Opinion | How emerging economies can help China achieve its goal of peaceful rise
- The developing world needs China and its lower-cost goods, vast capacity and massive surplus capital
- Robust trade with the Global South will support China’s growth and offers it another pathway to high-income status – even as its relationship with the West sours
The reduced investment cost improves the growth potential of the developing economies and makes them more immune to growth volatility in the developed economies. As the Global South improves competitiveness, the Global North will face growing downward pressure on living standards.
Last year, China’s exports to India rose by 21.7 per cent to US$118.5 billion. India’s trade deficit with China surpassed US$100 billion. It is a lopsided trade relationship in appearance and occurring amid the backdrop of border conflicts. Why is India tolerating or even pursuing such a trade relationship?
As China is like a bazaar for components and intermediate materials, a country can focus on what it is good at, import everything else from China at low prices and compete in the global market. China’s per capita income is about US$12,000, and buying from China doesn’t cut into a country’s competitiveness.
