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CHINA SURGES, EU DECLINES

The world’s fastest growing economies are China and India, and they are increasingly asserting and expanding global influence. Their growing power, particularly of China, is undermining the influence of the European Union, a politico-economic bloc of 28 member countries.Hardcover-Book-MockUp-300

“The growth of China and India does not make it more difficult for the EU to grow. This is not a zero sum game – not a fixed cake to be divided out,” said Roger Bootle, author of book The Trouble with Europe: Why the EU isn’t Working – How it can be Reformed – What could Take its Place.

“The reasons for the EU’s slow growth are to be found within the EU,” he said in an interview. “Nevertheless, as China and India grow more quickly, the share of the EU in the world’s GDP will fall and with it the weight and influence of the EU in the world,” said the head of the Capital Economics, the London-based independent economic consultancy and think-tank.

Recently the Paris-based Organisation for Economic Cooperation and Development (OECD) has slashed its eurozone economic growth estimates for 2014 and 2015, and forecast that among large economies India is expected to deliver impressive growth. The research organisation sees eurozone facing the risk of prolonged stagnation and predicts growth of only 0.8 per cent. For the US it is 2.1 per cent and Japan 0.9 per cent.

In the case of China, which had an average 10 per cent growth for almost three decades, the country could expect only 7.4 per cent. The world`s number two economy “has so far managed to achieve an orderly growth slowdown to more sustainable rates,” OECD noted.

It said India is the sole gainer, with a predicted surge in growth to 5.7 per cent from 4.9 per cent on the back of global confidence in a new government in Delhi that won a huge mandate based on the promise of pursuing growth-oriented reforms and progress in containing inflation.

PTA NEWS BUREAU

(Full text in PTA October/November issue)

 

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