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Saturday, 21 November 2015 19:50

China’s economic slowdown adversely affected India: Rajan

China’s economic slowdown adversely affected India: Rajan

China’s pain of economic slowdown is India’s pain too, Reserve Bank of India (RBI) Governor Dr. Raghuram Rajan said contradicting government assertions that India will not be affected by deceleration of Chinese economy.

“The Chinese slowdown is a concern for the whole world. There is a lower demand for some of our exports to China. But indirectly too, many of the countries are not exporting to China as much as they did and they are buying less from us,” Rajan said in an interview with Hong Kong-based South China Morning Post.

 

“But India being a commodity importer, has been helped a bit by cheaper commodities. So the impact has not been as bad as it could have been. Still, on the whole, we have been adversely affected by the Chinese slowdown because China’s slowdown has impacted global growth and India is very well integrated into the global economy”, Rajan said.

Finance Minister Arun Jaitley had told a gathering at Columbia University last month that India is “not impacted” by the slowdown as it is not part of Chinese supply chain and India could become the “additional shoulder” the global economy needs to stand on as China slows.

Some comments from India that China’s pain is India’s gain has drawn strong reactions from the Chinese media.

Rajan was in Hong Kong on Friday to receive honorary doctorate awarded by the Hong University of Science and Technology.

In his interview Dr. Rajan also pointed to “growing interdependence” between India and China.

Rajan said he hopes India will emulate China’s growth rates and the country would like to learn from things China got right.

“We would like to learn from its manufacturing success, how it built up its infrastructure, how it encouraged its village enterprises and how it manages FDIs in such enormous quantities. A lot of Indian businesspeople who travel to China also keep coming back with stories of why it works better than India”, he said.

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