PremiumThe SBI Research report is titled 'Frontloading Fed rate hikes and China's worsening construction bubble: is India enjoying the new 'TINA' moment in a checkmate world embracing plus one?' and is authored by Group Chief Economic Adviser Soumya Kanti Ghosh.
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The State Bank of India (SBI), in its latest research, said that India is likely to get benefit from a slowdown in investment intentions in China. The report called 'Ecowrap' believes that the China story may now be facing clear headwinds, according to news agency ANI.
The SBI Research report is titled 'Frontloading Fed rate hikes and China's worsening construction bubble: is India enjoying the new 'TINA' moment in a checkmate world embracing plus one?' and is authored by Group Chief Economic Adviser Soumya Kanti Ghosh.
It says that India seems to be enjoying the "There is no alternative" factor as all countries are facing the churn globally, while India seems to be the best-placed jurisdiction in terms of growth and inflation outlook in 2022-23.
The report said that China is also facing a bleak outlook on the back of a construction sector meltdown, citing that the sizes of the family will gradually shrink as the population ages, which will further lead to a decrease in housing demand in the long run.
Citing Apple's recent decision to shift part production of its flagship iPhone 14 model for worldwide shipping from India, with a negligible time lag of a few weeks posts its slated launch on September 7, the SBI Research believes it bears testimony to the optimism of India benefitting from China's slowdown.
It further stated that India's housing sales grew 60% on a yearly basis to 158,705 units during the January-June period, while it was 19% higher than in the second half of 2021.
In addition to this, the report said that the situation has been compounded by a strict zero-covid policy that has disturbed the normal flow of activity in the construction sector which is almost entirely labor dependent.
Since the Evergrande group was once hailed as the toast of Chinese infrastructure resurgence, the financial situation of China's construction sector has steadily moved southwards.
(With ANI inputs)