China and India: Those two big outliers

Vikas Bajaj’s excellent article on how rail and other transportation bottlenecks are limiting India’s growth contains a paragraph that should worry everyone who believes in liberalism and democracy:

CALGARY – The U.K.’s BG Group Plc has unveiled plans to export the equivalent of one-quarter of Canada’s current daily natural gas production from a British Columbia terminal starting in 2021. The company, whose Canadian office is in Vancouver, has no reserves nearby.

The United States and three other big powers this week argued for allowing nuclear-armed India into an atomic export control group, but China and several European states appeared doubtful about the move, diplomats said on Wednesday. They said the divisions were in evidence during closed-door talks of the 46-nation Nuclear Suppliers Group on the sensitive issue of whether India could join and become the NSG's only member that is outside the Non-Proliferation Treaty (NPT). The United ...

Both India and China are in the middle of their worst economic slowdowns in many years. If IMF projections for 2012 prove accurate, China’s GDP will advance at the slowest pace since 1999, and India’s at the slowest pace since 2002. There is a lot to learn from these downturns. One is that economies, no matter how promising, can’t grow at fantastically high rates indefinitely, with GDP ascending in neat, upward straight lines. We also learn that “decoupling” is still not a reality (especially for China).

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.The article below is a guest contribution by Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors.

AS A brief follow-up to this morning's post on Chinese wage growth, let me draw your attention to a new working paper by Barry Eichengreen, Donghyun Park, and Kwanho Shin. Here's the abstract: