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India, Not China, Leading Global Recovery

Oct. 26 -  The global services office business, Regus, surveyed 11,000 corporate organizations spread across 15 countries, including their extensive networks in China, India, Europe and the United States and concluded that the global recovery is being led by India and not China as commonly thought.

The Regus Business Tracker survey says that while the aftermath of the global economic crisis has been taking time to settle down globally, the Indian market has led the way with economic growth and confidence. The results are also reflected in the form of increased foreign investments and increasing IIP numbers marking strong industrial production.

According to the survey, Indian businesses are expecting to see signs of recovery by March 2010. India is by far the most optimistic of the 15 countries surveyed, surpassing the global average.

India’s corporate outlook on economic recovery coincides with an increase in profits that has also surpassed the international average. An estimated 45 percent of Indian firms increased profits last year compared to 40 percent of companies globally. Additionally, 49 percent of Indian companies experienced an increase in revenues last year, as opposed to 46 percent globally.  Among India-based businesses that experienced a decrease, 56 percent expect revenues to rise in 2010.

The survey also indicated that the United States  and Germany are likely to witness economic recovery by August next year, while the United Kingdom would rebound by September. South Africa would see the beginning of a significant economic recovery in May, while for Australia, Belgium and Canada it would be in June.

China is not expected to see recovery until July, and this also would be subject to issues concerning renminbi appreciation. France and Mexico would see also see economic rebounds in July, and Spain not until October.

Concerning India, strong expectations have also been echoed by the SME sector, with 85 percent of Indian SMEs anticipating revenue growth in 2010, against 72 percent of larger businesses. It was found that 57 percent of Indian corporations feel that they would see an increase in revenues next year.

Regus’ country head Madhusudan Thakur  was quoted by India Times as saying: “The relatively positive prediction from Indian firms has to be tempered with an element of caution, with astute firms remaining tightly controlled in the beginning of next year.”

Chris Devonshire-Ellis, managing partner for Dezan Shira & Associates in India told 2point6 billion:“The outlook in India is positive and most businesses I am speaking to are preparing to recruit staff and are actively expanding marketing and operational budgets for 2010. In China we are still seeing retrenchment, non-replacement of natural loss of employees, and uncertainty over the economic position.”

He adds: “The true fiscal position of China is still unclear and investors remain cautious. We do not see much real growth in China at this moment, while India in contrast seems to be picking up a sustainable head of steam. We are seeing signs of investors in Asia preparing to redirect money from their China budgets to fund expansion in India.”

Related Reading

Is China Heading For A Bubble Bursting Downturn?
India Think-Tank Forecasts 6.5 Percent Growth

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9 Responses to India, Not China, Leading Global Recovery

  1. Frank says:

    China is doing 8% this year. They just delivered 10 million cars. Not recovered until July?

    This article is full of BS or Cow S.

  2. Chris Devonshire-Ellis says:

    Hi Frank, that depends on whether you believe that 8%. If they hadn’t put in USD1 trillion in the economy and provided low interest rates for car loans you’d be seeing a different story. China’s current findamentals do not support 8% growth.

  3. Chas says:

    How about no one is leading the recovery?

    Compare the size of the economies. According to 2008 nominal GDP figures.

    1. US 14,441,425
    3. China 4,327,448
    12. India 1,206,684

    How can anyone claim the economy that’s just one position larger than Mexico is the driver of the “global recovery”?

    India is the most overrated economy.

  4. Frank says:

    However, they did put in 1T.

    Look at Iron Ore, oil, and GM’s auto production numbers. See the high speed rail construction.

    Wake up.

  5. Chris Devonshire-Ellis says:

    We’re running an article in the new issue of India Briefing about the Public-Private Partnerships that are on offer in recconstruction in India. Its staggering in scale, and the process began about two-three years ago. Anyone who has recently flown into Delhi or Mumbai international airports will have noticed the change. These things are happening now. Indian IPO’s are 20 overscribed, the Sensex is up 78% in 6 months. People are buying into Indian companies involved with redevelopment. The difference with India is that is being largely funded by private equity. In China, its all government. Can the Chinese sustain that?

  6. Frank says:

    Chris. Wake up. Take a look at Chas’ number.

    2008 nominal GDP figures.

    3. China 4,327,448
    12. India 1,206,684

    Then, take a look at 1949′s number.

    India was on par with China, 60 years ago. Same can be said about railway, highway, power generation, etc.

    China moved on. India also moved, but in much slower pace.

    China changed a lot in the last 60 years. India is still the same old India when British ruled them.

    Chinese want to change more. Indians from your website and elsewhere think they have a perfect country. They do not want to change.

    Whatever Chinese do not have (Private equity, free media, convertible currency, etc), they can have overnight. Just take a look at Russia. However, Russia’s story proved it won’t help much now.

    This could change in the future. China can change overnight.

    India cannot. Whatever Indians do not have, (infrastructures, educated work force, no-nonsense work ethics), India needs many years to develop.

    China moved on. India also moved. But much slower.

    China changed a lot in the last 60 years. India is still the same old India when British ruled them.

    Chinese want to change more. Indians from your website and elsewhere think they have a perfect country. They do not want to change.

    Whatever Chinese do not have,(Private equity, free media, convertable currency, etc), they can have overnight. Just take a look at Russia. However, Russia’s story proved it won’t help much now.

    This could change in the future. China can change overnight.

    India cannot. Whatever Indians do not have, (infurstructures, hardworking people)

  7. Chris Devonshire-Ellis says:

    Frank, I have nine offices in China and lived there for 21 years. I regularly fly between China & India (indeed – hence this website). In my opinion, India’s GDP growth rate will be higher than China’s for the next decade, starting about now. There are larger projects, more investment requirements and their growth base is smaller. I don’t buy into China indefinately sustaining a 9% GDP rate. I personally beleive thats mistaken, and the only reason they are achiving it now is because they injected USD1 trillion into their economy. India, by contrast, injected about USD60billion. The Indian economy simply hasn’t needed to be bailed out to the extent China’s has.

    You appear to have a different opinion to me. That’s fine, but I can assure you I remain wide awake. (Coffee helps though). I’m up for a small wager though for India vs. China GDP rate (we’ll take World Bank reckoned figures though) if you wish. But I advise you to save your money. – Thanks Chris

  8. jimy says:

    chinese nitizen aways joke about a word:indian say every thing of theirs is the best in the world while korean proclaim that very best things in the world is belong to korea. indian should argue or compare with korean instead china.now korea are leading the universe recovery,could india do that?

  9. Chris Devonshire-Ellis says:

    Jimy, would that be North Korea or South Korea leading the world out of recession? Kim Jong-Il does remind me somewhat of a Lehman Brothers Investment Banker – he messes up his country, spends too much, and gets bailed out by China. Way to go, Mr. Kim.

Comments are closed.



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