China, slowing to 19-year low, watches India closely
Both India and China may grow at almost the same pace next year, when the global slowdown triggered in the US and Europe will hit home harder. The World Bank in Beijing forecast that China would grow at a 7.5 pc rate next year which is close to India's 7 to 7.5 pc growth projection. Reshma Patil reports.world Updated: Nov 26, 2008 01:24 IST
Both India and China may grow at almost the same pace next year, when the global slowdown triggered in the US and Europe will hit home harder.
<b1>On Tuesday, the World Bank in Beijing forecast that China would grow at a 7.5 per cent rate next year --- China's lowest since 1990 --- and a drop from 9.4 per cent growth projected for this year. There is no Bank figure for India, but Prime Minister Manmohan Singh has predicted a 7 to 7.5 per cent growth.
China is the world's fastest-growing economy and had expanded in double digits for the last five years, touching 11.9 per cent last year.
"More than half of our GDP growth forecast of around 7.5 percent for 2009 is coming from government-influenced spending,'' said the report's main author Louis Kuijs in Beijing.
"We're encouraging China to look to a new growth model that depends more on domestic demand and domestic needs," said a statement from David Dollar, the Bank's country director for China.
A day earlier, Prime Minister Manmohan Singh's economic crisis-control got a thumbs-up from the mouthpiece of the ruling Communist Party of China, the People's Daily. On Monday, the paper carried an online opinion piece that said India is doing its best to cope with the crisis.
"With regard to global economic recovery, India will play a decisive role on whether emerging economies can effectively tackle the financial turmoil," said the piece titled India urged to play a new role.
"The endeavour India is making reflects the determination of emerging economies to cope with the crisis," it said. "India is doing its best to tackle the crisis and efficiently push forward the reform of the financial system, which will undoubtedly give the emerging economy an important role in global economic development".
The article described the downturn in India at length, emphasising that the IT industry 'India is always so proud of' made little profit because 60 per cent of the clients were in Europe and the US.
Singh's counterpart Premier Wen Jiabao, who recently toured China's slumping factories and trade zones, has described the impact of the economic crisis as 'worse than expected.'