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Asia-PacificMarch 6 2006

Taking sides in the China-India debate

One of the great debates of economics is whether China or India will be the leading emerging market powerhouse of the next decade. China has first-mover advantage but is its model running into problems?
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Avinash Persaud, chairman of Intelligence Capital, which specialises in financial market liquidity, believes India is better placed for the next phase of development.

“The Chinese model was the right model for taking China out of poverty and much more successful than the Indian model, but we have entered a different phase of economic development where that model is not going to function so well,” he says. “A country that saves about 40% of GDP and is only generating 10% of growth [like China] is actually not succeeding. The next phase of economic development is about those micro-economic decisions made by profit-driven private corporations and China is not as well set up [as India] for that.”

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