Indian, Chinese growth helps U.S. firms
TEXT OF STORY
KAI RYSSDAL: Ben Bernanke said the other day that the recession is, technically, over already, which is great. But some new numbers suggest that we are not the only ones. The Chinese economy will probably grow more than 8 percent this year. Both factory production and retail sales there were much better than expected. And last quarter India showed its fastest growth in a year and a half.
We asked Marketplace’s Alisa Roth to find out what that means for us.
Alisa Roth: China and India are both outstripping the U.S. right now. And not just in terms of the amount of stuff their factories are producing. They’re growing a lot faster than we are, too.
James Barth is a fellow at the Milken Institute. He says it’s OK for America not to be first all the time.
James Barth: Because it obviously keeps world economic growth higher than it otherwise would be and benefits other countries as well. It doesn’t hurt the United States to have other countries pick up some of the slack when the U.S. is encountering difficulties.
The middle classes in India and China are bigger than the entire population of the U.S. So more growth there means more growth here.
Barth: They represent potential economic growth because of all the people that are working in those two countries, as well as potential consumers of goods produced in countries like the United States.
But this isn’t just about Indians and Chinese buying more of the things Americans make. Rapid growth creates opportunities for American companies in those countries.
Jayashankar Swaminathan is a professor at UNC Chapel Hill. He says in India, for example, the urban populations are growing very fast.
Jayashankar Swaminathan: What this means is, the cities need to be developed, the roads need to be developed and infrastructure needs to grow along with that. Now, this is where I think the opportunities are going to be pretty huge.
He says that’s because there aren’t very many Indian companies that are prepared to do projects like build power plants and bridges, areas in which many American companies specialize.
I’m Alisa Roth for Marketplace.
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