INDIA AND CHINA IN TRADE DEAL

Recently the leaders of India and China agreed $22bn of business deals. The Indian Prime Minister said that China is the factory of the world and India the global back office. In a sense that is true. Certainly in India the back office outsourcing businesses is booming. Also this week we had the claim from India that it will overtake the GDP growth figures of China, pushing 7% this year as China slips below that figure, if the pundits are to be believed. But it is a bit of a oversimplification in my mind. China knows it is slowing down and the announcement only a few days ago that it is now gearing up to invest for a 2025 plan of quality not quantity in manufacturing does show that long term planning is alive and well in the People’s Republic. I for one would count on China to play a long game. Investments on a huge scale along the ‘New Silk Road’ will make a difference to China’s competitiveness in the future. The focus will be on building quality and the shift from overproduction to high value high quality will be fascinating to watch.