On Monday night we co-hosted another thought-provoking discussion at Asia House, focusing on the two big economic beasts of the region, China and India. There was a great turn-out for the discussion between Alan Rosling, former executive director of Tata Sons Ltd and George Magnus, senior economics advisor to UBS, moderated by the Sunday Times’ David Smith.
China is often seen as the ‘one to watch’ to become the major super-power on the global stage but, as George Magnus pointed out, it is very difficult to predict what will happen in a country with such a dramatically ageing population. While it took the West 100 years to double its proportion of over-60s from 7% to 15%, China has reached that level in 20 years, and with a significantly lower average wage. This makes it difficult to draw parallels and anticipate what happens next.
This was only one of the topics raised in the fascinating discussion that covered everything from corruption to co-operation between the two states and the big question – which would be the more successful in the long term. On this, the mood in the room was that India would overtake China.
Another milestone in the rise of Asia: Mahindra & Mahindra, the Indian manufacturer claims to have overtaken John Deere as the world’s biggest manufacturer of tractors.
Here’s more, lifted from today’s Financial Times: “Anand Mahindra, the group’s managing director, said India’s buoyant rural economy and joint ventures in China had helped Mahindra Tractors to take the number one position in the number of tractors sold during the past two years. The growth of Mahindra Tractors reflects the emergence of Indian companies in taking dominant global market positions traditionally held by multinationals from the developed world. “The data is very clear on this,” said Harvard-educated Mr Mahindra. “The acquisition of Punjab Tractors, our Chinese [tractor] companies doing well and the substantial growth in the Indian market put us very clearly in front [of Deere] in being the world’s largest manufacturer of tractor by volume.”
Mahindra & Mahindra’s success in China is interesting. The relationship between India and China will be fundamental to all of our experience of the 21st century; if they can become deeply integrated trading partners (rather than Pacific rivals) both stand to benefit enormously, and Asia is likely to be a fundamentally stable region. The Sino-Indian relationship is something we will be exploring at Asia House next week (Monday 16th January), when we have the economists David Smith (Sunday Times) and George Magnus (UBS), and former Tata Executive Director Alan Rosling discussing how this relationship might develop. If you’d like to come along please email Ed Shawcross on firstname.lastname@example.org.
I went to the offices of the Sunday Times yesterday to do a quick interview with economics editor David Smith. Insightful as ever, David shared his thoughts by St Katherine Docks on UK growth, the future of the euro and the US debt crisis.
David said that an impartial observer would downgrade the US credit rating, but this would mean downgrading the entire global economy at a time of low confidence. Given the problems faced by the US and the eurozone, David was mixed about the outlook for the UK economy: in difficult times stability is “not bad”, he said, but borrowing and the budget deficit remain problems that need to be tackled.