Yuan fell after the Chinese cut interest rates again. China is staring at possible fears of Japanese style competitive price cuts by vendors. Equity stocks responded positively as rate cuts mean reduced costs. It just is also a signal that the Chinese currency will be cheaper and that is quite a portent of competitive depreciation. Dollar policy makers may not like that bit although one might just about like a good growth figure from China from a global perspective.
There is an attempt by India to showcase that it has exceeded the Chinese growth rate and earn brownie points on being the fastest growing economy in the World. IMF comments are being quoted in support. This seems unwarranted jingoism- Ghana once had 9% growth rate!.
India's revised GDP figures put the growth rate at 7.4 % after recent changes the way GDP is computed. The Chinese though aware that India is nowhere close in regard to its economic size, but is nevertheless, keen repetitively reassert to ensure that it is the market leader in Asia.
India would have to cover quite a lot of ground to catch up, : this author feels that India might be a decade behind China - although currently the Chinese manufacturing has been slowing and India has just launched a Make In India campaign. What India must do is soul search to bring investment in to its dilapidated infrastructure and similar issues.
With the Reserve Bank of India holding a Bundesbank type attitude on inflation, costs of the Indian corporate sector may come down slowly , particularly now since oil prices seems rising. The budget has seeds of inflation; fuel prices have already moved up. That makes it even more difficult for the RBI to move rates down.
India really needs to ask itself where its imperious bureaucracy is stalling projects. Investors like Warren Buffet who are sitting on tons of liquidity avoid India. That is perhaps of the oligarchic hold of the local industry who kill entry through its stranglehold on matters. (Remember Vodafone? Look at the state of inefficiency of BSNL the major service provider and one will know why big players avoid India. ) The cronyism between large industrial houses and the the bureaucracy is best exemplified in the recent case of industrial espionage. India needs to really restructure itself not just symbolically.
Sending up the stock markets without concomitant moves up in the fundamentals is untenable for any economy. There is nothing to be proud of in an appreciating currency in today's world where competitive depreciation is taking place.
There is quite a bit of currency and strategic games at play in Asia too.
Without risk or responsibility.
There is an attempt by India to showcase that it has exceeded the Chinese growth rate and earn brownie points on being the fastest growing economy in the World. IMF comments are being quoted in support. This seems unwarranted jingoism- Ghana once had 9% growth rate!.
India's revised GDP figures put the growth rate at 7.4 % after recent changes the way GDP is computed. The Chinese though aware that India is nowhere close in regard to its economic size, but is nevertheless, keen repetitively reassert to ensure that it is the market leader in Asia.
India would have to cover quite a lot of ground to catch up, : this author feels that India might be a decade behind China - although currently the Chinese manufacturing has been slowing and India has just launched a Make In India campaign. What India must do is soul search to bring investment in to its dilapidated infrastructure and similar issues.
With the Reserve Bank of India holding a Bundesbank type attitude on inflation, costs of the Indian corporate sector may come down slowly , particularly now since oil prices seems rising. The budget has seeds of inflation; fuel prices have already moved up. That makes it even more difficult for the RBI to move rates down.
India really needs to ask itself where its imperious bureaucracy is stalling projects. Investors like Warren Buffet who are sitting on tons of liquidity avoid India. That is perhaps of the oligarchic hold of the local industry who kill entry through its stranglehold on matters. (Remember Vodafone? Look at the state of inefficiency of BSNL the major service provider and one will know why big players avoid India. ) The cronyism between large industrial houses and the the bureaucracy is best exemplified in the recent case of industrial espionage. India needs to really restructure itself not just symbolically.
Sending up the stock markets without concomitant moves up in the fundamentals is untenable for any economy. There is nothing to be proud of in an appreciating currency in today's world where competitive depreciation is taking place.
There is quite a bit of currency and strategic games at play in Asia too.
Without risk or responsibility.
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