[Xie's perscription for India<g>] --"India must go all out for reforms: China expert:"
[India News]: New Delhi, Dec 1 : If the Indian economy grows at eight percent annually and if Indian households imitate their Chinese counterparts' yen for cars, India's car market may more than double rival China's in four years.
That is the prescription for India, among other things, by Andy Xie, head of Morgan Stanley's Asia-Pacific economics team, as he unravelled some of the secrets of China's success here Tuesday evening.
"Cheap labour, a high savings rate and the average Chinese' hunger for good things in life. Even as manufacturing is the prime engine of China's growth, trade is the natural path to full employment and rising wealth," said he.
Besides, export income plays a key role in fuelling industrialization, which in turn underpins urbanization, he added.
If the statistics doled out by Stanley Morgan's research team are anything to go by, China is set to replace Japan as the workshop of the world. It has already exceeded Japan in the US market. Its total exports will exceed Japan's in 2-3 years.
What's Xie's prescription for India? At least eight percent sustained growth over the next decade.
In the high-growth area of telecommunications, Morgan Stanley's best-case estimate is for India to reach China's current level of 295 million fixed line phones in seven years, up from 46.5 million subscribers at present.
India can surely learn a lot from China as it carries on with its second-generation reforms. First and foremost, India needs to make massive capital investment in creating world-class infrastructure and continue funding them religiously on a sustained basis.
More investment in education and developing human resources is absolutely necessary to enhance India's labour productivity in manufacturing industries.
Third, India needs to raise its rate of savings. According to Morgan Stanley's research, India saves only 24 percent of its gross domestic product, compared to a 39 percent savings rate in China.
Most importantly, it's the "can-do, will-do attitude". India can learn virtues of aggressive salesmanship to sell reforms both within India and to the world at large.
Who will win, India or China? There is really no need to despair or vacillate, said Xie, stressing that both can win.
A more business-friendly bureaucracy will surely help.
"Cut through all those thick sheets of red tape. No halfway house with reforms. Go for the jugular, man!" says the robustly optimistic Xie as he exhorts India to ignore the critics and go all out for reforms.
-- Indo-Asian News Service
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