CHENNAI: India could overtake China economically as the Communist country has exhausted its resources and is now working on qualitative growth, according to Dr Jacob Kurien, resident professor of International Economics, Nanjing University.
Delivering a lecture on Economic Transformation of China at Madras Institute of Development Studies here on Thursday, he said that India has the ability overtake China as the current government has a majority in the parliament and could expedite all the infrastructure projects provided there is no legal tangle.
He said India’s Gross Domestic Product will grow as its resources are yet to be tapped while in China’s case, it has exhausted its resources.
He said that China’s growth was more of a quantitative one. “The total productivity has declined in China as officials focused more on quantity rather than quality,” Kurien said.
“The earlier policy focused on rewarding growth quantitatively. Officials were keen to show the growth rate at any cost. This has affected the growth qualitatively and given rise to corruption forcing the foreign markets to tread cautiously in China,” Kurien said.
Now China is addressing this issue and is focusing on qualitative growth. Some of the measures include shutting down polluting units. “The pollution in China was such that top CEOs were not keen to stay in the industrial cities,” he said. He also said that China has also shut down many of its companies that were not remunerative.
The communist country is now focusing on consumption driven growth rate, he said. Interestingly, the quantitative growth of China has also resulted in a huge urban-rural divide. “It is one of the largest in the world,” said Kurien.
However, he said unlike most of the Asian economies, the saving rate of China is above 50 per cent. Interestingly, the communist nation instead of rewarding the depositors taxes them and the money is given to state owned companies. He said that the growth of China was focused only on the coastal region and now the country is looking to develop its inland region.
He said that the infrastructure in China is above its capacity. “This has resulted in internal debt but then the country would clear it as it has huge savings,” said Kurien.
The focus of the workforce is to make money as they don’t have the right to own land. “The land is leased out to the workforce and when the projects are to be undertaken the residents are shifted to other place. They are connected to the high growth regions through high speed rails,” he said.