On November 6, at the Barclay’s Asia Forum in Hong Kong, Nouriel Roubini, professor of Economics at the Stern School of Business New York University, and co-founder and chairman of Roubini Global Economics LLC in New York, spoke about a role switch in the economies and policies of India and China.
Roubini opined that the economic growth in China would fall to 6.5% in 2015 and below 6% in 2016 due to the aging population of China, and also because of the investment-driven economic model followed by Beijing. China’s banks continued to face increasing amount of bad loans because of credit-driven fixed investments in real estate, infrastructure, and excess manufacturing capacity. Besides, bad debts in the public sector were weighing the country down. Reforms that were announced by the Communist Party of China’s third plenum in 2013 were not being implemented, Roubini explained.
In contrast, with the right reforms, India would outpace China to record a 7% growth he predicted.
“So for the first time ever the tortoise becomes the hare and the hare becomes the tortoise,” Roubini said.
