China Tops India as Asian Economy Best Placed for Growth in Next Five Years
China scored 76.2 percent in a ranking of 16 areas including economic competition, education level, urban migration, high-technology exports and inflation that measure a country’s ability to continue delivering high growth. India was second with a score of 64.1 percent followed by Vietnam at 61.9 percent. Timor-Leste was last at 25.3 percent.
The index suggests China and India’s economic surge is durable and will likely continue to drive global growth as the U.S., Europe and Japan lag behind. Gross domestic product in each of the top three Asian countries in the index expanded at least 5.4 percent a quarter on average throughout 2008 and 2009 while the U.S., the eurozone and Japan fell into recession.
“China has a proven track record, as they have maintained superior growth for a long time,” said Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong. In particular, the Chinese government “demonstrated their ability to manage the global crisis.”
In the past 30 years, China’s economy has expanded on average by 10 percent a year as it overhauled state-owned companies and allowed more foreign investment. Among economies with annual gross domestic product above $1 trillion, India posted the second-highest growth rate after China last year, expanding by 8.2 percent in the last quarter of 2010.
However, there have been some concerns about China’s economic growth for this year (and perhaps beyond) given high inflation rates, high oil prices and other factors. From Business China:
Goldman Sachs Group is the latest financial services company to lower its forecast for China’s 2011 economic growth, citing a recent run of softer April data, high oil prices and imported inflation pressure.
“The growth slowdown has been even sharper than we forecast, especially evident in April industrial production,” Goldman Sachs said in a research note to clients on Tuesday.
Goldman Sachs lowered its forecast for China’s economic growth to 9.4% in 2011 from 10% previously. The bank also reduced its forecast for China’s 2012 growth to 9.2% from a previous call of 9.5%.
ING Group NV cut its estimate for China’s full-year growth to 9.8% from 10.2% in a research note dated May 12 and reduced its second-quarter forecast for annual growth from 10.3% to 9.6%.
Credit Suisse adjusted its 2011 estimate to 8.8% from 9.1% on May 1 and Daiwa Securities Group on May 11 said it now saw China’s GDP growth hitting 9.2% this year rather than 9.6%. JP Morgan Chase & Co. changed its estimate to 9.4% from 9.5% on May 20.