China cannot overlook India's increasing competitiveness in the manufacturing sector, an editorial in China's Global Times wrote said on Friday (March 3). It said that India's growth in manufacturing is of "strategic importance and deserves more attention".
However, the editorial raised doubts over the rate of economic growth i.e., seven per cent, between October and December 2016. It also said the 8.3 per cent growth in manufacturing sector in the third quarter of India's fiscal year in 2016 was "exaggerated". It added that Prime Minister Narendra Modi's demonetisation "put a dent in India's economic momentum".
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The editorial also said that China's manufacturing wage in 2016 was almost five times more than that of India.
The editorial in its guise of praise underlined all flaws and seems to indicate that despite flaws in India's manufacturing sector, it is growing. The daily, published by the Chinese Communist Party's mouthpiece People's Daily, quoted Nikkei India Manufacturing Purchasing Managers' Index, saying that it grew to 50.7 in February from 50.4 in January.
However, according to the editorial, India is only in its "initial state of developing export-oriented manufacturing industries".
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"Although it is too early to say that India will replace China as a manufacturing giant, as it is not easy to form a complete industry chain from screw to commercial airliner in a short time, increased competitiveness from Indian-made products should be closely watched," the editorial said.
Also giving China a reality check
The article also seemed to warn its own government saying that the arrogant attitude of China could prove "dangerous" for itself. India's exports to China in January increase 42 per cent year-on-year and was overlooked by Chinese analysts.
"Scholars should make a careful analysis about the soaring growth to find out whether this is merely a flash in the pan or a result of subtle changes in competition in the manufacturing sector," it read.
India's rapid economic expansion could be of advantage to the Chinese since its consumer market would be maturing, but manufacturers in China would face competition from India, the editorial said.