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Last Updated: Tuesday, 27 January, 2004, 15:56 GMT
China and India set to outperform
By Monica Gupta
BBC correspondent in Delhi

A worker loading containers at Yantian Port, Shenzhen
China is enjoying an export-led boom
China and India will be among the three biggest economies in the world by the middle of this century, researchers have predicted.

Helped by "robust" long-term growth, China and India will hit the top three by 2050, according to New Delhi-based think-tank RIS.

RIS said China is currently the fastest-growing region in the world, followed by South Asia.

But it added that reforms were needed to keep growth on track.

Trade pact

The think-tank said the South Asia region should forge deeper trade alliances and upgrade its skills base in order to meet the challenges ahead.

"Countries that are not part of any trade blocs face the risk of discrimination of their exports and loss of competitiveness," RIS said.

"An immediate challenge for South Asia is to expedite the move towards its own free trade agreement and further vision of deeper economic integration."

The think-tank added that the region must also move towards more high-tech manufacturing in order to boost its export earnings.

"The region needs to pay attention to innovative activity to upgrade the technology profile of exports," RIS said.

It singled out currency fluctuations, "creeping protectionism" in the developed world, and the risk of terrorism as the greatest threats to continued growth in south Asia.

The World Bank said on Tuesday that India could achieve a sustainable annual growth rate of about 8% provided it cut its fiscal deficit and pushed through urgently-needed economic reforms.

Earlier this month, official statistics showed that China expanded by 9% in 2003, its fastest growth rate in six years.


SEE ALSO:
China's growth hits six-year high
20 Jan 04  |  Business
China gears up for New Year
20 Jan 04  |  Asia-Pacific


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