to emerge as the best destination for capital investment for foreign companies. The interaction ranged across a wide spectrum of economic issues, including China’s ‘One road, One belt’ economic initiative and India’s demographic dividend, among others. Dr. Nageswaran cautioned India’s demographic dividend could become a cause for huge social unrest unless it is used to economic advantages. To that end, it is imperative to impart skilling to the youth. With General (retd) NC Vij, Director, VIF, presiding over the session, Lt Gen (retd) Ravi Sawhney, Lt Gen (retd) Gautam Banerjee, Shri CD Sahay, among others, interacted with Dr. Nageswaran.