China's lower-than-expected GDP growth has stemmed from weak manufacturing sector growth amid the fears of looming trade war.
As India’s economic growth picks from the reform-based slowdown, China, on the other hand, disappoints. China clocked a GDP growth of 6.5% in the July-September quarter, at the slowest pace since the 2008-09 global financial crisis, against the expectation of 6.6%.
Economists, at large, argue that the slowing economic growth in China would make the world look at India as the second best option for manufacturing-based, labour intensive economy.
China’s lower-than-expected GDP growth has stemmed from weak manufacturing sector growth amid the fears of looming trade war. “Weakness is largely coming from the secondary industry- most notably manufacturing. We may review our Q4 forecasts,” Reuters quoted Betty Wang, senior China economist at ANZ in Hong Kong, as saying.
The Asian dragon, which posted double-digit growth for almost a decade, began slowing down last year, with just 6.9% growth due to shift in the government’s focus on climate change and elimination of poverty. However, the trade conflict with the Donald Trump administration is threatening the Chinese economy at large.
Former Chief Economic Advisor Arvind Virmani has predicted that China’s GDP growth will further slowdown to just 5% in the coming three years due to the trade war. He also opined that in a world that is becoming de-globalised, manufacturing-led economies are at a disadvantage.
While China is slowing down, India has recovered significantly from its three-year-low GDP growth by posting a stunning 8.2% economic growth in the first quarter of the financial year 2018-19. The International Monetary Fund (IMF) has projected that India will become the world’s fastest growing economy with a 7.3% GDP growth in FY18-19, while China will clock only 6.6% in the calendar year 2018.