Economic Slowdown in China Provides India Opportunity to Boost its Manufacturing Sector


Published Date : Aug 31, 2015

Devaluation of yuan and Beijing’s market interventions, as well as the weakening economic indicators in China have raised a furor in the market, prompting fresh worries about the prevailing scenario in the global economy. 

Whilst China’s slowing growth rate will certainly bring a devastating news for several emerging markets, more broadly to those located across Asia, there is definitely one prominent exception whose economy is shielded from the ongoing fallout – India. 

Malaysia, Indonesia, and other commodity-rich countries that have pumped endless fuel into the Chinese factories and power grid during its booming years are likely to be most impacted from the economic slowdown. Other countries who provided steel or cement and African countries that provided valuable metals such as coppers and oil will not be spared from the adverse impacts of the economic slowdown in China either. 

All of these countries have contributed significantly to fuel the industrial evolution in China, while the low-wage locales of Cambodia and Vietnam benefited from the rising wages in China. It is due to the significant contributions by these economies that export-oriented companies in China such as textile and garment making could penetrate deeper into Southeast Asia.

All these countries who benefited from investing in China during its booming phase and helped the industrial landscape of the country to transform in recent years are now facing trouble due to the slowdown registered in the economy. 

However, the situation is quite opposite in India, since the country is not an exported oriented economy at risk from weakening growth in China. And now experts predict that this may as well be the time to finally realize its long standing expectations and surge ahead of its contemporary. 

Unlike South Korea and other countries, India is not a manufacturing powerhouse with China being its biggest customer. India is not stagnant either, unlike Japan with shrinking population. Furthermore, unlike Malaysia and Thailand India has a democratically elected government. These factors provide a lucrative opportunity in front of India to capitalize on and strive for the economic success that the country has been waiting for.