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India’s economic progress has surprised the world. But China is suffering the most due to the country’s rapid growth. In fact, while foreign investment is increasing in India, it is decreasing in China. Global rating agencies are increasing India’s growth rate estimates and reducing China’s. India’s growing exports and strong market are also making it the most attractive destination in the world.
Amidst the rapid growth of India’s economy, the pace of China, the world’s second largest economy, has slowed down. From the banking crisis to the real estate crisis and now the fall in the stock market too, there has been chaos in China. The biggest reason for the decline in China’s economy is the decline in foreign direct investment. Due to this, China is gradually falling into recession.
Lowest FDI in 30 years
According to Bloomberg report, foreign direct investment (FDI) coming into China is decreasing and it has been the worst in 30 years. Last year, the foreign investment received by the country was only 33 billion dollars, which is 82 percent less than in 2022. China’s direct investment liabilities will come down to $33 billion in 2023, which is the lowest since 1993.
At the same time, the strongest pillar of China’s economy i.e. the real estate sector is also in serious crisis for the last few years. China’s largest real estate company Evergrande has gone bankrupt. The real sector crisis has also engulfed the banking sector. Banks giving loans to real estate developers are also getting into trouble. Due to the impact of all these tensions, China’s stock market has come under pressure.
At the same time, the deepening tension with America is also a major reason for the decline in China’s stock market. Now China’s weak growth rate is driving investors away from here. This year, China’s growth rate is expected to fall to 4.6 percent as compared to 5.2 percent in 2023. If this estimate proves correct, then this will be the worst performance of China’s economy in 10 years.
India becomes an alternative to China!
The situation is such that foreign companies and investors have started seeing India as an alternative to China. Indian stock markets are continuously making new records. Investors are getting excellent returns from short term to long term. According to experts, India’s stock market can be successful in giving great profits to investors in the long term. Due to large number of retail investors joining the stock market, its pace has increased and there has been stability in it.
At the same time, domestic institutional investors are purchasing an average of $2 billion in the stock market every month. IMF has increased India’s growth rate to 6.7 percent, while China’s GDP growth estimate has been reduced to 4.6 percent. Big companies like Apple, Micron, Foxconn now want to make their production hub in India instead of China. Overall, China’s declining economy has brought a great opportunity for India.
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