India and China should give each other space and avoid competition, was the consensus at annual economics summit ‘ArthaVaad 2010’ organized by International Management Institute (IMI), New Delhi recently.

The focal point of the summit was the comparative analysis of the two Asian giants India and China in various sectors as well as the analysis of BRIC (Brazil, Russia, India & China) collaboration.

In the backdrop of both India and China on a resource intensive growth course, the reminiscent of the West and East Asia and 45% of the new global demand for oil and gas expected from these two countries, the demand for resource can push the costs. More so, when both the countries are sourcing their raw material requirements from Latin America, Africa, Middle East & South East Asia.

Organisations like Sinopec, ONGC among others, from these two countries, have now forayed into the preserve of the MNCs of the First World Countries so as to meet the requirement of the economic growth of their respective countries.

Speaking at the summit Mr. Rajeev Anantaram, Senior Fellow, ICRIER, touched upon the growth, reforms, FDI and infrastructure in China. According to him, the emphasis on development of social capital, in particular secondary school education is one of most important factors which has led to the unsurpassable growth of China as a low cost manufacturing hub.

“The serious excess capacity and inventory buildup led to dumping and exchange rate management policies of China. Further, due to lopsided economic development, the dragon is facing a crucial economic disparity ranging from an urban rural divide to intra-city differences” he said. “The competition from low wage countries like Malaysia, Indonesia, Philippines and Thailand is also a cause for concern for both India and China,” he added.

According to Mr. Puru Agrawal, CEO of Hreeng Diamonds and the Chief Gemologist at International Gem Certification Laboratory while  giving his insights into the Chinese and Indian Diamond Industries said “China lags behind India in this front because of its governed markets, unavailability of cheap labour, less consumption and more importantly lack of expertise vis a vis the Indian market,” he said.

Elaborating the feasibility of a Beijing consensus, Professor Rajat Kathuria raised the issue “if authoritarianism is a better system of governance than the others”.

During the course of the Summit two other important points were also raised,  the existence and the desirability of an Asian Currency Unit especially in light of the initiative by the Asian Development Bank were also deliberated upon and the big brother like behavior of China with its political and hegemonic influence in the South East Asian Region.

While concluding the Summit,  Professor Paul Vandenberg of IMI Delhi said  “India’s emerging entrepreneurial class is a shot in the arm for the nation whereas China’s state driven economy is the backbone of the country and both the countries should try to emulate the strengths of each other”.