ET GBS 2017: Invest and build whatever it takes, noted economist advises Modi govt
NEW DELHI: India should invest more in its infrastructure whatever it takes if it wants to become a top economic power, according to noted economist Dr Andy Xie.
"Don't look an economic development as an economist..its about building project..its whatever it takes...you need to build cities, highways. Forget about profits," he said at the Economic Times Global Business Summit 2017 here today.
If you won't invest, he warned, you will get stuck in the ground level.
"So the new world order is investment led growth in India and consumption driven growth in China," Xie, who is considered as world's 50 most influential experts in finance, said.
Xie has also some advice on monetary stimulations and currency devaluations which are often being used by emerging economies.
Emerging countries, he said, should not devalue their currency as wages there are low compared to developed countries. "Any country which wants to rise should have a hard currency policy."
Terming monetary stimulations as a "poison", he said, "It is like a drug; it is like cocaine. You feel good for a short period of time but your health goes down. Any country talks about monetary stimulus will go down."
Xie said China needs to move away from the OEM model and focus more on consumption driven growth.
"For China and India, the issue is size. 800 million Chinese are working to produce goods for 300 million Americans and 300 million Europeans. But it is very difficult to ask them (Americans and Europeans) to consume more and more. They have been doing that for far too long and are now debt ridden,"
That's why China needs to change its economic model which is based on American consumptions. Americans are infact over consumed. That's why they are deeper in debt, he said.
"The old export model - exporting to rich countries - is dead. Emerging economies thus need to create free trade blocks," he added.
"The Japanese economic model of building more and more factories is also dead."
"Don't look an economic development as an economist..its about building project..its whatever it takes...you need to build cities, highways. Forget about profits," he said at the Economic Times Global Business Summit 2017 here today.
If you won't invest, he warned, you will get stuck in the ground level.
"So the new world order is investment led growth in India and consumption driven growth in China," Xie, who is considered as world's 50 most influential experts in finance, said.
Xie has also some advice on monetary stimulations and currency devaluations which are often being used by emerging economies.
Emerging countries, he said, should not devalue their currency as wages there are low compared to developed countries. "Any country which wants to rise should have a hard currency policy."
Terming monetary stimulations as a "poison", he said, "It is like a drug; it is like cocaine. You feel good for a short period of time but your health goes down. Any country talks about monetary stimulus will go down."
Xie said China needs to move away from the OEM model and focus more on consumption driven growth.
"For China and India, the issue is size. 800 million Chinese are working to produce goods for 300 million Americans and 300 million Europeans. But it is very difficult to ask them (Americans and Europeans) to consume more and more. They have been doing that for far too long and are now debt ridden,"
That's why China needs to change its economic model which is based on American consumptions. Americans are infact over consumed. That's why they are deeper in debt, he said.
"The old export model - exporting to rich countries - is dead. Emerging economies thus need to create free trade blocks," he added.
"The Japanese economic model of building more and more factories is also dead."
