Just yesterday, the Organization for Economic Cooperation and Development (OECD) released a new report predicting that the economy of China will rebound and grow 8.5% in 2013 and 8.9% in 2014, citing increasing domestic consumer demand and government spending on housing and infrastructure as the tailwinds behind this renewed surge.
When it comes to China and India, we at The Boston Consulting Group (BCG) urge you to bet in favor of both.
According to The Wall Street Journal, the OECD report attributed China’s slightly less robust 7.5% growth rate this year to a slowdown in exports and the government’s intervention to stave off inflation and rein in property prices. The OECD report also expressed optimism that India’s economy will resume growth over the next two years, indicating that its currency will likely be shored up soon and that its current-account deficit issues will be stabilized, too.
Given recent blips in both countries’ economies, many prognosticators have sounded dire alarms, urging caution for Western companies pondering their future initiatives in China or India. In our new book, The $10 Trillion Prize: Captivating the Newly Affluent in China and India, we posit that growth in China and India will not occur along a straight line, and both countries will have to overcome corruption, imprudent investments, social disharmony, pollution, natural disasters, and political conflict.
Annual consumer spending in India and China combined will therefore reach $10 trillion by 2020.
But our book’s primary thesis — and one that we continue to maintain — is that the economies of China and India will continue to grow at a compound annual growth rate of at least 8% through the end of the decade, and that annual consumer spending in the two countries combined will therefore reach $10 trillion by 2020.
RCEP and China: Reimagining the future of trade in Asia
The Regional Comprehensive Economic Partnership (RCEP) could eventually usher in an era of much deeper regional integration: for corporates doing business in the region, their future success may well hinge on how adeptly they manage to navigate the evolution of Asia’s trade landscape under the RCEP.
Last month, 15 countries in the Asia-Pacific region – including the 10 member states of the Association of Southeast Asian Nations (ASEAN) as well as China, Australia, Japan, New Zealand, and South Korea – signed the landmark Regional Comprehensive Economic Partnership (RCEP) on the final day of the 37th ASEAN Summit.(more…)
Thailand ready to ink big Chinese-backed trade deal
The RCEP will cover all 10 Asean member states plus five partners: China, Australia, Japan, New Zealand, and South Korea and will take effect from the middle of 2021 if at least six Asean members and three partners agree to its terms.
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