Govt orders study of China's economy

At a time when China faces opprobrium from the world for its crackdown on Tibetans, the Indian government has commissioned a report on an aspect in which India and China are competitors: The economy.

Interestingly, the task of finding out how the Chinese economy is faring has been given to the covert agencies.

According to top sources in government, the report concludes that the Chinese economy's recent performance suggests more similarities with India than thought of earlier.

The Chinese economy has been clocking double digit growth rates for the last five years.

This peaked in December 2007 at 11.4 per cent, the average for the last five years being 10.6 per cent. This is, however, coupled with high inflation, with prices of foodgrain and essential commodities climbing up sharply.

According to the report, the Chinese inflation rate for 2007 went up from 2.2 per cent in January to 6.5 per cent in December 2007.

While China's manufacturing sector comprises 7-40 per cent of GDP, the National Bureau of Statistics, which has looked at the data, says it is the decline of agricultural production that is a cause for worry.

Agricultural production has come down from 550 million metric tonnes in 1998 to 501 million metric tonnes in 2007. The National Bureau of Statistics has warned that China could be looking at a food crisis and galloping inflation.

When asked as to why the study was commissioned by the Indian government, an official the huge volume of trade between India and China made it important for India's economic well-being. Bilateral trade between the two countries is around $25 billion and is expected to reach $ 40 billion by 2010.