Episode Summary
In this episode of Interpreting India, host Saheb Singh Chadha is joined by Amit Kumar, staff research analyst at the Takshashila Institution, to explore the structural imbalances in China’s economy and what they mean for the world. The conversation delves into three major dilemmas facing the Chinese economy—fiscal stimulus, property sector instability, and domestic consumption rebalancing. Together, they examine how these economic dynamics impact China’s foreign policy, foreign economic relations and China’s outreach to countries like India. India–China economic relations are also discussed.
Amit Kumar is a contributor to the Views From Taipei compendium published by Carnegie India in May 2025. He is the author of the essay titled The Pulls and Pushes Within the Chinese Economy.
Episode Notes
In this conversation, Saheb and Amit examine the three major structural dilemmas facing China’s economy: a persistently low domestic consumption rate of around 40 percent of GDP, making China an outlier among large economies; the Chinese state’s reluctance to adopt fiscal stimulus due to its ideological opposition to welfarism; and a sharp slowdown in real estate investment that has had ripple effects across the broader economy. They also discuss how China’s enduring trade surpluses, particularly with the U.S., EU, and India are generating international pushback. Despite high trade volumes, Amit highlights the limited nature of Chinese investment in India, noting that economic outreach from China is driven less by genuine market interest and more by geopolitical calculations.
The episode further explores why China’s engagement with regions like Africa, Latin America, and Southeast Asia cannot substitute for the demand found in Western markets. The episode also looks at how India’s large and growing consumer market could make it a prime destination for companies relocating under the China Plus One strategy, even if Chinese firms themselves remain reluctant to invest directly. Finally, the discussion draws a clear line between China’s diplomatic messaging and its actual economic practices, revealing a gap that continues to shape global perceptions.
Suggested Readings
Views From Taipei: Essays by Young Indian Scholars on China by Vijay Gokhale, Suyash Desai, Amit Kumar, and Aadil Brar
Review of Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic by Ministry of Commerce & Industry
De-risking India’s Trade with China: Identifying Strategic and Critical Vulnerabilities by Amit Kumar
China isn't Ready to Shift to a Consumption-Driven Economy by Amit Kumar
Is India Warming up to Chinese Investment? By Amit Kumar
China’s Economy: What Everyone Needs to Know by Arthur R. Kroeber
China’s Western Horizon: Beijing and the New Geopolitics of Eurasia by Daniel S. Markey
