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The flood of Chinese exports in Asia and the rapidly growing AI in the world are becoming new economic challenges for India. JPMorgan’s Chief India Economist Sajid Chinoy has said that India stands at a time when the world is moving towards deglobalization. In such an environment, India will have to prepare a new strategy to save both its growth and employment.
New Delhi. Sajid Chinoy has warned that China’s cheap exports are spreading rapidly in Asia, due to which emerging economies including India are coming under pressure. He says that the world is no longer as globalized as it used to be, and this change is the biggest risk for emerging economies. Exports from China to America are now shifting to Asia, India, Middle-East and Africa due to high tariffs, which is directly affecting local industries.
Flood of Chinese goods increased problems
Chinoy said that the heavy tariffs imposed by America are diverting China’s exports to other parts of the world. He told that just like when a dam is built on a river, water spreads around, similarly Chinese products are now entering the markets of Asia like a ‘flood’. Due to this, India faces a double challenge – on one hand, export growth is weakening, on the other hand, domestic manufacturing is under pressure due to cheap Chinese goods.
AI also threatens white collar jobs
Chinoy said that AI and automation are giving rise to a new employment crisis across the world. The role of machines has already increased in manufacturing, now AI will affect office jobs too. This problem is less in developed countries like Japan or Europe, but it is a big threat in a country with young population like India. India’s demographic dividend may be at risk due to AI in the coming 15 years.
A hint of the future came from the Taiwan model
Giving the example of Taiwan, he said that due to the increasing infrastructure of AI, exports are increasing rapidly, but jobs are not being created. Taiwan’s export growth was 33 percent, but people’s consumption increased only 1 percent. Even despite the AI boom, the Taiwan government had to provide cash support of 2 percent of GDP to sustain the economy. According to Chinoy, this model suggests that future growth will be more capital-intensive and will generate less employment.
