The shift of power that everybody has been talking of in hushed tones for a long time, has finally started to show as economies of the world try to get back on their feet after the recent recession. However, when there is talk about China being the new economic superpower, leading the world out of its economic misery, many eyebrows are right fully raised.
India, the third largest economy of Asia, is modest in declaring its impact on the economy of the world. The fact that Indian economy has continued to grow, suffering only minor setbacks during the economic slowdown, is impressive by all standards.
While the double digit growth of China’s economy can be largely attributed to massive spending from the state, India has received only minor government funded relief packages. India’s rupee is appreciating while China is still not able to get over its obsession with accumulating foreign reserves.
The biggest advantage that India has over China is that India has a growing domestic demand which cushions it against any setbacks suffered in foreign trade, while China’s economy is largely depending on foreign trade.
In fact, it is estimated that India’s growth, owing to the well thought out economic policies and a growing service sector, will overtake China’s in the long run.
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