The reopening of Chinese economy will provide further impetus to global growth and may indirectly benefit India in the short term, without any adverse impact on India's long term plans to take advantage of the China + 1 concept (diversification of global supply chains by multinational businesses), says Auguste Tano Kouame, country director for India, The World Bank.
Interacting with the media at the launch of World Bank's India Development Update in New Delhi on April 4, Kouame said the two – reopening of China and the China + 1 concept, need to be looked at separately. "The reopening of the Chinese economy is important for the short term prospects of the global economy, including India. The concept of China + 1 concept, a long term issue, is a different conversation. Whether India gains from the opportunities arising out of China +1 has nothing to do with the short term opportunities the reopening offers," he said.
Kouame points out that India's ability to be part of the global supply chain by making use of the China + 1 strategy will depend upon its own policy initiatives. "That will depend on how India plays the game to become the next China. It depends on what kind of policy measures are in place to attract big private investment," he said.
Coming back to the short term impact of the reopening of China on India, Kouame said in a short term perspective, it is a positive development. "If China reopens, it adds to the global growth, and even though it may not have a direct impact (on India-China bilateral business), it will increase global demand and India may benefit out of it. In that sense, it is positive," he explained.
The World Bank's India Development update says that India's GDP growth is projected to moderate to 6.3% in 2023-24, constrained by slower consumption growth, fiscal consolidation and challenging external conditions. The upside potential for global growth for 2023-24 comes from reopening of China's economy. For the Indian economy, the World Bank sees stronger than expected pick-up of investment by private corporations and the government's measures to facilitate business activities through PLI scheme, masterplan for logistic development, simplifying business regulations etc, which inturn can crowd-in the private investment.
