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China loses, India benefits: This is how India can replace American exports to China and boost its own economy.
The Covid-19 pandemic has caused irreparable damage to the world economy. Even giants like the United States and China have been hit so hard that it has taken months, if not years, to recover from the decline in the past few quarters.
China’s factory position has been affected by a slowing global market and US President Donald Trump’s trade war, as well as a move to ban Chinese tech companies like Huawei and TikTok. Although China’s exports have recovered rapidly, which is the backbone of the country’s economy, countries like the US and Germany have yet to find a lost foothold.
In the midst of this, however, India is able to capture the Chinese goods market left by the Americans. An Indian Commerce Department report identified at least 100 products such as cotton, corn, almonds, wheat and sorghum that could replace US exports to China imposed by Beijing. Import duties are higher on products from the US.
Experts also emphasize that exports can help improve India’s pandemic economy. Sajjid Z Chinoy, India’s chief economist at JP Morgan, quoted by The Indian Express, said: “This is the moment when India integrates into Asia’s supply chain by attracting multinational companies. The country is looking for a Chinese fence in the region.
On the other hand, China is about to change its economic model because of the challenges posed by the pandemic. At the Asia-Pacific Economic Cooperation (APEC) Forum, Chinese President Xi Jinping announced the country’s new development plan, including a dual-circulation model.
“We will promote a new development model with domestic circulation as the mainstay and domestic and international circulation supporting each other,” he said.
He added: “The new development model is a strategic decision that we have made based on China’s current development stage and conditions, while taking full consideration of economic globalization. and changes in the external environment.
Even amid the trade war, China’s exports rose 11.4% year-on-year in October, up from 8.9% as predicted by a poll of Italian. opinion of Bloomberg. On the other hand, imports grew only 4.7%, lower than the expected 8.8% increase.
Amy Celico, principal of the Albright Stonebridge Group and a former US diplomat based in Beijing and Shanghai, claims that even after the intense trade war, China remains a major exporter. third of America while America is China’s largest export market.
“Over the past two years, tariffs, uncertain business environments and policies enacted in Washington and in Beijing have all meant reducing our economic interdependence, all those things. This together leads to a serious decline in our trade relations, especially US exports to China. , ”Celico spoke at China Town Hall organized by the National Commission on US-China Relations.
At the forum, Mr. Xi Jinping also revealed the results of China’s activities in the past two decades. “The ratio of foreign trade to Gross Domestic Product (GDP) decreased from 67% in 2006 to below 32% in 2019, while the ratio of current-account surplus to GDP decreased from 9.9% annually. 2007 fell below one percent today. , “he noted.
He added: “In the seven years since the 2008 global financial crisis, China’s share of domestic demand to GDP has exceeded 100%, making domestic consumption the main growth engine. This Führer “.