Dr Andreas Bauer, Senior Resident Representative — India, Nepal, Bhutan, International Monetary Fund, stated that the trade tension between US and China affects global investments. He stressed that India has a lot of potential as it enjoys a very diverse economy. He suggested that India should keep up the pace of reforms to achieve the highest growth rates and Government should take up this reform.

He was speaking at The Growth Net Summit 7.0, organized by the Confederation of Indian Industry (CII), Ananta Centre and Smadja & Smadja in New Delhi today.

According to Dr Rakesh Mohan, Senior Fellow at the Jackson Institute of Global Affairs, Yale University and Distinguished Fellow at Brookings India, deglobalisation should be called and termed as de-Westernisation. In reality, deglobalisation is not taking place, he felt. Problems of deglobalization include uncertainty from issues such as the trade war between US and China, and the political tension between US and Iran. These uncertainties cannot be measured.

Dr Mohan highlighted that the world would be better off if the governments participate more actively in their country’s manufacturing sectors. For India, the shortage of financial resources is a big challenge and the country should focus on attracting overseas investments, he added.

According to Dr Tan Khee Giap, Co-Director, Asia Competitiveness Institute (ACI); Associate Professor of Public Policy, Lee Kuan Yew School of Public Policy, National University of Singapore & Chairman, Singapore National Committee for Pacific Economic Cooperation, Singapore, the negative impact of global slowdown is the direct effect of the US-China trade war. He said that it is not about trade war, it is about global power dynamics. Asianisation is desirable and Japan should play the lead role while regional trade should be encouraged. Above all, urbanization should also be a step towards Asianisation. He added that India should take up a lead role in regional growth.

ASEAN can take part in leading Asia’s development and growth, commented Dr Alicia Garcia Herrero, Chief Economist for Asia, Natixis, Hong Kong SAR. China has 30 percent of global share in manufacturing products, and Asia should increase its manufacturing share. She also mentioned that India should think of FDI for development and growth. Regional trade is the major bloc in this new world, according to her.

Dr Shaun Roache, Chief APAC Economist, Standard & Poor's Global Ratings, Singapore noted that the role of government is significant for deglobalisation. It is most important for developing infrastructure. He stated that the opening up of the manufacturing sector is required. Manpower and digital capability as public goods for a more inclusive society should be encouraged.

Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry, said that technological changes are leading to a shrinkage in global value chains and a reordering of manufacturing locations across the world. The US-China economic relationship is impacting the entire world economy. Added geopolitical risks, weaker April data, and uncertainties in growth paths have repercussions on global economic activity.

New Delhi

6 June 2019