How to benefit from India's rivalry with China

December 14, 2005

The Southeast Asian Economic Summit took place in India in December, and there was much celebration that India's growth rate was 8% this past year, as of September 30, 2005. India can safely support its claim to be the fastest growing democracy in the world.  However, there is still much China envy, as China's growth was 9% during that same time period. India claims that they will eventually supercede China, since China's one child policy will ultimately limit its growth.

What It Means:

Demographic growth has historically been the primary driver for economic growth. In this case, India does have the advantage. Competition between these two large entities will be good for world growth, particularly in Southeast Asia. The race for economic supremacy between these two countries will have positive trade benefits for all of their suppliers, who are primarily regional.

Action Steps:

Don't be fooled by those who say bet on China or India. Don't try to get a single country fund, or even worse, a single company stock in either of these countries. Instead, find a good Pacific regional fund, and enjoy the benefits of this race between the two behemoths.