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China Then, India Now

Investor reaction to China’s 20th Party Congress in October was swift and ugly. The Monday after the event concluded, Hong Kong’s Hang Seng index fell 6.4%, the worst one-day drop since the 2008 financial crisis. Goldman Sachs’ index of Chinese ADRs sank 15%. China’s yuan reached its lowest point versus the U.S. dollar in 14 years.

Markets can process any kind of news: good, bad and neutral. What markets hate is surprise. Certainly, the reach of President Xi Jinping’s power ambitions were no surprise. His becoming president for life was expected. Rather, the shock (to global investors anyway) was Xi’s warm embrace of 1949, the year Mao Zedong prevailed in the Chinese civil war (1946-49) and created the Marxist-Leninist People’s Republic of China. It is stunning that Xi, leader of the world’s second largest economy, sees greater glory in the frequent mass starvation years between 1949-76. It’s as if Deng Xiaoping’s post-Mao miracle of reforms, and booms in innovation and prosperity, were bad for China.

While China copes with its self-inflicted errors, let’s turn to India. Gautam Adani, who tops the list of India’s richest, sees a bright future for the country. The chairman of Ahmedabad-based Adani Group, which has interests in ports, airports, green energy, cement and more, spoke at September’s Forbes Global CEO Conference in Singapore.

Below are highlights of Adani’s speech. (His comments are edited for brevity.)

  • Globalization is at an inflexion point. It will look very different from what we had come to accept in a largely unipolar world.
  • We are now witnessing a new set of geopolitical couplings as we transition into a multipolar world. What I see ahead are the new principles of global engagement based on greater self-reliance, lowered supply chain risks and stronger nationalism. Some have called this “the rising tide of deglobalization.”
  • Global turbulence has accelerated opportunities for India. It has made India one of the few relatively bright spots from a political, geostrategic and market perspective.
  • What many see as India’s imperfections reflects a thriving and a noisy democracy. Only the free can afford to make noise—to have their imperfections visible. To over-manage this would be to destroy India’s unique ability to express its diversity.
  • India has just become the world’s fifth largest economy. We are on the path to be the world’s third largest economy by 2030. India’s real growth is just starting.
  • Between now and 2050, India will become a country with 100% literacy levels. India will also be poverty-free, well before 2050. We will be a country with a median age of just 38 years even in 2050, with the largest consuming middle class the world will ever see.
  • India will attract the highest levels of foreign direct investment given the sheer scale of consumption of 1.6 billion people. (Last year, India recorded its highest annual FDI inflow of $85 billion. Inflow this year is expected to cross $100 billion—thereby setting another record.) We will be the country that will go from a $3 trillion economy to a $30 trillion economy, a country with a stock market capitalization of $45 trillion, and a country that will be supremely confident of its position in the world.
  • It took India almost 58 years post-independence to reach the $1 trillion GDP mark. It then took 12 years to achieve $2 trillion—and thereafter, only five years to achieve $3 trillion. This rate will further accelerate as the digital revolution kicks in and transforms every type of activity at a national scale.
  • In 2021, India added a unicorn every nine days, and it executed the largest number of real-time financial transactions globally—a staggering 48 billion. This was three times greater than China and six times greater than the U.S., Canada, France and Germany combined.

Search : Forbes.com https://www.forbes.com/sites/richkarlgaard/2022/11/10/china-then-india-now/?sh=385163475a2d