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Will India Gain From China’s Economic Slowdown?

Investors and financial analysts around the world are becoming increasingly worried about the slowdown of China’s economy. The surprising move of the People’s Bank of China to devalue the yuan currency ignited concerns that led to a global market rout last month.

On Wednesday, the preliminary Caixin China Purchasing Managers’ Index (PMI) showed that the manufacturing activity in the dropped from 47.3 last month to 47% in September. A reading below 50 means businesses are weakening.

Policymakers in the United States are evaluating the risks associated with the slowing economic growth in China and other emerging markets, according to Federal Reserve Chairperson Janet Yellen. The current economic situation in China was one of the reasons behind the decision of the Fed not to raise interest rates last week.

China economic slowdown: India sees opportunity

Aside from the United States, other countries are concern that China’s slowing economy could spill over and affect the global growth.

Amid all the concerns about the Chinese economy, India perceives the situation differently—an opportunity to gain competitive advantage.

Liu Xiaoxue, an associate research fellow at the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, noted that India’s Prime Minister Narendra Modi reassured bankers and tycoons earlier this month that the country’s economy could withstand a global economic turmoil including China’s weakening economy. Prime Minister Modi told them, “China’s loss is going to be India’s gain.”

Separately, Indian Finance Minister Arun Jaitley said China’s economic...