Wednesday, November 22, 2006

India and China- New Monsters on the Horizon

Today's news read..............India and China have pledged to double trade to $40bn (£21bn) a year by 2010 during talks between Indian PM Manmohan Singh and Chinese President Hu Jintao.

On this ocassion Hu jintao said, "We both believe that an early settlement on the boundary question serves the fundamental interest of our two countries ". Please read it carefully..China is a smart nation which never gives full control to another nation and always keep situation ambigious for their own benefit.

Lets look back and discuss how the relationships are gonna work.

Currently China and India along with Russia are the frontrunners for the next big economic giants. Perhaps, china will take over their rivals to lead the race as they are doing today. Strong government, right attitude and pouring FDI has made china a strong nation that it was 20 years back.

India on the other hand is just starting to taste the globalisation fruits. With growing demand for real estate in india (for novice, the real estate market in india has grown by more than 800% in one year) has changed the way people look at india. However, poor government rules in smaller states along with attitude of the perople, growing population and sustained growth will be the issues hovering around for the next 15-20 years. I suspect india start to really develop by mid-2025. The time when most of the other countries will forget whats development, coz they will be living in 2080's. India will lag till 2050 before they could make it up with likes of singapore, china etc.

One of the concern for india to be with china is growing relationship between china and pakistan. Anything related to pakistan, india gives a second thought.

I believe, this will definately help india but unfortunately not a quick difference, but definately not a waste since it will make a difference in the long run perhaps after 10 years or so, when markets become more competitive and low cost countries will dominate business.

Good luck to India and one advice.."Play safe with China"