China slowdown historic opportunity for India: Arvind Subramanian

New Delhi, Sep 1 (IANS) Pointing to investment from companies like Foxconn of Taiwan and Xiaomi of China, Chief Economic Adviser (CEA) Arvind Subramanian on Tuesday said the slowdown in China is a “historic opportunity” to relaunch growth in India.

“China slowdown is a historic opportunity for India as Chinese production becomes less
profitable, India could become profitable but not guaranteed,” Subramanian said while delivering a talk at the Institute of Chinese Studies here.

“India is a net importer, so China slowdown is an opportunity to relaunch growth in India,” he said, adding that companies based in China might now view India as a hedge against the slowdown.

In a move to deal with current economic weaknesses, the Chinese central bank lowered its daily reference rate by 1.9 percent last month, rocking currency markets globally and affecting the rupee.

Commodities, particularly oil, that was under pressure for several months, slumped following an 8.5 percent decline in the Shanghai Composite Index last week. China is the world’s second-largest consumer of oil after the US.

Speaking about the recently devalued Chinese Renminbi, the CEA said India has an unambiguous interest in supporting China’s currency become the part of Special Drawing Rights (SDR) basket, or the supplementary foreign exchange reserves maintained by the International Monetary Fund.

“On the Renminbi, I think we have an unambiguous interest in supporting the Renminbi
becoming the part of SDR basket, because essentially as the Chinese currency becomes more and more international, China will have to open up its economy which is good for the world, good for China,” Subramanian said.

“And also China will be less able to manipulate its currency, keep it low, which could be disadvantageous for China. So we have a strong stake in that the Chinese currency becomes internationalised,” he added.

He said China should be able to get the geo-political benefits issuing from its currency becoming more international because the concrete economic result would be both an opening up and a tighter linking of the Chinese economy.

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of or any employee thereof. is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here