Supply Chain and Market Scale: India as the Next China?

Published April 10, 2024

This article was originally published in Expressions: China Trends #19 - The Hot Peace between China and India by Institut Montaigne. Click here to read.

Refer to pages 11-17 of the PDF below.

Introduction

Through much of 2023, “Peak China” was among the buzzwords hotly debated within China. A January 2024 report by the Chongyang Institute for Financial Studies estimated that from August to December 2023, more than 160 articles had been published in prominent Western media outlets discussing China’s economic woes.1 The report characterized this as an “absurd narrative” (荒谬的叙事). Despite that, the discourse around China’s economic challenges and the search for alternative investment destinations has grown. Foreign Direct Investments (FDI) into China totaled $33 billion on a net basis in 2023, falling 82% from 2022, the lowest since 1993.2 This shift has evidently resonated at the highest levels of the Chinese leadership. Trying to counter growing worries, President Xi Jinping argued during a speech at the APEC CEO Summit in November 2023 that China remained the “best investment destination”, adding that “the ‘next China’ is still China”.3 Within this framework, Chinese narrative strategy has entailed emphasizing the country’s strengths while highlighting the weaknesses of its potential competitors, starting with India.

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