Article image
About
 

A $10 Trillion Bet on China and India

December 27, 2012 by Michael J. Silverstein
December 27, 2012

When it comes to China and India, we at The Boston Consulting Group urge you to bet in favor of both.

Just yesterday, the Organization for Economic Cooperation and Development (OECD) released a new report predicting that the economy of China will rebound and grow 8.5 percent in 2013 and 8.9 percent in 2014, citing increasing domestic consumer demand and government spending on housing and infrastructure as the tailwinds behind this renewed surge. According to The Wall Street Journal, the OECD report attributed China's slightly less robust 7.5 percent growth rate this year to a slowdown in exports and the government's intervention to stave off inflation and rein in property prices. The OECD report also expressed optimism that India's economy will resume growth over the next two years, indicating that its currency will likely be shored up soon and that its current-account deficit issues will be stabilized, too.

Given recent blips in both countries’ economies, many prognosticators have sounded dire alarms, urging caution for Western companies pondering their future initiatives in China or India. In our new book, The $10 Trillion Prize: Captivating the Newly Affluent in China and India, we posit that growth in China and India will not occur along a straight line, and both countries will have to overcome corruption, imprudent investments, social disharmony, pollution, natural disasters, and political conflict. But our book’s primary thesis—and one that we continue to maintain—is that the economies of China and India will continue to grow at a compound annual growth rate of at least 8 percent through the end of the decade, and that annual consumer spending in the two countries combined will therefore reach $10 trillion by 2020.

LIKE. FOLLOW. SHARE.
Related Articles