India becomes major rival to China
Investors should acknowledge certain structural shifts in the global economy with the eventuality of India becoming a major growth rival for China over the coming decades, according to a boutique asset manager.
4D Infrastructure said that although China was still expected to remain a major growth engine for the global economy, it was India that would emerge soon as its serious growth rival.
Additionally, according to global equities strategist at 4D Infrastructure, Greg Goodsell, Chinese one child policy had extensively detracted its demographic profile while India would still have "young generational cohort" expected to enter the workforce soon which would help sustain growth by efficiently increasing its share of the global workforce.
Also, a substantial expansion of India's middle class was expected to drive consumption and wealth creation among growing demands for improved infrastructure.
On the other side, according to 4D Infrastructure, India still would have to face a significant challenge such as the ongoing reforms.
Goodsell stressed that so far India's prime minister, Narendra Modi, who came to power in 2014, has managed to increase spending on the national infrastructure and introduce a national goods and services tax (GST) which would help unify people into a single market for the first time.
"What we can say certainly though is that, in terms of global economic growth, the coming century will be very different to the last, and China and India will be at the forefront of that experience," Goodsell said.
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