"China unleashed a blistering level of double-digit economic growth for three decades, using a cleverly driven strategy of inviting foreign investments to leverage on a supply of cheap land and labour, while encouraging domestic enterprises to become big and absorb foreign technologies," Sumita Dawra, who has worked as India's first Economic Counsellor in the Indian Embassy here, said.
Dawra recently released her book 'China: Behind The Miracle' in which she has provided a detailed account of the Chinese economic success.
"India must similarly invest in infrastructure and attract foreign investments in a strategic manner. Skilling the labour force and identification of land banks would smoothen the process of domestic and foreign investments.
"At the same time, India must avoid China's supply-driven growth model that has resulted in overhang of infrastructure, industrial overcapacities, surplus real-estate inventories, rapidly diminishing returns on investment," she said.
More From This Section
Dawra said India "must encourage a market-driven model that brings in more efficiencies in investments."
"We must also stay clear of manufacturing processes that are environmentally toxic, polluting air, water and soil, as has happened in many parts of China," she said.
In the 221-page book, Dawra attempts to provide an
extensive account of her study of the Chinese economy, which in 2011 emerged as the world's second-largest economy with prospects of even overtaking the US.
But of late, it has been bogged down and is struggling to halt the slowdown impacting its social and political systems.
"I arrived in China in 2011 - a year after the country had its last double-digit growth of 10.4 per cent in 2010. I saw the growth rates dip to 7.7 per cent in 2012."
"Trends of extensive cooling down of investments, retail sales and factory output were also firmly discernible. As were issues of rapidly rising local government debt levels, risky shadow banking, industrial over-capacities, declining corporate profit - which were all part of the economic slowdown," she said.
The slowdown has continued despite measures to develop the lesser-developed western provinces and massive urbanisation.
"China presently targeted GDP growth rate of 6.5 per cent in the 13th Five Year Plan (2016-20). It seems to be ambitious to most economists, who highlight need for 'efficiency and productivity reforms,'" she said.
"At the same time, we need to recognise that China is a USD 10 trillion plus economy and even if it grows at 6 per cent, one reads that 'it would still be adding roughly 1.5 times the size of Singapore or Malaysian economy per year," she said.
The IMF estimates the Chinese economy to grow at 6.2 per cent in the next five years.
"What will however remain a concern will be the game plan for timely implementation of market-based economic and financial reforms, and the extent to which China will be able to balance this with its need to maintain 'moderate-to-high' growth rates for its masses, she said.
"By taking up manufacturing in a bigger way, investing in human resource development for unleashing the great service sector growth potential, meeting aspirational levels of Indians for service delivery in education and health services, it is going to be an upward growth spiral, no doubt," she said.