India should learn from China growth story

KOLKATA: The Indian growth story was driven by the services sector, but the country needs to improve manufacturing competitiveness to achieve 10 per cent growth, which would in turn need a strong backing of infrastructure support.

Addressing the Plenary session on "The China Growth Story" at the partnership summit here, SN Menon, commerce secretary, Ministry of Commerce and Industry, Govt.

of India, said that the Chinese experience shows the value of infrastructure, education and health, which are vital for Indian growth with social justice.

India has to look at more efficient use of resources and address regional imbalances and the widening rural and urban divide. The country should concentrate on rural development and rural infrastructure and put in necessary linkages in the agro supply

chain, carefully manage environmental issues and price environment resources

sensibly, he added.

It is important that the two economies learn from each other and academics and industry must share their experiences. While it is difficult to compare two different countries, one being a dynamic and vibrant democracy, India must remember that it needs to be slow and steady and may be able to take the kind of steps that China has taken. The new special economic zones were a step in the right direction.

While responding to a question on labour policies in the new special economic zones, Menon clarified that operation of the Contract Labour Act that was in the process of getting notified, allowed companies to engage seasonal labour.

In China, the policy was to maintain a balance, added Dr Zhou Qiren. There were people with jobs and those without and the idea was not to over protect those with jobs if that created problems for greater job creation.

Such decisions were taken on a case by case basis and once the overall state of employment had improved, the government could reconsider the case for job-protection. Such policy changes would be based on actual positions on the ground at any point of time.

Introducing the cultural underpinning to the China growth story, Dr Vishakha Desai, President, the Asia Society, USA, compared Chinese growth engine to a twin-engine jet where one focused on internal issues while the other focused on integrating with the external world.

This mutual interdependence between China and the rest of the world, Dr

Desai said would continue in the days to come as China is challenged by an unbalanced resource endowment. It has much by way of people force but is short of natural resources, which it needs from outside. The Chinese leadership is formatting a strategic framework to be connected with such global resources, she said.

China's successful "Go global policy" has been driven by the twin realizations that economic co-operation was important for China and that opening up of the economy along with the launching of the reforms process were development imperatives, said Rong Yansong, commercial counsellor, Department of Foreign Economic Co-operation, Ministry of Commerce, China.