While China’s retail trade rose by 8% on-year, its industrial production surged by 6.2 per cent on-year in November 2019.
Even as emerging markets such as India and Vietnam are trying to take over China’s lost opportunity amid trade war with the US, the dragon is quickly regaining its momentum. Retail sales and industrial production in China surged to a 5-month high in November 2019. While China’s retail trade rose by 8 per cent on-year in November 2019, following a 7.2 per cent gain in the previous month, its industrial production surged by 6.2 per cent on-year in the month, accelerating from a 4.7 per cent rise in the previous month.
However, on the contrary, India’s industrial production is shrinking since August and no immediate relief is visible anytime soon. India is undergoing a severe economic slowdown for which global factors were also held responsible by RBI and the government. “Intensification of global uncertainty around US-China trade tensions, a hard Brexit and geo-political tensions are key downside risks to the baseline growth path,” RBI had said in its bulletin.
Another statement also said that going forward, the on-going trade war between the US and China has increased the scope for diversification of global FDI and manufacturing away from China. Consequently, EMs like India can reap this opportunity by ensuring a conducive business environment for foreign investors which may, in turn, help strengthen the domestic manufacturing base for exports.
But, it looks odd that the country directly involved in the trade war is on the verge of touching an 8-month high and India, which is indirectly said to be affected by the trade war is on a freefall. Meanwhile, India registered a GDP growth rate of a mere 4.5 per cent in the second quarter, after clocking a 5 per cent GDP growth in Q1. To fight back, Finance Minister Nirmala Sitharaman had announced a slew of measures in the last few months, which are yet to bring the desired results.