India and China will continue to drive global expansion as they are more "nimble" and can produce at lower cost, Indian Finance Minister Palaniappan Chidambaram said.

 

"China and India have much to look forward to," Chidambaram told the India Economic Summit organized by the World Economic Forum in New Delhi yesterday. "Developing countries have acquired greater capacity to compete with developed countries."

 

The two Asian economies, the world's fastest growing, adapt better to changes in global market conditions as they have cheap labor and can more quickly seize opportunities, Chidambaram said. That doesn't mean economic power has moved to China and India, the Harvard-trained minister said, according to Bloomberg News.

 

"As long as advanced countries have the edge in knowledge, financial and material resources, I don't think power has shifted to developing countries," Chidambaram said. "What has changed is that developing countries have acquired greater capacity to compete with developed countries."

 

India's US$906-billion economy grew 8.9 percent last quarter from a year earlier, while China's US$2.6-trillion economy expanded 11.5 percent. That kind of pace is more than three times the rate of growth in the United States and countries sharing the euro. Still, the World Bank estimates more than half India's 1.1 billion people live on less than US$2 a day.

 

(Shanghai Daily December 3, 2007)